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 As in many other communities
facing economic restructuring, many community informants
expressed concern that the new urban economy portends an
overall decline in corporate philanthropy. My findings
suggest that their concerns are warranted only if locals
define "civic responsibility" as participation in usual
nonprofits embedding traditional urban regimes. Many firms
from the new industries are currently "doing good" in the
community&endash;just not through the traditional urban
business community's favorite charities. The new
philanthropy shows how local business structure represents
the intervening variable in this process. Of the three new
urban economy sectors, tourism depends most on local
markets, which suggests a business rationale for supporting
the traditional charities that are strongholds of the older
business community. By contrast, software and entertainment
do not depend on local markets for their business; their
autonomy from local business relations finds civic parallels
in their philanthropic alignments with outsider nonprofits
like higher educational institutions and environmental
organizations, respectively. Generally, only self-appointed
political leaders from software sectors support traditional
charities, since they seek resources from the local business
community. The characteristic of business structure that
seems to align business with traditional charities, then, is
dependence on traditional local markets and local elite
networks. Although software and
entertainment do not depend on these particular social
relations, this does not mean they lack local dependence
more generally (see Cox and Mair 1988). Their philanthropy
illustrates how these sectors depend on face to face
interaction that takes place locally through college
advisory boards and environmental fund-raisers (cf. Boden
and Molotch 1994). In the research sites, firms in these
sectors also depend on local "quality of life" that affords
employee hiring advantages and personal lifestyle
opportunities (Nevarez 1999). Tourism sells local quality of
life to visitors; perhaps for this reason, it fails to
remain in strident coalitions with the traditional urban
business community. The apparent contradiction that locals
witness when, for example, software companies move to Santa
Barbara for the local quality of life and then threaten it
by promoting software growth only points to how global firms
and local residents socially construct local dependence on
quality of life from different interests. As I hope is now apparent, the
new philanthropy has profound implications for the ecology
of games that traditionally privilege urban business
communities (Long 1958). Whereas previous research (e.g.,
Whitt and Lammers 1991, 283) suggests that local business
leaders support nonprofits that they regard as catalysts and
generators of redevelopment and growth, my study
demonstrates that common policy objectives do not
necessarily produce regime cohesion. The latter must be
socially produced through selective incentives,
interorganizational networks, and common understandings
about the nature of community politics. This is exactly what
the new civic alignment has begun to establish, albeit among
actors whose relationships were previously antagonistic or
nonexistent. Environmentalists and university administrators
solicit funds and service from the new business elites; in
return, the latter look for social legitimacy and political
mobilization that nonprofits can offer. Although some locals
fear that new business-nonprofit alignment may break
historic growth limits, the traditional urban business
community nevertheless remains peripheral in this alignment.
These patterns signal potentially significant breaks in the
politics of my research sites. Before they can be theorized
as characteristic of the new urban economy, future research
must address at least three issues regarding
business-nonprofit alignments outside the traditional civic
network. The first involves the
traditional urban business community's declining role in
directing local philanthropy and civic cooperation. By
diverting money, service, and sentiments to nonprofits
outside the traditional civic arena, the new urban economy
sectors erode the civic centrality and control over
selective incentives that empower the traditional urban
business community (see Stone 1989, 192-193). Does the new
urban economy permanently weaken the traditional urban
business community's hegemony in civic affairs? Two factors
seem relevant to this question: how long new urban economy
firms stay in the community, and whether the traditional
urban business community can reverse their declining role.
Some community informants expressed confidence that the new
firms and business leaders will eventually resemble the
civic and political profiles of traditional business elites
once they have "been here long enough." Their hypothesis
that traditional civic participation varies inversely with
geographic mobility may be true, although structural trends
like high employee turnover, firm instability (failure,
acquisition, etc.), and sectoral turbulence may not produce
the outcomes they anticipated. Perhaps more likely, although
limited in scope, is the scenario that the older business
community will learn to intervene in the gravitational pull
that environmental and higher educational organizations
exert on new urban economy firms, if not entirely usurp
these nonprofits' role. Second, some forms of
business-nonprofit alignment are more divisive than others
in process and objectives. Although the quality of life
consensus forged by environmentalists and new urban economy
sectors was often ephemeral, ambiguous, and potentially
contradictory, it remained alien to many members in the
traditional urban business community loath to let go their
hostility to "antigrowth" sentiments. These old business
leaders had good reason; insofar as quality of life
sentiments encourage calls for development restraints, they
"unfairly" hurt some kinds of industry and violate the
cooperative principle of investor prerogative (Stone 1989,
171). However, the new quality of life consensus also
threatened the unity among environmental and progressive
allies, thereby limiting its viability to symbolic efforts
like the Community Indicators project. By contrast, the
universities and colleges I studied had a far easier time
securing local consensus to construct research parks, sports
stadiums, performing arts centers, and other big
developments by claiming their projects would benefit local
industries and the community at large. Although they did not
include the traditional urban business community in the
process, their development goals did not threaten the older
business community's prosperity either. This points to the
need for further research on how policy agendas forged by
coalitions outside the traditional civic network sustain
legitimacy among, if not participation by, third parties
like the traditional urban business community. The final issue for future
research brings the political domain back into the analysis
to investigate how business-nonprofit realignment and the
disunity of urban business communities strengthen the
capacities of progressive regimes, if in fact they do.
Stites (1997, 539) has argued that regime theory's
"categories of policy orientation (progrowth, progressive,
caretaker) run the risk of mistaking shifts in the
form of policy (which may be fairly frequent) for
shifts in the major beneficiaries of policy (which
are less frequent)." His claim is relevant to
business-nonprofit alignment as well. Before they broke with
the new land-use consensus, Santa Barbara's business-favored
environmentalists faced strong pressures to endorse the new
urban economy's growth, even if they opportunistically used
their newfound leverage to advance environmental goals. This
suggests that the cooperative and consensual nature of
politics in the civic domain, so vital for attracting
corporate philanthropy and endorsements, compels progressive
nonprofits to concentrate their civic capacity on economic
development, or what Ferman (1996, 145-149) calls
"conservative progressivism." More generally, philanthropy
reflects and reproduces the perpetual asymmetry of money and
resources between civic/public and private actors that gives
business a consistent upper hand in urban politics. This
suggests that, beyond its impact on the traditional urban
business community, the new philanthropy may not portend
progressive directions for urban politics. More research
needs to address how business support for progressive
nonprofits ultimately benefits the political regimes they
help sustain.
in Regime Politics