Fall 2006

Fall 2006

Spend shift

Over the past century, shelter has replaced food as our biggest household
budget buster

A long line at JP Licks is an inconvenience, but it may also signal a turning point in Boston’s spending habits. While the rest of the country spends less and less on food, we’ve started a reverse trend, devoting more of our paychecks to eating in and dining out—which may explain the recent proliferation of high-end restaurants, Whole Foods supermarkets, and premium ice-cream shops in the area.

But across America, and even in Boston until quite recently, the percentage of an average household’s income spent on food has steadily declined. This trend reflects “improved living standards,” according to the authors of a recent report from the US Department of Labor, titled 100 Years of US Consumer Spending: Data for the Nation, New York City, and Boston. The report is generally as dry as toast, but it is full of tidbits that demonstrate how much the Hub has changed over the years, and how it was, and is, different than the rest of the nation.

Take, for example, my favorite sentence in the 71-page report, referring to present-day spending habits: “In buying groceries, New Yorkers allocated more for meat, poultry, fish, eggs, fruits, vegetables, cereal, and baked goods than did Bostonians, who spent more on…dairy products.” (Ellipses added because the US Department of Labor would never pause for comic effect.) In other words, we’re pigs when it comes to ice cream. We even insist on turning clam chowder into a dairy product.

And while Boston is like the rest of the nation in benefiting from lower grocery prices over the years, we may be developing more expensive tastes to compensate. In 1901, the average American household spent $327 for food, which accounted for 42.5 percent of all spending. Since the average household was in the red that year—spending $769 while receiving $750 in income—it’s not likely that much of that food bill went to gourmet items. As of 2003, the average annual food bill in the US was $5,357, based on data from the Consumer Expenditure Survey (CES), but that represented a record-low 13.1 percent of all household spending. In Boston, however, an opposite trend was beginning. After bottoming out at 11.6 percent of all household spending in 1997, the food section of the pie chart was up to 13.5 percent in 2003. In five years, annual spending for comestibles went from $4,297 to $5,627, greatly outpacing inflation in the same category at the national level ($4,750 to $5,357). Breaking down the grocery bill by food groups, 27.3 percent went to “meat, poultry, fish, and eggs,” down from 48.4 percent in 1901. “Cereals and bakery products,” which accounted for 11.0 percent in 1901, was up to 15.0 percent. Since there are fewer children—and certainly fewer livestock—in Boston now, I’m guessing that more of the increase was due to dessert than to oats and shredded wheat.

Bostonians didn’t just buy more ice cream cones in 2003. Annual spending in almost every major CES category increased from 1997 levels. Transportation went from $6,698 to $7,175; health care rose from $1,753 to $2,007; and “reading and education” went from $862 to $1,281, though the report doesn’t say whether that extra 400 bucks went to preschool classes or subscriptions to Lucky magazine. Even annual spending on alcoholic drinks ($504) and on tobacco ($273) was up in these supposedly abstemious times—and those were the only two categories in which Bostonians spent more than New Yorkers. The only place where people in Boston appear to be cutting back is in clothing: Hub residents spent $1,610 on “apparel and services” in 2003, a cool grand below the New York average of $2,638 and slightly below the national average of $1,694. No wonder Filene’s Basement has outlasted Filene’s itself.

For the most part, 100 Years of US Consumer Spending is the story of how most Americans have been benefiting from rising incomes even as some of the things we can’t live without have been getting cheaper and cheaper (in constant dollars). In 1901, the average American family devoted 79.8 percent of its expenditures toward “necessities”—food, clothing, and shelter. In New York, that figure was 80.3 percent; in Boston, it was 86.0 percent. Fast-forward to 2003, and you’ll see why there’s such a big market for iPods and SUVs. The average American family devoted only 50.1 percent of its spending toward necessities. In New York, the figure was 56.7 percent. But the biggest drop was in Boston, which passed New York on its way down to 53.8 percent.

To a typical household at the beginning of the 20th century, income was something that said a quick hello and even quicker good-bye. But these days, more of it hangs around while people figure out what to do with it. “Between 1901 and 2003, the average US household’s income increased 67-fold, from $750 to $50,302,” the authors write. “During the same period, household expenditures increased 53-fold, from $769 to $40,748.”

That comparison might actually understate the growing gap between what we have and what we need. A pound of butter, part of Boston’s favorite food group, costs only a bit over 10 times what it did a century ago. In 1901, it was 27 cents, or four cents more than the average hourly wage of a factory worker. Three years ago, it was up to $2.81, or about 12 minutes’ worth of work for the average factory worker.

Butter is also a cheap way for waitstaff to pacify us when we go out to eat, which we do with a frequency that would astonish—well, pick any generation that came before you. As Barbara Ehrenreich put it in Nickel and Dimed, “if you wonder why Americans are so obese, consider the fact that waitresses both express their humanity and earn their tips through the covert distribution of fats.” In a similar vein, a few months ago the Federal Reserve Bank of Boston released “Social Dynamics of Obesity,” a paper by economists Mary Burke and Frank Heiland that argued a correlation between lower grocery bills and bigger girths in America. The authors hint at a reverse-Malthusian nightmare in which both our pantries and our bodies take up ever more space: “…[T]he body-weight standard becomes more relaxed as average weight increases in response to a food price decline; the relaxed standard then leads to further weight increases.”

Some of the things we can’t live without have been getting cheaper and cheaper.

Then again, perhaps the falling cost of entertainment is more to blame for our sedentary lifestyles. The AP reported in September that the average American home now has more television sets (2.73) than people (2.55), which must have something to do with the fact that a Magnavox 21-inch color set cost $495 in 1955 and a Samsung 19-inch set cost $340 four decades later, despite the fact that average household income was 10 times higher. But it seems that cheaper diversions only fuel the desire for more of them. In 1901, the average American household spent $12 a year, or 1.6 percent of all expenditures, on entertainment (not including reading material); in 1950, when TVs were starting to go mainstream, that figure was up to 4.4 percent. And in 2003, despite the lower cost of electronics, the share was up to 5.1 percent, or $2,069 a year, a trend that was pretty much the same in Boston.

If costs have plummeted for food and clothing—the latter replaced by transportation as one of the Big Three—the same can’t be said for shelter. In 1901, housing (a category that includes fuel and furniture) ate up 23.3 percent of an average American household’s expenditures, and the figure was 29.9 percent in Massachusetts. (Specific figures for Boston don’t go back quite that far.) By 1960, it had taken the lead as the costliest part of a family’s budget, up to 29.5 percent nationally and 31.4 percent in Boston, and it has only strengthened its claim on first place since then. In 2002, the cost of the roof over one’s head and the pipes beneath one’s feet was at 32.8 percent of all household expenditures nationally and 36.4 percent in Boston. The average household in Boston spent $15,211 on housing that year—significantly higher than the national average of $13,359, but still well below New York’s $18,919. Two-thirds of that went to mortgage or rent payments, with the remaining money split among utilities and fuels ($2,676), furniture ($1,212), and “household supplies” ($1,179).

Of course, the increase in housing costs has been accompanied by some pretty significant changes in what makes an average household. In 1901, only 19 percent of Americans owned their homes, a figure that was surely lower in a major city such as Boston. By 2003, two-third of American households, and 59 percent of Bostonian households, were property owners. And at the start of the 20th century, the average American household included 4.9 people; now the average is little more than half of that, and Boston is especially roomy, with 2.3 people per household.

These changes don’t completely make up for the fact that home prices and rents have outstripped inflation during the past few decades, and the higher housing costs in Boston versus the rest of the US don’t make it easy to keep families here. But at least we don’t have to deal with two household costs each eating up more than a third of a typical family’s annual income.

THE LONG VIEW

THE LONG VIEW

boston’s recovery from the last recession has been slow and uneven. Some sectors of the region’s economy have crept back to pre-recession employment levels, while others—notably, information technology—remain below early 2000 peaks. More importantly, the road back has been marked by worrisome signs of ground lost to other regions, with a number of major hometown institutions acquired by out-of-state buyers. Just as painful are certain byproducts of the good times, such as high housing costs and property taxes, that linger like a hangover from a drinking binge.

What to do about this situation has already become a staple of the campaign trail, with candidates vying to offer solutions. Anxious politicians, public officials, and residents have fixated on the housing issue, for instance. Hundreds of gallons of ink have been spilled on stories analyzing the lack of affordable housing and its impact on the state’s economic future, and a search of local newspaper headlines found that housing grabbed the headlines 321 times in 2005. Rarely is it noted, though, that other areas considered our competitors—the San Francisco Bay area, New York, Los Angeles/ San Diego—have equally expensive housing markets but far less angst about it. Inhabitants of those cities seem more secure in the knowledge that folks will pay a premium to live in San Francisco or Manhattan, and that housing costs alone will not determine their economic futures.

Maybe it’s our New England pessimism, but we seem to be stuck in a self-doubting moment. Almost daily we wince our way through articles and reports about unaffordable housing, out-migration, and our struggling job market. What we don’t read much about is the attribute that has seen Greater Boston through 400 years of housing bubbles, depopulation, recession, war, and industrial revolutions: its ability to innovate its way to economic prosperity. Our region has the longest-running record of success of any major urban region in the US, and it is one of the leading centers of innovation in the world. Yet you would never know it from our current public discourse. In the same search of local papers from last year, “innovation” made the headlines a scant 17 times.

Boston has been counted out many times in its 400-year history, but it has always come back. How did we innovate ourselves out of tough times in the past? How do we know today that we have the right stuff for the next phase of reinvention that will be needed?

Fortunately, we do not need to face these questions alone. There are hundreds of innovators from our past four centuries who can coach us through our present and future trials. They all experienced challenges of comparable import in their day. They fought to reshape the world they lived in. And they are eager to talk to us, to share their lessons, and to offer their unconditional advice. All we have to do is listen and learn.

Boston’s history can be divided into nine eras (see timeline sidebar). Over the past year, the Boston History & Innovation Collaborative (BHIC), in partnership with the Massachusetts Technology Collaborative’s John Adams Innovation Institute, has analyzed this nine-era history through the lens of innovation, both economic and social. Our analysis builds on the groundbreaking work by Harvard’s Ed Glaeser (“Mother of Reinvention,” CW, Fall ’03). Glaeser’s analysis and our own research point us toward four major episodes of economic and social reinvention that characterize Boston’s history:

  1. 1630s-1640s: Boston evolves from a failed farm town to a community with a strong maritime-based economy.
  2. 1780s-1805: The city loses 85 percent of its population and access to trade routes during the Revolution. The China Trade, transportation breakthroughs (major canals and bridges), and financial innovation drive a recovery.
  3. 1850s-1860s: Boston’s sailing expertise is made obsolete by steamship improvements. Shoe and textile manufacturing become mainstays of a stronger regional economy.
  4. 1950s-1980s: The manufacturing sector declines. Research universities, hospitals, high-tech companies, and financial services lead the region back.

In sum, Greater Boston’s economy was devastated four times and came back stronger each time.

