Health Equity Is On The Table. Who's Picking Up The Tab?

Updated: Jun 8, 2021

By Jessica Bonham-Werling

Part 4: The Service Impact: We assert that corporate donations and financial engagement strategically focused on improving conditions in the communities where organizations operate will ultimately lead to economic benefits for the organizations themselves.

I went to both high school and college in Tucson, Arizona between 1995 and 2004. Although my time as a resident was relatively short, I still consider Tucson “home.” In the nine years I lived there, I can probably count the number of times I went downtown on a single hand. When I did go, I went to the bar at Hotel Congress, which had a kick-ass 80’s night.

The last time I went “home” (pre-pandemic), I visited Hotel Congress for some nostalgia, but as my Uber pulled up out front, I felt like I had never been there before. The surrounding neighborhood was nearly unrecognizable – the street that had once been lined with empty or sparsely occupied buildings was now vibrant with restaurants, bars, and retail.

There had been efforts to revitalize downtown most of the time I lived in Tucson, but with limited noticeable progress. That all changed in 2013 when the efforts shifted away from a purely government-led project to a new model that focused instead on establishing private partnerships and generating private investment. The now bustling downtown is at the center of a revitalization that now extends across the city as more and more businesses are expanding or relocating operations to Tucson including both small businesses and giants like Amazon and Caterpillar.

As the economic and service environments thrive in Tucson, we hypothesize that the public health of the community will begin to rise as well, even in the middle of a pandemic. The strong public-private partnerships have positioned it for a strong comeback as COVID-19 restrictions are rolled back. The focus on private engagement follows the blueprints of success from other mid-sized cities. Austin has also been undergoing a revitalization for several years and has seen improvement in some key community health indicators. The infant mortality rate, for example, dropped from 5.6 deaths per 1,000 live births in 2014 to just 4 in 2021.

Our blog series thus far has focused on how business operations can shape community environmental, economic, and social conditions through internal human resources, supply chain, product, and marketing practices, but business can also shape the local service environment through how they chose to invest in local communities. Community institutions shape outcomes for residents - closing systemic gaps in community institutions is key to achieving equity.

While companies devote much time and talent to their overall business strategy, limited resources are typically directed to strategies for corporate giving and community benefit. They may be conducted in a piecemeal fashion, and in many cases miss an opportunity to enhance business performance while also enhancing the community. The ability of companies to successfully operate depends heavily on the circumstances of the communities that surround them. Tenured Tucson businesses that invested in revitalization projects are now reaping the rewards. Nova Home Loans, for example, is a Sun Corridor investor and is currently enjoying a booming real estate market. Nova is tiny in the mortgage business, but powerhouse Quicken Loans is making a similar (albeit much larger) bet with a $500 million investment to the revitalization of Detroit.

When done well, community investment has the potential to improve the factor conditions that enhance a business’s operations and/or productivity, or the demand conditions that dictate the size of the market and/or their financial capacity. In an ideal world, they can do both, simultaneously.

Many organizations put education as a top priority in their corporate giving strategy, but many have probably not thoroughly thought about how education investments might help them grow a larger pool of local talent to meet their own human resources needs (factor conditions) and/or equip their customers with the skillset to make use of their products (demand conditions). In 1997, Cisco donated networking equipment to a local school, but the equipment went unused as nobody at the school knew how to set it up or operate it. This inspired the Cisco Networking Academy, a free training program to educate individuals on how to build and operate a network. The program has helped to educate 12.7 million students in 180 countries, building technical skills in communities, fueling Cisco talent pipelines, and those of potential customers who now have the skills in-house to install and utilize Cisco products.

Most companies are not as lucky as Cisco has been with their charitable investments. They are missing the mark, or are not giving enough to make a real impact on either the community or their bottom line. Corporate giving increased by 13.4% in 2019, totaling $21.09 billion, but as a percentage of profits, this represents less than 1% of corporate profits which topped $2,250 billion in 2019. At corporate giving’s peak In 1986, corporations gave 2.1% of their profits.

Businesses can and should up their game; companies that are more socially responsible are also more likely to successfully market to, recruit, and retrain younger generations. By 2025, 75% of the workforce will be millennials, three-quarters of which indicate they would take a pay cut to work for a more socially responsible company. Where companies focus also matters a great deal as the past year has heightened awareness and concerns around racial justice and equity, with a particular focus on health equity.

“The world is changing, and the expectations of how companies engage are changing,”

- Brandee McHale, Citi’s head of community investing and development.

If we want to have any hope of health equity in America, the private sector must come to the table, and they should be fully prepared to split the bill with taxpayers. This isn’t a stretch if they stop thinking about paying the bill as “charity” and start thinking about it as a good business strategy. Tucson is an example of what can happen when the private sector steps up, brings funding and new skillsets to fill the gaps in the current patchwork of poorly funded public programs. When we pool our collective resources, we can afford an incredible meal. The impact can be truly transformative for our communities, bring economic rewards to businesses that invest, and put us on a faster track to health equity.

Next: Part 5. Previous: Part 3.

Photo collage elements courtesy of Charles Deluvio, Nathan Dumlao, Spencer Davis, and Katie Harp on Unsplash.

40 views0 comments

Recent Posts

See All