The Biggest Lesson We Learned from Investing in Detroit
Originally published by Fortune on September 25, 2017.
Why is a bank involved in tackling big societal issues? It’s a question we get a lot.
At a time when so many people are being left behind, shut out of the rewards of a growing economy – we, as leaders in business and in our communities, simply cannot afford the consequences of inaction.
The private sector plays an essential role in society, and it is a role we should embrace—not just because it’s the right thing to do. It’s good for our shareholders and for our bottom line, too. Business can do well by doing good.
By working to grow the economies of the communities we serve and playing a more active role in the future of people who live there, we can earn a fair return for our shareholders and lay a foundation that promotes inclusive and sustainable growth.
We can list countless reasons as to why JPMorgan Chase and other businesses should care about the lack of economic opportunity that exists in the U.S. and around the world. But we have found that the clearest and perhaps more useful answer lies in lessons learned from our investments to date and how we’re applying those lessons going forward.
About five years ago, we decided to conduct a thorough review of our philanthropic efforts. We learned that while we were dedicating significant resources, we weren’t really moving the needle on pressing economic issues facing our communities around the United States and the world.
So, we made a strategic change. We refined our approach to more fully draw on and leverage all of the firm’s resources, including our data and our people’s expertise – and developed significant, long-term initiatives focused on creating more inclusive economic growth.
Now, we’re investing approximately $250 million annually in four key areas that are at the heart of helping more people share in the rewards of our economy: jobs and skills, neighborhood revitalization, small business expansion, and financial health. We have sharpened our focus in areas that are aligned with our business expertise. In 2012, less than 40% of our initiatives were dedicated to these four pillars. Today, it is 95%.
Our $150 million investment in Detroit is the first example, which showcases our model for citywide impact in creating more widely shared prosperity. Certainly, Detroit’s challenges are complex and they were years in the making. Our investment alone cannot solve all of the issues the city faces. But by working closely with deeply committed and knowledgeable partners, our coordinated investments across a range of elements are making a real impact.
Together, we’re equipping residents with skills for in-demand jobs, we’re helping minority small business owners grow, and we’re providing capital to housing and retail projects that are key to creating livable, inclusive, and sustainable neighborhoods.
While Detroit has a long way to go, its continued resurgence is proof of concept and we are continually looking for ways to apply what we’ve learned in other cities. Chief among our insights is the need to bring an innovation mindset – a willingness to test, learn and iterate. Equally important, is a willingness to collaborate.
To truly make progress in addressing complex issues requires government, business and nonprofits to come to the table and ask “What value can each of us provide to solve these challenges?” This type of meaningful collaboration does not occur often enough in cities. But when it does, there is tremendous opportunity for success. Chicago and Washington, D.C. are two places in which we saw such an opportunity to make progress by collaborating with local leaders.
Recently, JPMorgan Chase made a $40 million commitment to help residents benefit from economic growth in Chicago’s underserved neighborhoods on the south and west sides. And today, we’re making a similar $10 million commitment to Washington, D.C.’s Ward 7 and 8.
Each of these investments stem from lessons we’ve learned in Detroit. And while each city may face some challenges that are unique, this model is making a real impact as it focuses on fundamental pillars of inclusive growth that are consistent across communities.
We do not take these commitments lightly. And we understand that not everything will work. But nothing will if we do not try.
The future of our communities and that of our business is inextricably linked. It’s a moral and an economic imperative that we step up to these challenges – and we owe it to our shareholders, too.
About the Authors:
Jamie Dimon is Chairman and CEO of JPMorgan Chase and Peter Scher is Head of Corporate Responsibility and Chairman of the Greater Washington Region at JPMorgan Chase.