Looking at the nine eras of Boston’s history, each had a particular character, with a distinct economic and cultural profile. Often, a cluster of related-industry innovations characterized each period.

For example, when the Great Migration of British Puritans to Boston ended in 1641, the Massachusetts Bay colony experienced what economists call a stochastic shock. Until that point, economic growth depended on perpetual immigration. The influx of new colonists drove up the prices of land and cows in the possession of early Boston farmers, creating a land-and-cattle bubble in the 1630s. However, Oliver Cromwell and the Puritan Revolt brought an abrupt end to the Great Migration, along with the Ponzi scheme driving the growth of the colony.

A failed farm town turned into the capitol of cod.

Similar collapses of immigration-fed growth had driven Roanoke and Jamestown to extinction, but Boston did not disappear. Rather, a resilient and creative Massachusetts colony built a sustainable shipbuilding and shipping industry within a few short years, the result of a series of key innovations. Merchants seized on a locally abundant product, salt cod, and sold it to Iberian markets, where it was in great demand, and the Winthrops expanded this trade to the West Indies, where the fish became a staple of the slavery-based plantation colonies. Local artisans and craftsmen provided the labor and expertise for a new shipbuilding industry. America’s first ironworks was imported to Saugus from England in 1646. It was a cutting-edge facility that produced iron parts for shipbuilding, as well as nails, kettles, and fences for domestic use and export. By 1720, Boston was the third busiest port in the British Empire, after London and Bristol, and the largest town in North America. Boston’s first major reinvention, from farm town to maritime power, was complete.

Approaching the start of Boston’s fifth century in 2030, we must ask whether the region would be prepared to make a similar transformation if it were necessary. Would we be tripped up by the smug provincialism that centuries of visitors have noted and mocked, or would we demonstrate the Yankee ingenuity celebrated by America’s own greatest mocker, Mark Twain, in A Connecticut Yankee in King Arthur’s Court? The answer is not clear, but it is certain we will face future reckonings and cannot hope to take refuge in a glorious past. As MIT professor Fred Salvucci, father of the Big Dig, has observed: “Our smug belief that our history will protect us from change ignores four centuries of cyclical socioeconomic birth, death, and renewal.”

THE HISTORY OF INNOVATION

How does one assess our current and future preparedness for reinvention against the standards of the past? The BHIC approach was to study more than 60 cases of world-changing breakthroughs across Greater Boston’s 400-year history of innovation, which can be seen as an amalgam of science, politics, immigration, and Yankee independence—or, as we termed it in our research, social and scientific interplay. In more than one-third of the cases we studied, the cross-pollination of dynamic entrepreneurs, human capital, a political climate favoring the rule of law and individual rights, and a regional orientation to technological solutions determined why an innovation occurred here.

To test our hypothesis that the interplay between social and scientific innovation has a role in the region’s peculiar ingenuity when faced with adversity, we included social innovations (such as those in the realm of education, civil rights, and community development) among our cases. We wished particularly to understand what Mark Twain called “Yankee ingenuity” in light of the region’s enduring ability to attract and incorporate human capital from other cultures and races, despite notable periods of intolerance, and to elicit an outsized number of innovative contributions from this diverse talent pool.

For example, social and scientific interplay figured strongly in Alexander Graham Bell’s invention of the telephone in 1876. Having taken his father’s study of deaf-mute communication on the road, Bell lived in Edinburgh, London, and Canada before coming to Boston. His father, Melville Bell, set up a meeting with Rev. Dexter King at the Boston School for Deaf-mutes. Together they visited the State House and witnessed an anti-KKK rally in 1871. Taken by the degree of social, educational, and technological progressivism he saw here, Alexander decided to stay, becoming a professor at Boston University. Many collaborated with Bell on his invention: lawyers from downtown, financiers in Cambridge, and scientists at MIT—as well as one Lewis Latimer of Chelsea, a skilled draftsman and the son of runaway slaves.

We evaluated all 60 innovations against 24 possible “drivers” of innovation, rating each driver on a scale of 1 to 5 according to its importance in explaining why the innovation took place. Leading economists and historians were asked to offer their own analysis of each case. The responses were run through a statistical engine to determine which drivers were most critical for each era, and which were critical to the overall history of economic growth in Boston.

Our conclusion: There have been five recurring drivers behind the great majority of significant technological and social innovations in every era of Boston’s history. These “High Five” drivers include:

  • a driving entrepreneur or team of leaders;
  • a local network of people and groups sharing information across sectors;
  • local funding;
  • local demand that the entrepreneur can use to perfect a new idea or product; and
  • national or global demand for the innovation.

Historical examples help to give life to these descriptors. In 1813, the Boston Associates (i.e., driving entrepreneurs) came together to develop the Waltham-Lowell factory system. A group of powerful civic leaders of the time, including Francis Cabot Lowell and Nathaniel Appleton, mapped out a system of textile production that differed from its predecessors in size, process, and labor structure. The American Industrial Revolution was born from it. In 1901, King Gillette invented and developed the safety razor with technological assistance from local chemist and metallurgist William Nickerson and financial support from local millionaire John Joyce (a local network). In 1946, the Boston-born firm Raytheon invented the microwave. While the technology was derived from their federally funded work on radar just a few years before, it was First National Bank of Boston that invested in the microwave (local funding). Dan Bricklin’s invention in 1979 of the first electronic spreadsheet got a boost from the Boston Computer Society (local demand), whose members bought up the VisiCalc spreadsheet, leading Apple to tout Bricklin’s spreadsheet nationally. And in the mid 19th century, as the lucrative trade markets moved farther and farther away, Donald McKay saw the world’s need for faster vessels and designed clipper ships in the 1850s (national and global demand).

Civic leaders revolutionized the textile industry.

In addition, for most of the nine eras, a sixth driver was also involved, which we call the X-Factor. This driver often helps to explain what makes each historical era unique, serving as the public face of the era and complementing the other core drivers. Let’s take a quick look at two of Boston’s most historically significant X-Factors.

Puritan ethos in the 17th century, for example, was the first X-Factor that added to the High Five. The Puritans settled the region with a vision of religious utopia, and they mapped out their civic plans according to their understanding of piety and morality. “Idle hands are the devil’s workshop” is now a common phrase, but to the Puritans it was a very real dictate, prompting a work ethic defined as 16 hours of work, six days per week. Almost all public and private decisions were based on counsel from the scriptures, including Winthrop’s settlement plan for a “City on a Hill” in 1629-30. The Puritan drive to know God by reading scriptures and sermons inspired the establishment of Boston Latin School in 1635 and Harvard College in 1636. This was a contrast with Quaker Philadelphia, where reading was viewed as a distraction from knowing God and where public schools didn’t arrive until much later. The most recent X-Factor, the research universities/teaching hospitals, has interacted with the High Five since the 1940s, helping to make Boston home to one-third of all US biotech patents as of 2000. These X-Factors complement the High Five to promote innovation at particular times in history, but they prevail for shorter periods of time, while the core drivers recur and remain critical over the long haul.

GETTING A BUMP

Perhaps the most striking aspect of the High Five is that four of the drivers are local: entrepreneurship, funding, local demand, and networking. This raises the enticing possibility that more of our economic fate is in our own hands, rather than subject to global economic forces. But is it possible to engineer the High Five into action? We don’t know, and we’re skeptical. The local nature of these key factors does, however, highlight another aspect of the innovation process, which we call the “bump rate.” Basically, the bump rate is the tendency to develop and explore relationships with others, usually across business sectors. When people are in a position to meet, whether serendipitously or by design, they are in a position to more easily share their ideas and services, leading to new products, industries, and social movements. For the bump rate, physical proximity matters.

The bump rate has also played a key role in major social innovations, such as the abolitionist movement in the 19th century. Drawing on David Walker’s Appeal, Boston’s first abolitionist pamphlet in 1829, William Lloyd Garrison published in 1831 what became America’s most widely read abolitionist paper, The Liberator, which is renowned for integrating the abolitionist movement. Attracted to the region’s many activist leaders, Frederick Douglass frequented Boston from New Bedford to deliver many of his famous orations. The bumping that took place in mid-19th century Boston had a significant impact on the Emancipation Proclamation and the ending of slavery, and later on women’s rights, beginning with the suffrage movement—both movements serving to unshackle the American economy from the constraints of archaic and unjust systems of exclusion.

Federal funds boosted our research universities.

In the digital age as well, biotech executives in Cambridge tout the benefits of proximity. Novartis, the world’s largest pharmaceutical firm, scoured the world, considering such sites as San Diego and Burlington, Massachusetts, before deciding on the old NECCO factory in Cambridge for its research headquarters, reasoning that its staff could rub shoulders with scientists from Longwood, Harvard, Boston University, and MIT. Even Burlington was too far away from the benefits of tight proximity, they felt. Companies in such industries are willing to pay a premium to locate here because they understand the role of Boston’s bump rate in bringing innovations to market.

Our research challenges common understandings of the region’s innovation fabric. In light of the High Five, such factors as education, research universities, and local government seem less integral to Boston’s 400-year history of innovation than most of us assume. Meanwhile the region’s persistent reputation for intolerance—religious, racial, cultural—only tells half the story.

Education and Teaching Hospitals/Research Universities. Greater Boston, along with Massachusetts as a whole, has had a long-running commitment to education, dating from the founding of Boston Latin in 1635 as the first free public school in the colonies, and closely followed by maritime trade education. Beginning in World War II, federal funds fueled the growth of the research university, with Boston-area institutions the greatest concentration in the country. It was therefore a surprise to find that none of the possible education drivers were among those considered crucial to our overall history of innovation; in most eras, they fell into a secondary category of drivers, supportive of innovation but by no means determinant. Heretical as it might seem, our conclusion is that higher education institutions are certainly important to the region, but the High Five play a more enduring role.

Local Government. Government, too, has played a key role in many important innovations, yet its role in innovation overall is modest. In judging local government leadership, policy-making, and Infrastructure against the 60 innovations, the Advisory Research Committee saw them appearing occasionally as case-specific drivers, as in Boston Mayor Nathan Matthews’s successful drive to build America’s first subway system in 1897, or in the advocacy of Boston’s selectmen to build Boston Light, a lighthouse on Little Brewster Island, in 1716. But government drivers did not account for the overall culture of success.

Intolerance and Inclusion. Another overstatement is that Boston has repeatedly cast a shadow of intolerance. We did not find that narrow-mindedness limited innovation here to the white, the male, or the native-born. Despite the infamy of Boston’s past—the banishment of Anne Hutchinson for sermonizing as a woman in 1638, Boston merchants’ active participation in the slave trade, Yankee persecution of Irish immigrants, the Sacco and Vanzetti trial that condemned Italian immigrants for their political beliefs in the 1920s, and the busing crisis in the 1970s—Boston boasts a lengthy list of innovators coming out of immigrant and minority populations. Examples include the Scottish ironmongers who made the Saugus Ironworks productive (1640s); Anne Bradstreet, who wrote the first published book in British North America (1650); Onesimus, the African slave who convinced Cotton Mather and Zabdiel Boylston to try smallpox inoculation (1721); Polish doctor Marie Zakrewska, who founded the Boston Hospital for Women (1862); Alexander Graham Bell (1876); An Wang, the region’s personal computer pioneer (1975); Alex D’Arbeloff, who co-founded Teradyne (1980); Desh Deshpande, who founded Sycamore Networks (1990s); and Supreme Judicial Court Chief Justice Margaret Marshall, who wrote the 2004 ruling that legalized gay marriage.

