Southern Cities Economic Inclusion Initiative Round One Report Out

In May of 2022, the Federal Reserve Bank of Atlanta's Community and Economic Development team hosted the first convening of the Southern Cities Economic Inclusion Initiative (SCEI) in Birmingham, Alabama, in partnership with the National League of Cities (NLC), the Annie E. Casey Foundation, and the W.K. Kellogg Foundation.¹ Over the two years following that event, southern mayors, city managers, public servants, and community-based organizations continued to come together through the SCEI to access subject matter experts, build a network of peers, and address economic inclusion challenges in the region. SCEI teams from cities such as Montgomery, Alabama, Tallahassee, Florida, and Savannah, Georgia, worked to develop southern-specific strategies that address economic disparities, many of which are correlated with race, ethnicity, and geography. Over the two-year initiative and the months following, partners have been working together to help participating cities achieve their economic inclusion goals.² Atlanta Fed President Raphael Bostic noted, "as a southern-based institution, we are proud to be part of an effort to help national institutions invest in and partner with southern cities to build networks that unite leaders from across the region, and create more-and more equitable-economic development."

Atlanta, Georgia: SCEI participants review data visualizations about their cities.

SCEI Components

Collaboratively, between 2022 and 2024, partners planned and held five, in-person, multi-day convenings across the Southeast, facilitated peer learning sessions, analyzed and shared data, developed case studies to contextualize real life examples, and delivered on-site technical assistance to SCEI cities. Nearly 100 individuals-including business leaders, mayors and elected officials, non-profit executive directors, and city government staff members-learned through bespoke curricula, materials, and group exercises that brought best practices and cutting-edge strategies like adaptive leadership techniques to those working on the ground with community members to help increase the economic mobility and resilience of people and places in the South. Cities participated in monthly virtual meetings to discuss strategy, progress, and roadblocks; received virtual and in-person technical assistance; and learned about data analysis, resources, and research.

Mayors, business leaders, and non-profit executive directors completed mandatory reading assignments of key leadership literature, including Leadership on the Line and Switch, so that they could learn from each other's experiences with shared language, understanding, and new tools to be even more impactful in their roles. The Annie E. Casey Foundation tested a prototype of an economic inclusion assessment for local governments, whereby cities inventoried their current policies related to several economic inclusion strategies that can yield positive outcomes for low-income people, women, and people of color, like inclusive procurement practices.³ Participants learned about concepts like targeted universalism as a key principle to help ensure that when cities aim to achieve an overarching outcome for their citizens, like increasing small business ownership, those individuals for whom data demonstrates have the greatest disparities in achieving that goal are at the center of any policy designed to address it.⁴

"[SCEI] has reinvigorated me. It has added to my resolve that this is important work, that it's a journey and not a destination, and that there are other cities that are struggling with the same challenges in their communities and that we have to continue to use best practices, to use data, to be able to use stories, to be able to get there… we have, I think, an extended library of proven practices and policies that will allow us to really take this work onto the next level," SCEI participant Mayor Van Johnson of Savannah, GA.

During the program, cities collectively received over $700,000 dollars from funding partners to help implement their work.⁵ Cities then leveraged those dollars 1:1 to acquire an additional $700,000 dollars from other sources, including the Federal government and community-based foundations to further the impact of their work, resulting in a $1.4 million initiative. A third party-evaluator conducted surveys and interviews of participants, and analyzed course feedback to help understand the benefits of the training for participants and opportunities for additional topics to be covered and different approaches to be piloted in future sessions.

Achieving Results and Impact

SCEI set out to 1) create and strengthen a network of individuals working with cities to increase economic inclusion across the Southeast, 2) develop support teams to implement and highlight effective Southeast models, 3) utilize data-informed decision-making, and 4) conduct and facilitate research and evaluation. Benefitting from Federal Reserve Bank of Atlanta staff expertise and data resources and NLC technical assistance, cities refined their economic inclusion strategies and learned about topics such as the Community Reinvestment Act, capital absorption, supplier diversity, workforce development, and data visualization.

