Corporate
Philanthropy in the New Urban Economy: The Role of
Business-Nonprofit Realignment by Leonard
Nevarez Department of
Sociology Vassar
College Accepted for publication in
Urban Affairs Review November
2000 On the whole, corporate
philanthropy in the new urban economy indicates civic
divisions within the urban business community; although
tourism modestly aligns to the traditional civic arena,
entertainment and software tend to direct their generosity
and service to outsider nonprofits in, respectively,
environmental groups and higher education. How does this
divided business community and the increasing prominence of
outsider nonprofits affect regime politics? I now examine
new urban economy collaborations with environmental
organizations and universities to advocate local policies
and secure collective goods for these community nonprofits.
I cannot assert a causal argument here, since certainly far
more than civic relationships shapes local policy and
politics. Still, these episodes at least suggest caution in
inferring that a divided business community (alone) makes a
difference for the thrust of urban politics. Defending Quality of Life
Amenities In many ways, business
coalitions with environmental groups lay the ground for
subsequent philanthropy. Thus, for environmentalists, a
primary issue is how to get the new business leaders
initially interested in working with them. Heal The Bay's
executive director described the problem: Software firms' local business
structure is one factor that reduces the chances of
interaction, albeit probably of an adversarial kind, with
environmental groups, since most firms in the research sites
are too small to buy their own properties (which could
trigger land-use permitting and environmental impact
reports) and have no regulated processes or substances.
Consequently, most environmentalists believe that the most
persuasive appeal they can make to these companies lies in
the local context for industry growth: the quality of life.
However, the degree to which this latent interest mobilizes
corporate collaboration varies by sector. Tourism appears most ready to
join environmentalists on issues of industry-wide interest,
since it depends on the natural and aesthetic amenities that
local environmentalists seek to preserve. Thus, many tourism
firms have endorsed various environmentalist efforts, at
least informally. In Santa Monica, tourism firms and
organizations supported lobbying by Heal The Bay and other
environmental groups to require regional businesses to
obtain "stormwater permits" as part of urban runoff and
sewage reduction programs. In Santa Barbara and San Luis
Obispo, both individual firms and tourism organizations
regularly endorse environmentalists' efforts to restrict
offshore and coastal oil and gas drilling. The campaign
manager for an anti-coastal oil drilling initiative informed
me that "all the local chambers of commerce opposed [our
initiative]. The Santa Barbara Lodging Association was a
crucial endorsement to balance the influence that the
chambers had." Many San Luis Obispo hoteliers and other
businesspeople dependent on visitors added their voices to
local protests against "big box" retail stores and a
650-room resort/golf course, fearing that such projects
would mar the coastal and pastoral drives that (many feel)
favorably distinguishes the area from more urbanized areas.
However, industry-wide coalitions usually break down around
protests of individual development projects. As ECOSLO's
director explained: Environmental issues are less
galvanizing for software. Individual firms and industry
leaders may support efforts to protect the local
environmental quality, but with even less unanimity than
their tourism counterparts. Consequently, many residents in
the quality of life-conscious research sites have discerned
an apparent paradox in software firms' reticence. In Santa
Barbara, for instance, new and growing high-tech firms claim
they value the local quality of life and can enhance it as a
clean industry that pays higher than average wages. A Santa
Barbara software trade association's marketing materials are
fairly typical: "[We are] developing a path where
the quality of life and economic vitality of the region
operate together, rather than in opposition." However, some
locals argue that software firms' growth speaks more loudly
than their "commitments" to community well being,
particularly given their weak philanthropy to environmental
organizations. These perceptions threaten the acceptability
of software growth; in at least one public hearing,
community activists were heard to shout, "We don't need more
high-tech growth&endash;let 'em go away!" Amidst this controversy, some
software leaders have looked for opportunities to
demonstrate their industry's good will. One example is Santa
Barbara's recent "Community Indicators" project, which (in
contrast to tourism) represented the industry's only major
collaboration with environmentalists. Designed to help local
decision-makers incorporate and monitor local quality of
life concerns during regional and project planning, the
project follows a model used by a number of other cities.
First, input is solicited from citizens, businesses, and
community leaders to identify "indicators" of the region's
social and environmental quality, from grade school lunch
program participation to indigenous bird species counts.