STATE OF THE HIGH FIVE

Our research suggests that, in order to ensure the future health of the regional innovation economy, we need to pay attention to the High Five and the bump rate. But what is the state of the High Five in Greater Boston at the moment? Here’s our analysis:

Entrepreneurs: Our 64 colleges and eight major research universities pump out thousands of potential innovators every year, members of what the Boston Foundation calls the Innovation Generation—college educated, 22-to-34-year-olds, a group that is refreshed by new grads as some grow older. There is concern that many of these young people move away after graduation, partly due to high housing costs, the weather, and or the appeal of other regions. But housing costs are secondary to a dynamic job market, weather is largely irrelevant to true entrepreneurs, and Boston scores high in all of Richard Florida’s “creative cities” criteria. The weak job market, however, is a real concern, and the tough start-up market can make Greater Boston feel like a crucible for entrepreneurs. But innovators want to be where the action is, so the best thing we can do to make entrepreneurs want to be here is to pay more attention to the High Five and less to issues over which we have less control.

Local Network: This is an area where Boston has historically been strong. But today, many fear that our networks have become anemic, whether because they admit too few (old boys’ clubs) or because, as corporate headquarters locate elsewhere, they wield less power locally. The Innovation Generation will tell you that the West Coast and New York are outperforming on this score, and that Boston’s institutions—civic and corporate—are out of touch. Some civic and business leaders are already focusing on building a modern-day version of the Vault, but we see a need for a spectrum of networking channels for future innovators, particularly for talented people of color, who often perceive Boston’s power structure as closed to them.

Local Funding: The financial backing of local institutions and investors has been a huge part of Boston’s innovation success. This strength has taken a hit recently, with major financial institutions bought by out-of-state firms and others choosing to move large parts of their operations out of the region. Venture capital firms were invented here and bankrolled many of the most significant innovations and companies of the past 60 years. However, they have become more conservative since the dot-com bubble burst, moving a lot of their money to later-stage innovations, or even offshore to Bangalore or Beijing. This is a real area of vulnerability.

Local Demand: Many may think that, in a global economy, local demand is no longer a critical factor. Historically, however, most major innovations began in response to local needs and later spread to a larger market (e.g., VisiCalc). Local demand is often what allows a product or innovation to be tested and optimized before it’s ready for the national or world market. The wealth of health care institutions in Greater Boston provides ready customers for the products developed by our biotech and medical devices industries. If these sources of local demand were to weaken or leave, we would lose a major reason for entrepreneurs to be here.

National/Global Demand: With our innovation industries of health care and life sciences reaching maturity, built on a foundation of several research universities and teaching hospitals, Greater Boston would appear to be well positioned to ride the next wave of national and global demand in industries that have high potential for future growth. This driver can never be taken for granted. At the same time, it is not one that can be greatly influenced on a local basis. It is better to focus attention on the four of the High Five that are receptive to nurturance here at home.

AN INNOVATION AGENDA

Are the bump rate and High Five things we can control? Can we translate the historic alchemy of social and scientific interplay into some sort of coherent civic policy? The short answer is we don’t know yet—but that won’t stop a scrappy little outfit like the Boston History & Innovation Collaborative from giving it a try.

We have formed a group of 40 individuals from the region’s industries, universities, foundations, media, and institutions of art and culture, called the Boston Fifth Century Trustees, who have begun to join in collective action toward sustaining Boston’s position as a center of innovation. Inspired by the belief that a strong grasp of history will help anchor the process of future planning, which can sometimes feel groundless and arbitrary, the trustees have signed on to an “innovation agenda.” Already, two trustee-led task forces are tackling the serious venture-financing gap facing early stage entrepreneurs, particularly in the life sciences, and exploring the little-understood role of diversity in driving innovation in the region’s economy. A third task force, focused on making the region a hub of wireless Internet access, or WiFi, adjourned with work completed when Mayor Tom Menino announced in February an initiative to make Boston a universal broadband city.

Finally, because the gubernatorial candidates are now jostling over who has the best ideas about how to jumpstart Boston’s innovation economy, we will be offering up our own proposals. Here are two, free to the first taker:

Reach for the Ring. The Urban Ring is the biggest of the unfilled promises made to the region’s citizenry when they agreed to endure the Big Dig. A transportation system connecting the major university, research, and hospital institutions through a new subway, an enhanced commuter rail system, and perhaps a new “West Station” in the Cottage Farm/BU area would speed up the bump rate in this city. Kudos in advance to any candidate with the vision and the nerve to call for the revenue needed for capital investment in public transportation, despite the tight fiscal environment, in order to set the stage for future growth without gridlock.

A State Ideas Competition. Let’s challenge the conservative, risk-averse financial establishment by giving local entrepreneurs the choice between creating their innovations for a government market or a private-sector one. We could be the first state in the nation to put up money for entrepreneurs and researchers to compete regularly in front of a panel of state officials for the best solution to a Massachusetts problem. By using public dollars to goose the demand side, we’ll help to energize local funding, networking, and entrepreneurship while helping to bring market-driven private sector ingenuity to bear on public problems.

In the end, even if all that ends up coming out of this election year is lip service to innovation, maybe it will at least help to spread the word to more people in Greater Boston that our capacity to innovate is and has always been the fount from which all good things flow. More than any other US city, we depend on innovation to drive our periodic revivals.

Today, the nature of this reliance is even sharper: We live on the upstream idea- and product-development side of innovation, as we cannot count on competing with lower-cost areas for downstream production. Basically, we can no longer be sure of retaining the fruits of an innovation for long, so we must innovate constantly or face eventual extinction. But as any salmon will tell you, going back upstream to spawn again and again may not be easy, it’s better than the alternative.

Robert M. Krim is executive director of the Boston History & Innovation Collaborative. Full report is available at www.bostoninnovation.org.

A tale of two valleys

A tale of two valleys

Holyoke tries to grab some of the happy vibes from its college-town neighbors to the north

The first signs of life downtown are at Open Square,
a renovated mill complex.

The pioneer valley of western Massachusetts is not one valley but two. To those who think of it as Amherst or Northampton, it is a land of cafés, bookstores, and lively public spaces. Pedestrians swarm the sidewalks, bicyclists wait patiently at traffic lights, and inline skaters cross the rail trail bridge over the Connecticut River. Sometimes referred to as the “Happy Valley” for its starry-eyed idealism, the area takes its cultural identity and economic strength from the member schools of the Five College Consortium: Amherst, Hampshire, Mount Holyoke, and Smith colleges, plus the flagship campus of the University of Massachusetts. Together these schools educate about 33,000 students a year and provide employment for a good share of Hampshire County’s year-round residents. Many who have settled in the upper portion of the Pioneer Valley originally came as students and never left, charmed by its natural beauty, relative safety, and high-quality public schools.

Hampden County, along the river to the south, is another story. Anchored by Springfield and Holyoke, the Lower Valley has been losing its industrial base for generations, prompting many of the region’s most educated offspring to leave. Springfield may be the more visible struggling city—it is now operating under the supervision of a state-imposed Finance Control Board (“Under Control?” CW, Summer ’05)—but Holyoke is equally poor. Its median household income in 1999 (the last year for which Census figures are available) was $30,441, the seventh-lowest in Massachusetts and far below the state median income of $50,502. (Its standing has not likely changed since; the state’s Division of Unemployment Assistance pegged Holyoke’s average weekly wages at $634 during 2005, compared with a statewide figure of $963.) It also has one of the state’s highest rates of subsidized housing—27.9 percent when vouchers are taken into account, a figure that includes nearly half of the city’s rental units, according to the city’s community development office.

Northampton club owner and Holyoke
native Eric Suher says it’s not easy for the
city to go upscale.

In the predominantly rural western third of the state, Holyoke is also unique in its ethnic make-up. Some 36 percent of the population claims Puerto Rican ancestry, higher than in any other mainland US city. An additional 5 percent claim other Hispanic heritage, according to 2000 Census Bureau data, and 3 percent of residents are African-American.

Over time, Holyoke has become the beneficiary of a plethora of publicly funded health and human services, along with grants to combat its problems with gangs, teen pregnancy, and school dropouts. But local officials are now looking for ways to use public dollars to help the city do more than scrape by. Their goal is to salvage something that was left behind by the industrialists who helped develop the city more than 150 years ago: a canal system originally built to power paper and textile mills by harnessing energy from the Connecticut River.

Construction of the long-awaited CanalWalk—a revitalization effort in the works for more than a decade—is finally slated to go out to bid this fall. Many see the two-mile promenade as a catalyst that will transform Holyoke’s image and economy by bringing its largely abandoned downtown industrial area back to life. Roughly $5.6 million has already been secured in federal budget earmarks and state matching funds for the first phase of the project. It could take as long as a decade to complete all three phases, but the CanalWalk will eventually include a walkway, bike path, and benches, and it will link local attractions such as a children’s museum located within the Holyoke Heritage State Park and the former Wistariahurst Mansion, now a museum. Construction could begin next spring.

Holyoke could have an identity beyond crime, poverty and despair.

The first signs of life downtown can already be seen at Open Square, a renovated mill complex that’s now home to more than 50 businesses, including several high-tech firms. The building’s developer plans to create 80 artist’s lofts in the space, along with six to eight restaurants, numerous retail shops, a hotel, and a theater. Mill conversions have a good track record in the Pioneer Valley, where they’ve already played a role in transforming Northampton and Easthampton into destination spots for the arts-minded.

Indeed, that success could help push the college-town prosperity of the Upper Valley into the Lower. Rising real estate prices in those cities are now pushing homebuyers into Holyoke’s leafy Highlands neighborhood, on the city’s northern edge. And as momentum builds in the canal district, young people have begun casting an eye in that direction, too. Even the colleges themselves are discovering Holyoke, making use of Open Square space for meetings and studios.

It would be premature, to say the least, to call Holyoke a city on the mend. But it does raise the possibility, for the first time in decades, that Holyoke could have an identity beyond its current association with crime, poverty, and despair. Still, for local officials as well as hopeful developers, the question about downtown Holyoke remains: If you build it, will they come?

OTHER SIDE OF THE MOUNTAIN

Theatre director Priscilla Hellweg:
“There’s more that can happen.”

Not surprisingly, many of the area’s cultural and recreational offerings are concentrated in the Upper Valley. When Hampden County residents want to see an East African drum ensemble or enjoy an artfully prepared meal, they get on I-91 and drive north. The traffic rarely goes the other way.

It’s not that Springfield and Holyoke have nothing to offer their neighbors to the north. These cities have museums, performance halls, attractive parks, and ethnic restaurants and festivals. Yet rarely does one hear of plans to head into either city except, perhaps, for work.