"One of my favorite things about working with SCEI is the ability to have resources now. Being from Patterson Louisiana, we have a population of around 5,900. So we have big dreams and big hopes to move our city along. However, we never had the resources, and by working with this team, we now have the resources and the ability to make the right contacts and find the right content and helping us be able to push our dreams into reality, and not just being about talking about it, but also getting the work done," SCEI participant Holden Murray from Patterson, LA.

Early outcomes varied based on participants' focus areas. Some cities, including St. Petersburg, Florida, Savannah, Georgia, and Chattanooga, Tennessee, used principles from the initiative, like the importance of fostering authentic community engagement, in approaching planned development opportunities in their cities. Meanwhile, some cities applied their adaptive leadership learnings to challenges they did not anticipate at the onset of the initiative-for example, Jackson, Mississippi, which experienced an "adaptive challenge" when flooding at the city's largest water treatment plant and decaying infrastructure resulted in a public health crisis.⁶ Another city used Fed data visualizations to gain a better understanding of their city demographics and thus altered their workforce development strategy to include a program for high school students for trades apprenticeships with the city.

Following the conclusion of training and SCEI activities, in July 2024, the City of Knoxville issued a proclamation noting that the Cities of St. Petersburg, Florida, Chattanooga, Tennessee, Knoxville, Tennessee, New Orleans, Louisianna, and Norfolk, Virginia, as part of the National League of Cities Southern Cities Economic Inclusion initiative, reaffirmed their commitment to the advancement and empowerment of Diversity Business Enterprises.

Lessons Learned

Throughout SCEI, partners identified several lessons that emerged over the two-year program, including:

• The path SCEI forged, as with any cross-sectoral collaboration, was not linear.⁷ Cities tweaked or modified their initial economic inclusion goals and SCEI facilitators adapted programming to meet evolving needs. Of the initial 16 cities that were selected to participate in the program, only one was unable to complete all the cohort requirements, with the remaining 15 cities completing the program. Extending the planning phase and building a small element of attrition into future iterations will help ensure that all city participants are able to complete required elements of future programming.
• Long term economic disparities challenge inclusion efforts. The socio-economic challenges facing the residents of participating cities are long standing. For example, research from the Federal Reserve Board of Governors highlights that the wealth gap between White households and other minorities has widened in the United States over the past several decades, whereby, "the average Black and Hispanic or Latino households earn about half as much as the average White household and own only about 15 to 20 percent as much net wealth." Some of the greatest opportunities to capture the benefits of closing economic inclusion gaps reside in the Southeastern United States. If addressed, "more expansive inclusion opportunities improve the financial well-being of both consumers and small businesses, thereby contributing to overall economic growth. "
• Sharing lessons and best practices broadly needs to wait. While the partners initially hoped to be able to publicly share the work in real time with external stakeholders, it became apparent that implementing the work before sharing results was imperative. SCEI partners prioritized delivering technical assistance to program participants and gave efforts time to mature before sharing outcomes. Report outs on the program's progress only became possible once training activities concluded. In future rounds, report outs will be part of broader strategic communications plans.
• Achieving a more inclusive economy across the Southeast will take longer than 18 to 24 months and will require cities across the region, not solely those who opted into SCEI, to work toward that end. SCEI was designed to provide community leaders with tools and networks to be even more effective on their journey, as they work to overcome the long standing economic barriers, which continue to have "meaningful and lasting effects on the development of urban neighborhoods through reduced credit access and subsequent disinvestment." To achieve an economy that works for everyone, more must be done across the south to improve economic mobility and resilience.

Atlanta, Georgia: SCEI participants discuss data and strategies to help increase economic mobility and resilience.