Then, a steering committee of public and private
representatives operationalizes these indicators (in
addition to more common indicators of economic vitality) and
oversees data gathering. By not regulating the business
or growth of any firms, the project offered a palatable form
of business support for a largely symbolic environmental
effort that entails little economic sacrifice. The origins
of the Community Indicators project, however, reveal the
software industry's concerns about maintaining its political
legitimacy in a community perennially concerned about its
quality of life. The executive director of Santa Barbara's
Community Environmental Council's took advantage of this
growing legitimacy crisis through his honorary seat on the
local software trade association's "leadership
group": Thereafter, the local software
organization became instrumental in implementing the
Community Indicators project: serving on the project's
steering committee and trustees, helping to secure grant
funding for the project, obtaining an economist to conduct
the research, and soliciting business support for the
project's mission. Did software-environmentalist
collaboration around this symbolic effort lay the foundation
for effective policy advocacy? After the Community
Indicators project, a few environmental leaders agreed to
endorse higher land-use densities for software and other
targeted industrial and commercial sectors than local growth
control ordinances previously allowed. In return, the
leading local software trade association committed to
preserving the antisprawl intent of local growth controls by
strengthening urban limit lines and discouraging high-tech
campus development along the coastline. The only notable
policy collaboration after the Community Indicators project,
the new land-use consensus failed to later local land-use
policy for at least two reasons, including a lack of broader
political momentum to make prior changes on additional
policies unrelated to high-tech growth. However, this lack
underscores the second and, for my purposes, more germane
factor; the unprecedented coalition between several software
and environmental leaders proved controversial enough to
threaten disunity among the larger business and
environmental communities. Among the business community,
some developers quickly supported the new land-use
principles, yet others expressed resentment that these
"unfair" policy changes would violate the ethos of investor
prerogative and promote certain developments at the expense
of other kinds. On the environmental side, the new land-use
consensus (inspired, according to its advocates, by New
Urbanism) alienated many slow growth activists.
Subsequently, environmental leaders backed off from their
policy collaboration with the software industry; as one of
them told me, "Seeking new allies [among software
firms] is fine, but if it comes at the expense of old
allies, that's a problem." Briding the Campus/Private
Industry Gap Business collaborations with
higher educational institutions produce more familiar policy
goals, albeit with important consequences for the
traditional urban business community. Consider, for example,
this statement from UCSB College of Engineering's 1996-97
Annual Report of Private Giving: As this suggests, local
universities and other educational institutions seek a
stronger role in supporting the institutional infrastructure
and even the private fortunes of local high-technology firms
in technology sectors (see also Powell and Owen-Smith 1998;
Massey, Quintas, and Wield 1992). To the extent their goal
entails supporting physical expansion for their own or local
companies' facilities, some university administrators may
privately express frustration with the "xenophobia" (a
university administrator's private remark at a local
high-tech trade association event) of local land-use policy.
More generally, university administrators delicately engage
the dominant progressive regimes. The dean of engineering at
California Polytechnic University's San Luis Obispo campus
(Cal Poly) explained to me one reason; in embryonic software
districts like San Luis Obispo, where firms seek any boost
they can get, "the industry is so fragile that it has to
endear itself to both sides." To this end, university
administrators demonstrate their "nonpartisan" perspective
by avoiding taking sides in local politics. UCSB's dean of
engineering, for example, declined to endorse the campaign
of a personal friend, the area's Republican state
assemblyman: "I don't think he was happy with me on that
point, but I felt that was important." Just as importantly,
although they are quick to publicize the benefits of
university-related policy for local business and residents,
university administrators refrain from enlisting the
traditional urban business community's activism. Instead,
they frame their policy goals to invoke new sectors like
software or tourism with more political favor as potentially
"clean" industries and new sources of "jobs for our
kids." Cal Poly's recent real estate
developments illustrate this enlistment. Many of my San Luis
Obispo software informants have been involved in research
collaborations with the university; virtually all the rest
support "bridging the campus/private industry gap" (the
topic of a local high-tech forum). Yet until lately, the
campus did not combine civic and economic roles; town and
gown relations were somewhat chilly, especially with the
traditional urban business community. As a university
administrator told me, Recently, Cal Poly stepped up
its civic presence with two major additions to the local
"amenity infrastructure" (Hendon and Shaw 1987, 215) that,
in the process, has made the university perhaps the slow
growth city's most successful large-scale developer. In
1996, the campus and city jointly funded construction of a
$30 million, 1200-capacity campus performing arts center
that many believe will upgrade the caliber of culture and
entertainment for locals and visitors alike. Although the
center's long-term fiscal benefits remain to be seen,
tourism leaders and other local boosters have already deemed
it a success and anticipate construction of a university
sports complex. Cal Poly also revived a
perennial high-tech research park proposal. Local high-tech
firms had long hoped a university-sponsored project would
have the political "juice" to galvanize support from the
city, which rejected three prior proposals due to potential
growth impacts. To this end, Cal Poly obtained the services
of the Bechtel Infrastructure Corporation, the
internationally prominent engineering and construction firm,
to conduct a feasibility study and lend credibility to the
proposal (Bechtel formerly employed the university
administrator appointed to oversee the study). The study
eventually disappointed local boosters and reassured many
growth opponents when it concluded, "A research park based
on a large real estate development is not an appropriate
model for San Luis Obispo" (Bechtel Infrastructure
Corporation 1998, n.p.). As of this writing, the
university-sponsored research park task force is
investigating ways to establish incubator facilities using
existing infrastructure, in what some call a "virtual park."