“Sometimes the Holyoke Range seems like the Berlin Wall,” says Tim Brennan, executive director of the Pioneer Valley Planning Commission, referring to the mountain range that divides the region. “It’s not just a physical barrier, but also a psychological one.”

To see how that barrier might be coming down, look to the Hampshire County town of Easthampton, revitalized in large part because of the Eastworks mill conversion in 1997. Situated between Holyoke and Northampton, Easthampton was regarded, not so long ago, as an unremarkable working-class community. Now Eastworks, at the former site of the Stanley Home Products factory, is home to several dozen businesses and can’t develop its condo space fast enough for eager buyers. The town is now considered an ideal place for artists and young families who find it difficult to enter the housing market elsewhere in Hampshire County.

Still, Holyoke is not Easthampton. “Easthampton was pretty vacant and depressed,” says Bronwen Hodgkinson, a partner in a multimedia business at Holyoke’s Open Square, who grew up in Easthampton before that city’s renaissance. “But it was never perceived as dangerous.”

Holyoke is perceived that way, though efforts to combat that perception, and the underlying reality, are under way. Just before his inauguration in 2000, recalls Mayor Michael Sullivan, Holyoke was rocked by 12 murders over an 11-month period. And just two hours after he was sworn into office, two young men were shot dead in front of a 6-year-old witness. Sullivan quickly began focusing on aggressive intervention efforts for youth at all levels and launched what he calls a “peace initiative,” meeting monthly with leaders of faith-based organizations, law enforcement, schools, and community partnerships to discuss ways to address the needs of the city’s young people.

The next year, Anthony Scott took the helm at the police department. Police Chief Scott’s “take-back-the-streets” approach has made a show of wresting control of the city from Holyoke’s criminal element. In addition to conducting dramatic drug sweeps, officers under Scott have arrested or fined citizens for lesser offenses believed to erode the quality of life in urban centers: drinking in public, playing music too loudly, and leaving trash and abandoned vehicles on their property. Scott, who is African-American, made the national media two years ago when comedian Bill Cosby, a UMass– Amherst alumnus who owns a home 40 miles away in the town of Shelburne, called Scott personally to praise his efforts to restore a sense of order on Holyoke’s streets.

There are debates over whether Scott’s approach—which includes a quixotic one-man crusade against the Bay State’s lifetime-appointed judiciary, with Scott calling for judges to be confirmed by popular vote, based on their sentencing and bail-setting records, after they have served six years on the bench—is more showmanship than substance, but violent crime seems to have leveled off. In Scott’s first year, Holyoke had six murders, says Sullivan; last year, there were three. Scott reports that between 2001 and 2005, Holyoke saw a 17 percent decrease in major crimes (a category that includes homicide, rape, assault, burglary, and auto theft).

What’s more, says Sullivan, the crime that does take place in Holyoke poses little threat to visitors or law-abiding residents. “There is very little predatory crime down here, as opposed to gang- and drug-related crime,” says Sullivan. “The reality is, if you’re going to die of anything in Holyoke, it’s going to be of boredom.”

Hodgkinson is an ardent believer in Holyoke’s revival. After graduating from Mount Holyoke College, she lived in Northampton while she worked as a Web designer. Unable to buy a house there, she purchased a home in the Holyoke Highlands in 2002.

Mayor Michael Sullivan launched a
“peace initiative” to deal with violent crime.

“I have to admit, I was even resistant to look in Holyoke initially,” she says. “Those old vibes are hard to shake off.” She’s leaving the city now for a condo in Easthampton, but her business will remain at Open Square.

“Some people still think we’re crazy for being down here, that it’s a war zone downtown and they’d get shot if they came,” says Hodgkinson. “But it’s just deserted, is what it is. I’d be intimidated to walk around here at night, but I’ve never felt threatened working here.”

Sullivan says it’s the empty landscape of the downtown industrial area that breeds fear, but that fear is what keeps downtown empty. “More activity is what makes a place safer, but it’s a chicken-and-egg thing,” he says.

BEYOND THE POVERTY INDUSTRY

In the 1960s, Holyoke took the lead on a number of social welfare initiatives. It was one of the first cities in the nation to participate both in the school breakfast program and in Head Start, the federal anti-poverty program for children, according to Sullivan. He says that several years later, the Holyoke Health Center also began offering free health care to the uninsured. And as Sullivan sees it, the city has been in the business of providing services for the poor ever since.

‘If you are in another town struggling with a drug addiction…you would probably wind up in Holyoke.’

“If you look at Holyoke and Northampton in 1960, it’s like a mirror image,” says the mayor, adding that it wasn’t long before the two cities became more distinct. “Northampton didn’t offer these services. Holyoke did. So people who needed services gravitated to Holyoke.”

Indeed, over time, social services became the city’s main industry. Last year, the education and health care sectors accounted for 33 percent of the city’s jobs, compared with 24 percent in Massachusetts as a whole, according to state figures. Developed as a “planned industrial city”—the first investors built a dam and canals to direct power from the river to the paper and textile mills in 1849, and plotted out a street grid at right angles that are unusual for New England—Holyoke began losing its industrial base in earnest about 45 years ago, when its population stood at about 53,000. Urban renewal funds poured into the city, expanding the stock of low-income housing and bringing in a wide range of social services. Today, with a population of 40,000, Holyoke is home to many of the offices and programs of the state health and human services agencies that serve the broader region, including a number of drug intervention programs. Sullivan points out that his city has 96 units of housing for the homeless, but he says no more than 10 shelter residents became homeless while living in Holyoke.

“If you become homeless in Granby, you can’t stay in Granby’s homeless shelter, because they don’t have one,” he says. “You come to Holyoke. If you are in another town struggling with a drug addiction and things are spiraling downward in your life, you may need to find affordable housing and a rehab program, which means you would probably wind up in Holyoke.”

Recently, the mayor has heard grumblings from officials outside his city about “Holyoke’s guns and drugs” finding a way into their communities. “Let’s be clear,” says Sullivan. “These aren’t Holyoke’s guns and drugs. There are no poppy fields in Holyoke.”

Still, when serving the needy is what a city is known for, it’s hard to gear business and residential development to a more upscale demographic. “The city of Holyoke is in the business of being poor,” says Eric Suher, a Holyoke native who breathed life into a number of successful music venues in downtown Northampton—including the renowned Iron Horse Music Hall, the Pearl Street nightclub, and the Calvin Theatre. Suher also owns property along Holyoke’s canals. “You can’t just shut that business down to start a new one.”

But at the Open Square mill complex, architect and developer John Aubin is trying to get Holyoke into a range of new businesses. In doing so, Aubin is carrying on a family legacy of innovative development in the valley. In 1965, his father, William Aubin, was developer of the Echo Hill neighborhood in Amherst, a forward-looking mix of single-family homes, private townhouses, and shared recreational spaces, including ponds and a field. One of the first such “cluster” developments on the East Coast, Echo Hill was featured in Better Homes and Gardens in 1971.

William Aubin bought the former paper mill that now houses Open Square in 1969, 20 years before his death. It was that project that brought John Aubin back to the area in 1999, following 10 years as a practicing architect in New York City.

About 15 percent of the 700,000-square-foot space has been renovated so far. Open Square launched with six tenants in 2000 and now has more than 50, including several attorneys, a venture capital firm, and a deli/café. Aubin hopes eventually to have about 100,000 square feet of retail space, including several restaurants, a 75-room hotel, and a black box theater or movie theater. About 5 percent of the space will be developed as studios for professional artists. He also wants to develop 80 “live/work” spaces, 24 of which he hopes to have finished within the next five years.

These would be among the few market-rate residences downtown. The only other major residential development nearby is Lyman Place, a federally subsidized project with 167 units of low-income housing. But Aubin, who now lives in downtown Holyoke himself, says living in New York gave him a different sense of the possibilities for economically mixed urban neighborhoods.

“This region doesn’t know what a city is anymore,” says Aubin. “Our [target] market is made up of people from outside the area or people from the area who have lived in urban areas and come back. This is an area for people who like diversity. The college professionals are a good base, as are people who graduate from colleges in the area.”

‘A lot of the artists…are used to cities. They’re not scared.’

So are artists and craftspeople, says Suher, who hopes to develop his canal district property into rental units or condos. “It’s a lot of the artisans who are used to cities or mixed neighborhoods,” he says. “They’re not scared.”

But in Aubin’s calculations, jobs are as important as housing units. He thinks more graduates of the local colleges would stay in the Pioneer Valley if there were greater opportunities to work here, and he hopes that Open Square will serve to foster a community of entrepreneurs that will spawn new jobs.

“I don’t see Holyoke as depending on the regional economy,” says Aubin. “It’s in a natural position to be restored as a leader. In terms of size and density, Holyoke is one of the best-planned cities in the US. You’ve got a layering of density and a tremendous housing stock. We’ve targeted businesses with good growth potential and high wage potential and have created at least 50 jobs. Several of these businesses started from scratch.”

Open Square developer John Aubin:
“This is an area for people
who like diversity.”

Brennan, of the Pioneer Valley Planning Commission, says since small firms have become the backbone of the technology- and service-oriented New Economy, the creation of small businesses is a sign of vitality. And these days, he says, 85 percent of businesses in the valley have 20 employees or fewer, while 75 percent have 10 or fewer.

TASTE OF THE UPPER VALLEY

Aubin’s building is home to a renowned educational theater company and a classical ballet academy, not to mention numerous high-tech firms. Yet it seems the most talked about business is a café and deli called the Black Sheep, which opened late last year.

A landmark in Amherst Center since 1986, the Black Sheep offers freshly baked artisan breads along with gourmet food and coffee. The menu at its second location, at Open Square, includes a Holyoke-inspired sandwich called the “Highlander”—Black Forest ham, goat cheese, tomato, and red onion on sourdough.

It’s not that everyone in Holyoke has been pining for fairly traded Peruvian coffee. But having this sort of business in town has become, according to the mayor, a source of local pride.

“Right now you hear people who don’t have any idea of what the Black Sheep really is, saying, ‘Did you hear there’s a Black Sheep in Holyoke now?’” says Sullivan. “You can tell they don’t have any idea where the Black Sheep is, either, but they know enough to understand that it’s something cutting-edge here in Holyoke.”

Hodgkinson says she hears the same thing outside the city. “A lot of people from outside Holyoke say, ‘Wow, if the Black Sheep is taking a chance on Holyoke, then the city can’t be that bad,’” she says. “And that’s huge.”

Black Sheep owner Nick Seamon viewed his Holyoke expansion as a low-risk venture. He had a customer base among workers in the building, as well as Amherst customers who worked in Holyoke and needed someplace to eat lunch. He also knew that UMass–Amherst employees were buying houses in Holyoke because of the reasonable prices.

“I don’t look at Holyoke as a depressed area,” says Seamon. “It’s an underserved area. There are a lot of people there who have money to spend but can’t get what they want.”