The Future of SCEI

After a successful iteration of the SCEI program, there remain tremendous opportunities to do more to advance the economic mobility and resilience of southern cities and the people who inhabit them. As President Bostic notes, "there are people across this region who are deeply committed to the places they live, and like the Atlanta Fed, they want to achieve an economy that works for everyone." Knowing these factors, the Federal Reserve Bank of Atlanta looks forward to continuing to work with cities in the Sixth District that participated in the first round, and planning for a future round of the program with its partners.

If you are interested in learning more about the first iteration of SCEI or how to participate in the program, please sign up for our newsletter, and visit the following National League of Cities webpage https://www.nlc.org/initiative/southern-cities-economic-inclusion-scei-expanding-capacity-building-resilience/.

By Charlene van Dijk, CED senior adviser, and Monica Evans, CED senior adviser. The views expressed here are those of the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility.

¹ Charlene van Dijk, "Initiative Focuses on Economic Inclusion," Partners Update, The Federal Reserve Bank of Atlanta, 2022, https://www.atlantafed.org/community-development/publications/partners-update/2022/05/26/initiative-focuses-on-economic-inclusive.

² Participating SCEI Cities included: Birmingham, Mobile, and Montgomery, Alabama; St. Petersburg and Tallahassee, Florida; College Park and Savannah, Georgia; Baton Rouge, New Orleans, and Patterson, Louisiana; Jackson, Mississippi; Chattanooga and Knoxville, Tennessee; and Danville and Norfolk, Virginia.

³ Rosanna Mulcahy and Jordyn Battle, "Towards Resilient Economies: Southern Cities' Commitment to Inclusive Procurement," National League of Cities, June 25, 2024. https://www.nlc.org/article/2024/06/25/towards-resilient-economies-southern-cities-commitment-to-inclusive-procurement/.

⁴ John A. Powell, Stephen Menendian, and Wendy Ake, "Targeted Universalism: Policy & Practice," Othering & Belonging Institute, University of California, Berkeley, 2019. https://belonging.berkeley.edu/sites/default/files/2022-12/Targeted%20Universalism%20Primer.pdf

⁵ SCEI is a collaboration between the National League of Cities and the Federal Reserve Bank of Atlanta, with financial and strategic support from philanthropic partners. The Federal Reserve Bank of Atlanta does not provide funding, nor does it participate in participant selection or decisions of grant funding of SCEI participants.

⁶ For more information about adaptive leadership, see Ronald A. Heifetz and Marty Linsky, Leadership on the Line: Staying Alive through the Dangers of Change, 2, Harvard Business Review Press, 2017.

⁷ Laura Choi's examination of a similar program also shows how collaborative work is cyclical, not linear. See "Testing Our Hypotheses on Equitable Development: Midcourse Learning and Adapting Through SPARCC," Community Development Research Brief, no. 01 (2019): 01-19, https://doi.org/10.24148/cdrb2019-01.

⁸ Aditya Aladangady and Akila Forde, "Wealth Inequality and the Racial Wealth Gap," October 22, 2021, https://www.federalreserve.gov/econres/notes/feds-notes/wealth-inequality-and-the-racial-wealth-gap-20211022.html.

⁹ "How Much Could US States Gain by Closing Racial and Gender Gaps in the Labor Market?," Fed Communities, June 21, 2021, https://fedcommunities.org/data/closethegaps/.

¹⁰ "Speech by Governor Bowman on Promoting an Inclusive Financial System," Board of Governors of the Federal Reserve System, accessed December 23, 2024, https://www.federalreserve.gov/newsevents/speech/bowman20240709a.htm.

¹¹ Daniel Aaronson, Daniel Hartley, and Bhash Mazumder, "The Effects of the 1930s HOLC "Redlining" Maps (REVISED August 2020)," Working Papers, no. 2017-12, 2017, Federal Reserve Bank of Chicago, 2020, https://www.chicagofed.org/publications/working-papers/2017/wp2017-12.

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