In whatever its eventual form, the research park proposal's
fate shows how Cal Poly adds tremendous weight to the city's
modest software industry, whose political, economic, and
organizational resources pale in comparison. Even the
chamber did not let members' frustrations with Cal Poly
overshadow its stakes in the R&D park; it coauthored a
city study investigating the quality of the local
technological infrastructure for the R&D park and local
high-tech industry. However, the chamber hardly represented
the largest beneficiaries of a new R&D park, and its
resources arguably added little to the proposal's
momentum. 6. Another source of
business-university conflict has been Cal Poly's for-profit
business ventures. Cal Poly's president recently closed a
university-backed marketing firm only three months after it
formed, when the chamber of commerce and other San Luis
Obispo businesses (including Cal Poly contributors)
protested its public sector competition. For reasons such as
this, only 15% of San Luis Obispo chamber members agreed
with a recent survey statement, "I believe we can trust Cal
Poly to do what's in the best interest of our community"
(reported in Jones 1997). Back
to text.
in Regime PoliticsTo be
honest, we're completely ignorant of how to really
make that connection with the high-tech industries.
That's not to say we don't get a check here and there,
but from the standpoint of real regular support and
involvement, say, even at the board level, to find
someone in his or her 20s [who] has really
made a mark at that point and could really help our
organization understand technology and see how it can
work for what we're doing, we haven't crossed that
bridge; we haven't figured it out.
[On
land-use issues in general, tourism endorsement]
is pretty much a NIMBY thing. So, if they're talking
about a development on the beach in south county, you
may have some hotels that fight it for competition
reasons, but not for the principles of land use or
sustainable resource management kinds of things.... In
general, the tourism industry, I have found... is
pretty much progrowth, prodevelopment, pro-large
resorts, pro-large golf courses, pro pretty much
anything that will attract lots of visitors, without a
lot of discretion.
One of the
things I've been doing is really haranguing them and
saying, "You know, you guys keep talking quality of
life&endash;what do you mean? Define yourself?" And
they give me, "I don't know how." And here, here's the
Indicators program; this is what it's about. It's
about defining the quality of life, sustainability,
community, whatever. It's a broader measurement of the
standard of living; if the standard of living goes up,
everything is good. And I had a number of
conversations&endash;well, one in
particular&endash;with [the trade association's
founder] saying, "This is a step in this process,
and you guys really need to be doing it as part of the
[trade association], because you're saying
that economic development supports quality of life,
but you're not saying what that means. And so no one's
going to trust you."
The College
is dedicated to building a solid high-technology
community on the South Coast. The synergy between the
community and the College is reflected in the critical
role it has played in the development of [two
local software organizations]; the existence of
over 25 local companies founded by College alums or
faculty; its proactive outreach into primary and
secondary schools; and the tremendous talent pool and
intellectual capital made available to the
community.
We
existed in our own little island here and didn't pay
any attention to what was going on. We didn't have to,
because all of our money came from outside, all our
support came from outside, and we sent our projects
back outside. So we didn't do a very good job of
letting the locals know what we were producing, and
we're trying to turn that around now.6