Right now the Black Sheep is only open Monday through Friday from 7 a.m. to 5 p.m., but plans are under way for a monthly weekend brunch. “We were talking to people in Holyoke about it,” says Seamon, “and what they told us is that whenever they want to get brunch, they have to drive up to Amherst or Northampton to get it.”

Black Sheep’s Nick Seamon says
Holyoke isn’t depressed, it’s “underserved.”

Seamon thinks downtown Holyoke would benefit from a major national retailer like Ikea or Crate & Barrel, a place that would draw people from across the region. But he doesn’t buy the local image of Holyoke as a city perpetually in decline. After all, when he opened the original Black Sheep, he was told it would never take off in such a sleepy college town. But as more people began moving to the area from places like Seamon’s native New York City, the Black Sheep was one of the only places in Amherst where they could find what they were looking for.

“What happens in a town is that people can’t see beyond their own past,” he says. “They only see the negative. But the regional market is still underserved, Holyoke in particular. I’ll be the first on the block, and I can grow this if I want.”

ART SUPPLIES

For all its deficits, Holyoke also has assets. It’s situated at the intersection of the Massachusetts Turnpike and I-91, and surrounded by 15 colleges and universities.

“Institutions of higher education tend to be hotbeds of ideas and culture,” says Brennan, of the Pioneer Valley Planning Commission. “So having such a high number of them gives you the raw materials to make the creative economy a bigger component.”

Right now, Holyoke Community College has an art space at Open Square, and several nearby colleges hold daylong departmental meetings in the building. At one point, UMass was looking to move its art department there, according to Aubin, but that didn’t pan out.

Mount Holyoke College, in South Hadley, rents a studio for a professor in the building, and last year the college’s Water Works arts event had shuttle buses running between the college and Open Square. Several hundred students and professors from the Five Colleges attended and had a chance to see the site firsthand. In May 2005, the college’s communications office touted Mount Holyoke’s new “reach into Holyoke,” based on a search for “the kind of studio space the College does not have,” quoting art professor Joe Smith. Mount Holyoke officials looked for space in South Hadley but decided on Open Square. “It had the most rehabilitated space, it was clean, well-lit, and had a generosity of space we were looking for—30,000 square feet per floor,” according to Smith. “We also wanted a safe building protected by alarms and security guards.”

One of the first tenants to take a chance on Open Square was an educational theater company called Enchanted Circle, which works with schools and social service agencies. Executive director Priscilla Hellweg, a graduate of Hampshire College, joined the group a few years after it was founded as a nonprofit organization in Amherst, in the 1970s. The organization has maintained a student internship program with Hampshire College for 20 years and also works on projects with the sociology department at Smith. Two years ago, the group moved into Open Square.

“The five colleges have huge potential to bring people here, and there’s great crossover potential,” says Hellweg. “It is being tapped. But there’s more that can happen.”

Like others, Hellweg thinks events of all kinds, college-sponsored or otherwise, that bring outsiders to Holyoke will help people become more comfortable in the city. She recalls that after one performance opening, Enchanted Circle held a champagne reception that drew patrons from all over, including, she says, “people from Amherst and Northampton who said [they had] never been to this part of town before.” And when Mikhail Baryshnikov performed at the War Memorial Auditorium in Holyoke two years ago, she recalls, “There were people who came to that who hadn’t set foot in Holyoke in years.”

For all the cultivation of the arts and hopes for upscale development, Holyoke is in no danger of losing its identity as a tough, industrial city, even as it becomes post-industrial. Aubin, for one, plans to make the most of the commanding architecture of his former manufacturing buildings even as he develops them into something very different.

“There’s a certain modernism,” he says of the mills along the canals. “It’s actually one of the striking features, having these large geometrical features. It blends well with contemporary design. I’m trying to infuse modern design into the bones and the materials of the historical buildings.”

Walking the route that one day will be the CanalWalk, Mayor Sullivan points to an old steam pipeline that will remain visible even after the project is done because it would cost $1 million to bury it underground. Not everyone is happy about that, but it’s OK with Sullivan.

“You can’t hide the fact that this is an industrial area,” says Sullivan. “You can’t gentrify this place to the point that it will satisfy everyone’s sensibilities.”

From the rear of a decrepit building, Sullivan takes in the view of the canal district. “There is a grittiness, but it’s a kind of beauty,” says the mayor.

Melissa DaPonte Katz is a freelance writer in Amherst.

Statistically Significant

Statistically Significant

Illustrations by Travis Foster

the graying of the do-gooders

According to the Corporation for National and Community Service, volunteerism is on the decline in Massachusetts, while it’s flat in the nation as a whole. The CNCS survey indicated that 27.0 percent of Bay State residents over 16 did volunteer work in 2005, down from 28.2 percent the year before. Nationally, the percentage was the same for both years, 28.8 percent.

In terms of who does the volunteering in Massachusetts, a composite of categories with the highest rates would yield a 45-to-54-year-old white married woman. The most common activity is fundraising, and the most common affiliation is with an educational or youth-oriented organization. Nationally, the model volunteer is 35 to 44 years old; the most common category of activity is “coaching, refereeing, tutoring, teaching, or mentoring,” and the most common affiliation is with a religious organization.

In what might be a worrisome sign for the future, Massachusetts ranks 26th in the percentage of Baby Boomers (born between 1946 and 1964) who reported volunteer work between 2003 and 2005, but a poor 47th in the percentage of young adults (ages 16 to 24) who gave their time and effort. Only 19 percent of young adults in Massachusetts were volunteers, compared with 24 percent nationally. Other than Baby Boomers, the only people more likely to volunteer in Massachusetts than they were nationally were African-Americans—23 percent vs. 22 percent.

barney frank, right-winger

In July New American magazine, an offshoot of the staunchly conservative John Birch Society, awarded three Bay State congressmen—Barney Frank, Ed Markey, and Martin Meehan—a surprisingly respectable 50 percent rating based on 10 congressional votes over the past year. That’s better than 183 of the 230 Republicans who were rated on the same criteria. The three Massachusetts reps, who are generally considered among the most liberal in the House, were given points for voting against re-authorization of the Patriot Act; supporting a measure to block a United Arab Emirates company from managing American seaports; and voting against appropriations measures that included agricultural subsidies and funding for the Iraqi war.

On the Senate side, the Bay State’s John Kerry voted with the Birchers on four out of 10 issues, including the setting of a timetable to withdraw from Iraq. Among the senators receiving zeroes were Maine Republicans Olympia Snowe and Susan Collins, who dutifully voted for several spending measures advanced by President Bush but opposed by those who prefer a minimalist government.

back to an empty ballot

As it did four years ago, South Carolina is saving Massachusetts from the dubious distinction of having the least competitive roster of legislative races in the nation. Only 26 percent of the seats in the 160-member Massachusetts House of Representatives are being contested by both the Democratic and Republican parties this year. That’s down from the relatively respectable 51 percent two years ago, when Gov. Mitt Romney helped put together a large roster of Republican candidates, and even worse than the 31 percent showing in 2002, which was the last time the Bay State ranked next to the bottom among the 44 states in which the entire lower legislative body is up for election in even-numbered years.

the history of the world unabridged

Thanks in part to its coverage of Islam and the Middle East, Massachusetts was one of eight states to receive an “A” for its K-12 world history curriculum from the Washington, DC–based Thomas B. Fordham Institute this summer. “Standards drafted before 9/11 often assume there is no history to speak of after the fall of Rome and before the Middle Ages,” the report said of other states—or, to put it in pop culture terms, after Monty Python’s Life of Brian and before Monty Python and the Holy Grail.

The Bay State’s weakest score (eight points out of possible 10) came in the “Mexico and Western Hemisphere” category, but even here we did better than any other Northeastern state.

some diplomas weigh less in the bay state

The default rate on student loans among graduates of Bay State colleges (2.9 percent) is lower than in any state except Wisconsin, according to US Department of Education data released this summer, but it’s not because students don’t leave school with a tab. According to the Project on Student Debt, a nonprofit organization based in Berkeley, Calif., in 2005 Massachusetts ranked 21st in debt load for all graduates of four-year colleges, at $18,169. Graduates of private colleges here ranked slightly lower in debt burden compared with their national peers—at 28th, with $19,953 in loans—but since a far greater share of students attend private schools in Massachusetts than in the rest of the nation, our overall debt ranking was several notches higher.

What would really lighten the loan load here would be if more students attended public institutions of higher education. The Project on Student Debt ranks Massachusetts 46th in the nation for average debt of a graduate from a public four-year school, at $14,326. By contrast, Iowa produces the most-burdened public-college graduates, with an average debt of $23,198, even though, according to the College Board’s Annual Survey of Colleges, average tuition and fees for public colleges in 2005-06 were almost the same in both states—$5,660 in Massachusetts and $5,620 in Iowa, both a bit above the national average of $5,491. But with household incomes significantly higher in the Bay State, it may be that public college students here are less dependent on loans to cover the same costs.

but mortgages weigh more in springfield

Refinancing a home mortgage is much more likely to be a bad deal in western Massachusetts than in the Boston area, according to a September report from the Consumer Federation of America. The CFA examined the “subprime” segment of the refinancing market—referring to loans that have high interest rates and are generally given to borrowers with less-than-ideal credit ratings. Many of these loans are used to pay off credit cards and other consumer debts, with the house serving as collateral.

In Massachusetts as a whole, subprime loans represented 24.3 percent of the total refinancing market in 2005, below the national average of 26.5 percent. But while Boston and Cape Cod had among the lowest shares of subprime loans among the 317 metropolitan areas in the report, the higher-interest loans accounted for 41 percent of the market in Springfield. That metro area ranked 61st nationwide, falling between Huntington, W. Va., and Dalton, Ga.

New neighbors

New neighbors

Cape cod apparently saw a lot of moving vans last year, but the South Coast was unusually quiet in home-buying activity. The larger map below shows the number of single-family homes and condos (both new and pre-owned) sold for every 10,000 current residents in each town. Provincetown (population: 3,400), was the clear leader in the infusion of new property owners, with 216 condos and 29 homes sold. That’s more than 10 times the number of sales in Sunderland, which has a slightly larger current population. Outside of western Massachusetts, which is presumably too far to attract many commuters to Boston, the Fall River and New Bedford areas stand out a lack of activity in the residential market.

Boston itself was not too far behind the state average, with 148 sales for every 10,000 residents. But sales of condos greatly outpaced single-family homes (6,766 to 1,511), and in two neighborhoods (East Boston and South Boston), the average condo was just about as expensive as the average house. The smaller map shows where condos make up a large part of the residential real-estate market; besides the immediate Boston area, condos appear to be growing in popularity along the New Hampshire border and just west of I-495.

Home sales per 10,000 residents in 2005 (State average: 166).

Condo sales as percent of home sales, 2005.

Source: The Warren Group (www.thewarrengroup.com). Only single-family homes an dcondos are included in sales data.

Letters

I really enjoyed Dave Denison’s “Tax Talk” (CW, Summer ’06). Just a few response items.

Point 1: Dave asks if 10 percent of income is “too much for a middle-class family to pay in order to have decent public schools, police and fire protection, roads and sewers, and state services provided for the health and care of indigent children and elderly persons, the mentally ill, the disabled, and others who need assistance.” The answer, even to a tax cut activist, is no, it’s not too much, if in fact we can all feel confident that this is what our 10 percent is accomplishing.

Here’s the problem: Many of us think that the public school system, with only limited competition from the besieged charter schools, is not getting the job done. Police and fire protection is, or should be, the number one priority of government; yet we read of neighborhoods terrorized by gangs and young thugs, a failure not of our police, but administrative priorities, not to mention the poor social structures that government has encouraged. Even in the suburbs, many taxpayers fear that, should they become victims of a crime, the justice system will fail them, that the police may catch the criminal but the courts will set him free. Roads? Those of us who drive in other states know they can be much better maintained, but of course that maintenance money went into the Big Digaster. If state services for the needy are provided for our 10 percent, why are we always hearing advocates complaining about how inadequate they are, and how selfish the taxpayers who “don’t care”? Hey, if 10 percent isn’t enough, I’d rather pay less to the government and carefully choose my charities.

Point 2: Citizens for Limited Taxation led the fight against the graduated income tax five times, so we can respond to Dave’s query as to why it loses on the ballot every time. Middle-class voters know that they are “where the money is,” and politicians who put the grad tax on the ballot want the money. So if the rates can vary, these politicians will pick us off, one bracket at a time, incrementally raising all rates on everyone. Our only chance is to be united in opposition to any income tax rate increase, as we are now.

Point 3: Yes, the Massachusetts total tax burden, relative to personal income, is not high; but this matters only to those fortunate high-income individuals who drive the statistics up (as they drive up the cost of housing). The rest of us don’t find this relevant. Our total tax burden, per capita, is one of the highest in the nation. Why does it take so much more, relative to the number of people, to run a government here? The answer to that is another point to add to Point 1: We know, from reading the newspapers, that a lot of our taxes are being siphoned off for the benefit of the pols and “the system,” instead of being carefully spent on essential services.

Barbara Anderson
Executive director
Citizens for Limited Taxation
Marblehead

THE REAL TAX STORY IS HIGHER BURDEN ON POOR

Tax Talk” is one of the better articles I have seen on Massachusetts tax policy. Yet, I feel it still misses the mark. The article states: “Maybe the truth that matters most to a middle-class voter in a town like Lunenburg has little to do with what politicians end up arguing about every four years.” I think the real truth that matters most is an issue that the article alludes to. While politicians argue over whether the personal income tax rate should be 5.3 percent or 5.0 percent, the numbers that really matter reflect the impact of all state and local taxes. I refer to the Institute on Taxation and Economic Policy analysis author Dave Denison mentions, which indicates that low-income earners pay a much higher effective tax rate than high-income earners. Even there, I wonder why an author who clearly understands the importance of considering both federal and state/local taxes uses the ITEP numbers without consideration of the federal tax offset, which allows taxpayers to deduct state income and property taxes—a feature that greatly favors taxpayers in the high-income brackets. Those numbers are even more damning for a state with such a reputation for liberalism. The lowest 20 percent pay an effective tax rate a little over twice as high as the top 1 percent of earners!

That is the real truth about Massachusetts taxes—a very regressive system that acts as a system of transfer payments from the poor to the rich. I refer to it as the Reverse Robin Hood Paradox. Not only is it unfair, but my research indicates that exacerbating already severe inequality may impair the growth that is offered as a major component of the state’s economic development policies.

How do we explain why this issue gets virtually no attention? I look for CommonWealth to shed some light on it.

John Edward
Professor of Economics (adjunct)
Bentley College
Waltham

TRAINING WAGE WOULD HELP TEENS GET JOBS

The Michael Jonas article “Labor Pains” highlights an important issue facing Massachusetts teenagers. While the article attributes a decline in employment opportunities for male teenagers to the increase in our immigrant population, it left out the most important factor in this troubling situation—the rapid escalation in the minimum wage. Indeed, once the most recent increase is implemented, Massachusetts will have seen a near doubling of the state minimum wage since the mid ’90s, and will have one of the highest required wage rates in the nation.

As it becomes more expensive to pay employees, employers will be left with no choice but to reduce hours, lay off employees or minimize the number of new positions. Therefore, the opportunity for youth to obtain valuable job experience decreases. At $8 per hour, employers are less likely to extend job opportunities to teenagers. Instead, they are limited as to the number of people they employ and hire more productive workers who have more experience and are likely to stay on the job longer than two months in the summer. This leaves many kids on the streets. This is troubling, in light of a city and statewide movement to place underprivileged and at-risk youth in jobs for the summer.

These teenagers are losing jobs to an older, more experienced immigrant population. The lack of early work experience for teenage boys robs them of important work training and opportunities to earn money for higher education. It will also harm them when they apply for future jobs with little to no work experience.

In addition to our high, and now rising, minimum wage, Massachusetts is one of only two states in the country that require most stores to pay hourly workers time-and-one-half pay on Sundays. Retailers are less likely to pay inexperienced 14-to-17-year-olds a starting wage of $12 for Sundays.

It is time for our elected officials and employers to work together to fix this problem and to help save our youths. A training wage for teenagers will be an incentive for employers to hire young, inexperienced workers, thereby getting kids off of the streets, giving them valuable training, income, and a better future.

Jon Hurst
President
Retailers Association of Massachusetts
Boston

PEOPLE, NOT RESTRICTIVE PLANNING, SOLVE CRIME

With community leaders struggling in good faith to understand and respond to Boston’s increased violence, I was saddened by the attack by Richard Andrew Gardiner (“Crime can be curbed through smart design,” Correspondence, Spring ’06) on Michael Jonas’s article, “Crime and Puzzlement” (Winter ’06). Gardiner assails reporters, presumably including Jonas, for their “shallowness” and their assumption that “they have the knowledge to judge one crime reduction strategy over another.” Ironically, Jonas did not offer judgments in his informative survey of the opinions of numerous leaders. The person acting judgmental is Gardiner.

As disturbing as his misplaced vituperation against reporters is Gardiner’s vision of “crime prevention through urban planning.” Designing street patterns to prevent students who live in certain neighborhoods from passing through certain other neighborhoods smacks of gated communities without the gates. There’s already a trend of increasing racial segregation in Metro Boston, and although Gardiner doesn’t specify which kinds of students and which kinds of neighborhoods, this type of plan ought to be a red flag to people who care about equity, race relations, and welcoming communities.

Gardiner dismisses programs that are “dependent upon individual or group enthusiasm” because they dissolve when key people get burned out or move on. People do move on, of course, but a valid crime prevention strategy must include involvement by caring adults to guide at-risk youth onto a positive path. Contrary to Gardiner’s bleak assessment, there are new people with energy and dedication willing to step up at times of need. We are seeing it now in Boston.

There are many components to addressing the crime surge. Good urban planning of the physical environment certainly has a role to play but not when it seeks to discriminate against certain classes of students or to trivialize the worth of human intervention by concerned community members.

Jeffrey R. Stone
Co-chair
City-Wide Dialogues on Boston’s Ethnic and Racial Diversity
Roxbury

Treatment discontinued

Treatment discontinued

Town and state officials agreed on what to do with Medfield State Hospital, but then time ran out

medfield When it opened in 1897, the Medfield Insane Asylum represented the latest thinking in psychiatric care. Huge institutional buildings had been the norm for state psychiatric hospitals, but the Medfield asylum looked more like a prep school than a prison; the three-story brick buildings, on several hundred acres of farmland and forest bordering the Charles River, created an environment that was thought to aid in recovery. However, just over a century later, Medfield State Hospital (as it was renamed in 1914) became a casualty of another shift in psychiatric care, this time toward housing the mentally ill not in institutions but in the community. The state shut down Medfield State in 2003, and many of the buildings in the hospital’s quadrangle are now marked with large signs bearing a white X, a warning to firefighters that the floors are not sturdy enough to be walked on. Despite their condition, the buildings occupy a very valuable piece of real estate, one the state would like to sell.

A dozen state psychiatric hospitals in Massachusetts have closed in the past 30 years, and the process of recycling the properties for new uses has become notorious. Construction of a mixed-use development at the former Foxborough State Hospital, which closed in 1976, got under way just last year, while the Boston State Hospital site took more than two decades to begin redevelopment.

Medfield State was supposed to be different. After just four years of mostly amicable negotiation—a comparative blink of an eye—town and state officials agreed last fall on a plan for housing development on the site. “We were going to be the poster child for good behavior,” says Ann Thompson, a Medfield selectman.

Now Medfield State is looking more like another face in the crowd. The state Legislature didn’t approve the sale of the land, as required by law—because it didn’t get a chance to. The bill never made it to the floor by the end of the formal sessions—and only at a formal session can the necessary roll-call vote take place—on July 31, and even if the Legislature reconvenes for a special formal session this fall to pass an urgent bond bill, no one expects the Medfield bill to make it onto the agenda. This lack of action—the result of the politics of development getting entangled in the politics of mental health care—has resulted in a setback that some say could keep the property in limbo for years.

the town of Medfield had been expecting the state hospital to close since at least the 1980s. The Department of Mental Health (DMH) began to shutter the first of the state hospitals in the late 1970s, and Medfield State, which held more than 2,000 patients at its peak, began to shed patients at around the same time, boarding up buildings as they were vacated. The hospital also began to turn over hundreds of acres of land in large parcels, to the state, where it ultimately ended up in possession of the Department of Conservation and Recreation (DCR); to the town; and to other entities. By the time discussions between the town and the state on the future of the remaining 200-plus acres began in 2002, several months before the hospital closed, the town’s Hospital Re-Use Committee had been meeting intermittently for more than a decade.

Medfield town boards and the reuse committee considered numerous options for the site—most notably a golf course, which town meeting endorsed in the fall of 2003—but town and state officials soon settled on a housing development. The Division of Capital Asset Management (DCAM), the state’s real estate and construction agency, was the town’s main negotiating partner during this process, but hardly the only one at the table: DMH, the DCR, the Massachusetts Historical Commission (charged with protecting the historic hospital buildings), and the Department of Agricultural Resources (required by state law to ensure that development doesn’t result in a net loss of agricultural land) were just some of the other state agencies with a say in the property.

Negotiations surrounding the housing development touched on everything from water rights to the amount of open space, but the central issue was the number of housing units. DCAM called for development dense enough to pay for the expensive restoration of the historic hospital buildings, nearly 50 of which are listed on both the state and national Registers of Historic Places. According to the agency’s estimates, the $22 million price tag for renovating the protected buildings (and demolishing others beyond saving), many of which are filled with asbestos and lead paint, would exceed the projected value of the completed development by about $5.5 million. Only the tax credits associated with restoring the buildings would pull the project into the black. DCAM, therefore, wanted as many as 400 housing units in the reuse plan, to pump up the bottom line for developers and facilitate the marketing of the property.

Medfield officials wanted fewer units, at first no more than 300. Town officials were concerned that a large development would strain town services, especially the school system, which is one of the most desirable in the state. (And one of the most heavily utilized: 57 percent of Medfield’s households have children in them, tied for the highest rate in the state.) “It’s an unfortunate reality of Massachusetts at the moment that the state educational funding system has made children the enemies of development,” says Selectman Osler Peterson.

By late 2004, the state and the town had tentatively settled on a compromise of 340 units, when the town, in a reversal, asked for an increase of 100 units. Although the proposed 440-unit development would have increased the town’s housing stock by nearly 10 percent, the more than 250 affordable housing units included in the plan would also have carried Medfield over the 10 percent threshold that would protect the town from unwanted housing developments imposed under the state’s Chapter 40B anti-“snob zoning” law—a “major incentive,” according to Peterson, and a benefit of redeveloping state hospital sites that other towns, such as Danvers and Lexington, have also taken advantage of. It was a calculated trade-off: The added units would place a greater burden on town services, but would also give Medfield more control over future development.

Last fall, Medfield and DCAM finally agreed on a reuse plan with 80 acres of open space and the town’s desired mix of 440 units, including single-family homes, condos for people aged 55 and up, and apartments spread out over the hospital’s 80-acre core campus in both new and renovated buildings. (Though nearly 60 percent of the units were to be affordable, under the 40B definition of 80 percent of median income, the package was also designed to minimize the number of schoolchildren.) The proceeds of the land sale, estimated at around $3.5 million, would have gone to DMH for off-site housing for the mentally ill.

“We felt we had a pretty good package worked out,” says Michael Sullivan, Medfield’s town administrator. “The Department of Mental Health was going to get the money for housing, we were going to get affordable housing units, DCAM was going to be able to market the land.”

And so, in late March, Lida Harkins, a Democratic state representative from Medfield and the House majority whip, filed the required legislation for the land sale. “We really thought we had all come to an agreement,” says Harkins, referring to Medfield’s legislators, town officials, and all the state agencies involved. “Then we got word a few weeks before the session ended that the [mental-health] advocates weren’t satisfied with the amount of housing.”

The Massachusetts Association for Mental Health (MAMH) was alarmed by the vagueness in the Medfield legislation regarding the location of housing for the mentally ill, and wanted 10 percent of the units on the former hospital site set aside for clients of the Department of Mental Health—a ratio the department received in the development of the Metropolitan State Hospital site, which lies in parts of Lexington, Waltham, and Belmont. In mid-June, MAMH brought its concerns to state Rep. Angelo Scaccia, a longtime ally of mental-health advocacy groups, who relayed them to Harkins. Meanwhile, the Massachusetts chapter of the National Alliance on Mental Illness (NAMI), which represents family members of the mentally ill, communicated its own disapproval of the legislation to DCAM; that group was less concerned about the location of the housing but objected to the lack of explicit language regarding housing subsidies in the bill. Eventually, after meeting with the advocates, DCAM, and Harkins in June, DMH, at a meeting of the Medfield board of selectmen in July, requested that 44 housing units for the mentally ill be incorporated into the reuse plan.

both the timing and the nature of the request angered Medfield officials. “The DMH is going to blow this deal up,” Selectman Paul Rhuda told the Medfield Press at the time. “[It] has lied to us from day one.” Although Lester Blumberg, DMH general counsel, says that “it has never been the department’s position that there wouldn’t be a housing presence on the campus,” the other stakeholders maintain that the department’s commissioners have stated for years that the hospital site was poorly suited for housing the mentally ill because of the remote location and the lack of public transportation (or even sidewalks).

Some town officials suspected that the DMH and the advocacy groups were using the impending deadline to wring out a last-minute concession. More to the point, most Medfield officials did not welcome the idea of DMH housing on the site. They were concerned that the department would not provide adequate support services for its clients, and that the town would be left to deal with (and pay for) any problems that may arise as a result.

“We had heard from several different sources that this has been a problem,” says Sullivan, “that the Department of Mental Health will put clients in private housing, and then, when there’s a need for support services, will say, ‘They cut our budget, we don’t have the funding.’”

Blumberg dismisses this accusation outright. “The Department of Mental Health provides supporting services to our community clients, wherever they live,” he says. “That’s our job. That’s what we do.”

Despite the town’s misgivings, town officials, DCAM, DMH, and the advocacy groups, in what Sullivan describes as a series of “rapid-fire negotiations” at the State House and in Medfield, agreed on a new compromise: 24 units for the mentally ill would be added to the hospital site, and the developer would be required to provide 20 additional units off-site. DMH also agreed to put in writing—though not in the legislation—a protocol for addressing any unforeseen problems posed by its clients living on the hospital site.

But the legislation never made it to the floor. Scaccia did not allow the bill to leave the House Rules Committee, which he chairs, and he has not explained why. (He did not return CommonWealth’s calls for comment. Nor, as of late August, had he returned calls from DCAM, according to Mary Beth Clancy, a senior project manager at the agency, or from his House colleague Lida Harkins, according to one of her aides.) The only person Scaccia did give an explanation to, apparently, was Timothy O’Leary, a deputy director at MAMH. On the Friday before the legislative session ended, as O’Leary tells it, Scaccia called O’Leary’s office and said that he believed he could “get a better deal with a new administration.” O’Leary stresses that MAMH supported the last-minute compromise. Of all the stakeholders that took part in those rapid-fire negotiations this summer, it appears now that only NAMI was dissatisfied with the compromise legislation. “There was not a consensus here,” says Tobias Fisher, NAMI Massachusetts’s executive director, who points out that it was a late-file bill, meaning Scaccia was entitled to hold it in committee. “Not enough time and effort was spent trying to work out the details of this complex legislation.”

Other stakeholders, however, were frustrated precisely because a hard-won compromise had been squandered. “A lot of hours and a lot of meetings went into hammering out that agreement,” says Harkins, “and it’s frustrating that it was derailed at the last minute because people weren’t communicating with each other.” Peter Norstrand, DCAM’s deputy commissioner for real estate, notes that DCAM representatives have visited Medfield more than 50 times for public meetings over the past four years.

“At Metropolitan State, Boston State, Foxborough, Danvers, the hardest thing was to get agreement on what the development would look like,” says Norstrand, “and that’s why we thought we were so far ahead of the game in Medfield, because we did reach agreement with the town relatively early on.”

Though they tend to express it diplomatically, Medfield officials are angriest of all. “It’s appalling that one man has the power to stop democracy, which is pretty much what happened,” says Thompson. “The people who know how hard we’ve worked on this are pretty angry that the town has been treated in this manner.”

Not everyone in Medfield was dismayed to see the legislation die in committee, however. “It was beneficial to the community not to have the bill come out,” says John Harney, a reuse committee member who’s been involved in town politics for more than four decades. Harney says that town officials conceded too much by agreeing to the DMH housing. (Sullivan, the town administrator, acknowledges as much, saying, “We basically sort of caved.”)

“Perhaps with a new administration and a refiled bill, we’ll have a better chance to do right by the mental health clients, and by the town,” says Harney. That’s everyone’s hope, but the delay has made the future of the redevelopment process far more difficult to predict.

had the legislature approved the Medfield State bill, that would still have been just the beginning of the process of marketing and redeveloping the state hospital site. Before a developer could act on the reuse plan, Medfield town meeting would have to rezone the land from business to residential, which requires a two-thirds vote. While town officials and reuse committee members consider the 440-unit reuse plan the best deal Medfield is likely to get, it’s not clear that town meeting members would have seen it that way—even without the DMH housing thrown in. And with the DMH housing?

“You wouldn’t get a majority on this,” scoffs Harney. “It would be laughable. I have spoken to no one who is in favor of this.”

To complicate things further, town meeting, contrary to DCAM’s initial request, won’t vote on the zoning until after the legislation is passed—and DCAM has made it clear that it will not market the land until after town meeting changes the zoning, which raises the possibility of an impasse.

Scaccia did not allow the bill to leave the committee.

If the legislation is refiled and approved, and town meeting subsequently rejects the zoning (and in effect, the reuse plan), it is unclear what the next step would be. DCAM representatives are confident that the agency would be able to work with the board of selectmen to revise the reuse plan until it is acceptable to town meeting. Should that approach fail, however, DCAM could petition the Legislature for the authorization to sell the land on its own terms, which could include anything from a commercial development to a Chapter 40B housing development overriding the town’s zoning. In addition, the legislation Harkins filed in March does not mention town meeting or zoning, and would seem to leave open the possibility that DCAM could go ahead with the existing reuse plan even without the zoning change, with the idea that the developer who purchases the land could proceed under Chapter 40B. (Neither DCAM nor the town could confirm that this is an option, however.)

Town officials and reuse committee members speak highly of DCAM, using terms like “marvelous” and “a pleasure” typically not employed to describe dealings with state agencies, but the partnership has always been a practical one. Between July of 2003 and July of 2005, when it expired, a law was on the books that allowed DCAM to “fast-track” land sales by auctioning surplus state property without the approval of the Legislature, which in Medfield’s case could have led to a 40B scenario of up to 1,500 units, according to one town estimate.

“The people we’ve dealt with from the state were always very professional, very positive, very pleasant,” says Frank Garrison, co-chairman of the reuse committee, “but you never forgot for a moment that they could drop a hammer on you. It was a shotgun wedding: You can pick the cake, and you can pick the band, but put up with it—or it ain’t gonna be pretty.”

That the town and DCAM continued to collaborate on the reuse plan after the fast-track legislation expired is an indication of the good faith on both sides, but it seems that the events of June and July may have damaged the relationship between the town and the state as a whole.

“The scuttlebutt I get from people around town now is, ‘To hell with the state. If this is the way they want to do it, the place can rot,’” says Rhuda, the most outspoken of Medfield’s three selectmen. “Everyone says we’ll refile the legislation at the beginning of the year, but I have a strange feeling that the townspeople are going to say, ‘Nope. We’re not interested anymore. We’re not going back to the negotiating table.’”

With the worst-case scenario in mind, Garrison has even suggested (though only speculatively) that the town dig itself in, by setting aside $500,000 or $1 million in a legal fund at town meeting this fall, money which he suggests could be used to fight the state or a developer—or to hire a lobbyist. The idea, which Garrison has shared with Harney, makes “eminent good sense,” says Harney. “This could be tied up for a long, long time.” (If the situation devolves into a standoff, incidentally, it could ultimately prove profitable for the state: Medfield officials predict that many of the hospital buildings won’t make it through another two winters, and if they deteriorate to a point where DCAM and the state historical commission determine they can’t be salvaged, the reuse plan would likely generate higher bids from developers. By the same token, any savings on restoration might allow for more leeway in density and other aspects of the reuse plan, which could benefit the town as well.)

Despite the grumblings in Medfield, Norstrand, the DCAM deputy commissioner, prefers to think positively. “I don’t subscribe to the pessimist approach,” he says. “I have on my bulletin board a quote from Capt. William Clark, when he was on the Missouri River in 1805: ‘I have always held it little short of criminality to anticipate evil.’ I don’t anticipate that we wouldn’t get the [town meeting] approval. If the leadership of the town is on board, and the program is sound and sensible, then I think the right thing will happen.” But even Norstrand acknowledges the impact that a new administration in the State House and the attendant shake-ups could have on the project.

The uncertainty that Medfield had hoped to avoid by signing on to a reuse plan now looms larger than ever. “We don’t know what the future will hold,” says Sullivan, the town administrator. “We may be back to ground zero—another three years of negotiating with a new administration that may have different opinions.” The legislation may be refiled for the new legislative session that begins in January, or it may not. In any event, the town’s first step will be to consult its legislative delegation. The last-minute maneuvering at the state level and the bill’s demise in committee, Sullivan suggests, has left Medfield officials feeling like bystanders.

“Unfortunately, I think this is an issue that is outside the scope of the town’s expertise at this point,” says Sullivan. “This has obviously become a political issue. We may understand local politics, but we don’t begin to pretend to understand state politics.”

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New states for newcomers

New states for newcomers

Massachusetts has long been losing native-born citizens to New Hampshire. Are we about to start losing immigrants to our northern neighbor too?

To be sure, the immigrant population in the Bay State has grown briskly since 2000, based on recent estimates by the US Census Bureau. We’ve moved up to ninth place in the percentage of population who are foreign-born, passing Illinois, and our 15.3 percent increase in this category exceeds the national average of 14.7 percent. The Bay State’s foreign-born population is now reported at 891,000—surely an undercount, since the annual estimates do not take into account “group quarters” such as college dorms and nursing homes. (They will be counted in the 2010 Census.)

But the biggest percentage increases over the past five years have come in smaller, mostly Southern states not known as “gateway” destinations for immigrants. South Carolina saw the biggest jump (47 percent, from 116,000 to 170,000 foreign-born residents), and the immigrant population in New Hampshire rose by 34 percent, from 54,000 to 72,000. Several of the Bay State’s competitors for high-tech industry also experienced strong increases. For example, in Colorado, which has the best-educated workforce outside of Massachusetts, the foreign-born population rose by 24 percent.

Meanwhile, the two states with the biggest immigrant populations saw little change during the first half of this decade, with foreign-born residents growing by less than 10 percent. Immigrants have not stopped arriving in California and New York, but an increasing share of them seem to prefer less crowded states—as is the case with many native-born Americans.

New media guru Dan Gillmor wants to reinvent traditional journalism

New media guru Dan Gillmor wants to reinvent traditional journalism

bloggers in one corner, journalists in the other. Or is it bloggers versus journalists?

Perhaps this is a false dichotomy, or an outdated one. After all, it was nearly two years ago that New York University journalism professor Jay Rosen wrote an essay for his influential blog, PressThink, called “Bloggers vs. Journalists Is Over.” Yet, judging by the hostility it still generates, this argument may just be getting revved up.

Within media circles, for instance, one of the most talked-about essays of the summer was a long, somewhat jaundiced take on blogworld written for The New Yorker by Nicholas Lemann, dean of Columbia University’s Graduate School of Journalism. Although Lemann, a veteran journalist and author, was reasonably nuanced in his argument (the title, “Amateur Hour,” was as provocative as anything he actually wrote), he immediately came under attack from what might be called the blog triumphalists. And every day, blogs on both the right (Little Green Footballs, Power Line) and the left (the Daily Kos, Eschaton) are brimming with snide contempt for what they invariably describe as the “MSM”—dismissive shorthand for the mainstream media.

Then there’s Dan Gillmor. An unassuming 55-year-old former technology columnist and professional musician, he is the unlikely revolutionary behind what may prove to be the reinvention of journalism. As the founder of the Center for Citizen Media, a fledgling think tank affiliated with Harvard Law School’s Berkman Center for Internet & Society, Gillmor occupies the middle ground between the MSM and the blog triumphalists. His goal: to help the nascent citizen-journalism movement raise its standards and boost its influence, while also helping mainstream media organizations use technology to reach out to what he likes to call the “former audience.”

“Contrary to some folks in this area, I’m a big fan of traditional media,” Gillmor says. “I want to help them work in ways that they’ve never done before. I want to work with people doing citizen media independently, and in places where that intersects with journalism, I hope I can help.”

According to Berkman’s executive director, Harvard Law professor John Palfrey, it’s Gillmor’s balanced view that appeals to those who hope to define the journalism of the future. Calling Gillmor someone who “engenders respect on both sides of the discussion,” Palfrey says, “I’m not by any means of the mind that journalism or newspapers or any of that stuff is going away. But obviously the business is going to change hugely.”

He’s reaching out to the ‘former audience’ for the news.

Gillmor’s 2004 book, We the Media: Grassroots Journalism by the People, for the People, helped make the phrase “citizen journalism” part of the new media lexicon. And never mind that no one quite knows how to define something so amorphous that it encompasses everything from nationally oriented political Web sites to local efforts devoted to the goings-on of a particular community.

His vision, simply put, is that the “former audience” knows more than professional journalists, and that technology, properly applied, can enable citizens both to engage with journalists in ways that improve journalism and also to be journalists themselves. At a moment when the mainstream media are being challenged by shrinking numbers of customers and plummeting advertising revenues, Gillmor holds out the hope that journalism’s role in a democratic, self-governing society can be preserved, even revitalized.

BRIDGING THE JOURNALISTIC DIVIDE

Nearly two years ago Gillmor left a secure job at the San Jose Mercury News in order to strike out on his own. That led, about a year later, to the Center for Citizen Media, which is based mainly at the University of California–Berkeley’s Graduate School of Journalism, near his home in Palo Alto. The Berkman tie brings Gillmor east several days each month—enough, John Palfrey hopes, to give Massachusetts a role in a citizen-journalism movement that has until now been largely a West Coast phenomenon.

“We have too few Dan Gillmors around here, and we need some pied pipers,” Palfrey says. “Very self-consciously, we’ve tried to pull Dan to the East Coast and to Boston.” Indeed, an all-day conference held at Harvard Law in August—dubbed an “unconference” by Gillmor, reflecting his hope that the audience would be the star—drew about 100 bloggers, academics, and media activists, many of them from Greater Boston. All of a sudden, the Commonwealth is on the citizen-media map.

Lisa Williams, the founder and editor of H2otown, a nationally recognized citizen-journalism blog that covers Watertown (“Watertown’s Net Gain,” CW, Winter ’06), is among those who have signed up to work on projects with Gillmor. “He’s kind of the brand for citizen journalism because of the book he wrote,” Williams says. “If you asked anyone about citizen journalism, what’s the one name you associate with it, it would be him.”

To be sure, some of Gillmor’s tenets would seem to strain at the boundaries—well, if not of plausibility, then surely of practicality. For instance, there is his view that the audience knows more than professional journalists do. It’s something Gillmor believes so passionately that he posted parts of the manuscript for We the Media online for suggestions, comments, and corrections.

Now, of course, there’s nothing wrong with that. But how would that work in the rush and competition of daily journalism? Yes, there are people within the audience—“former” or otherwise—who are experts. But isn’t it the journalist’s job to seek out those experts, interview them, and sort out for the reader what they have to say?

“If the right people join in the conversation, it will inevitably get richer and richer,” Gillmor responds. “The practical problems are many. How do you get knowledgeable people to join? How do you moderate things, if it’s a large conversation, [in a way] that pushes forward the subject? How do you elevate the signal out of the noise? I happen to think that’s one of the core issues we need to address in citizen media. How do you address the fact that most people don’t have the time to read every comment on every relevant blog?”

Gillmor sketches out a scenario whereby journalists and citizens would work together every step of the way, from pre-publication to well beyond. At the beginning, a reporter—instead of relying entirely on a Rolodex that may or may not lead him to the right sources—might post a message on his blog or on his news organization’s Web site. “Say, ‘Here’s what I’m working on,’ in a very public way,” says Gillmor. “And then, ‘Who should I talk to?’” After publication, Gillmor says, the reporter could keep revising his story as new information becomes available. Ideally, this would be done in a way that would allow readers to see precisely what was changed, deleted, and added over time.

If this seems revolutionary, it may be because journalism is among the most hidebound, and shortsighted, of businesses. In some ways, what journalists do has not changed significantly since the emergence of the modern newspaper in the mid 19th century. Indeed, Robert Giles, curator of the Nieman Foundation for Journalism, also based at Harvard, recalls that during his years at the newspaper chains Knight Ridder and Gannett, “stilted and restrictive economic thinking” all too often led company executives to shun innovation. Instead, they focused on immediate financial gains while ignoring the rise of technology-driven competition such as Craigslist.org and Monster.com, to their short-term benefit and long-term detriment.

“I think one of the things that’s most intriguing is his recognition that there are a lot of people in the community who are more of an authority than journalists,” Giles says of Gillmor. “They’re a resource in that regard. And newspapers have to find a way to invite them in, to tap their authority.”

A slightly different take on Gillmor’s participatory-journalism idea was recently unveiled by Jay Rosen, who’s a member of the Center for Citizen Media’s advisory board. Rosen’s notion, called NewAssignment.Net, would enable professional journalists, bloggers, and interested citizens to collaborate in public on news stories that the mainstream media have ignored. (Gillmor, in turn, is an adviser for NewAssignment.Net.)

“The thing that has fascinated Dan and myself and others is the potential power of geographically distributed groups of people cooperating to put together a story that would be very hard to do without such cooperation,” Rosen says. “We believe this continent exists”—here Rosen refers to the journalistic promised land as if it were the New World—“but we haven’t found it yet. And the only way to find it is to discover stories in which such a network actually does operate effectively. I think it’s eminently doable, and we’ll just have to see how it all works.”

Gillmor sees journalists and citizens
as working together at each step
of a news story.

In a real sense, the Center for Citizen Media is an incubator, driven not so much by a particular belief in what the future should look like as it is by Gillmor’s desire to hasten that future along. Veteran journalist Tom Stites, who hired Gillmor as a stringer around 1980 when he was national-trends editor of The New York Times, and who later hired him as a staff reporter when he was managing editor of the now-defunct Kansas City Times, sees his old protégé as a “catalyst” in the ongoing conversation of how to reinvent journalism.

“The more he stirs the pot and gets the conversation going, the faster something is going to emerge from it,” says Stites, now an associate editor with the Center for Public Integrity.

A LOT TO LEARN

On a stiflingly hot day in mid-July, Dan Gillmor is tapping on his Apple PowerBook in the air-conditioned comfort of the Harkness Commons cafeteria, at Harvard Law School. Wearing white jeans and a checked shirt with the sleeves rolled up, his hair graying and swept back, he looks like he could be one of the tech-support geeks. He speaks so softly that you have to lean forward lest you miss something.

In conversation he’s modest and self-effacing, suggesting people and programs that would make a better story.

It is somehow telling that, over the course of a two-hour conversation, Gillmor offers nary a sound bite. He answers questions in a thoughtful, matter-of-fact manner, given neither to grandiose pronouncements about his work nor self-serving statements about his own importance.

In a lecture he gave at the University of Michigan in 2005, Gillmor said, “Professional journalists have a lot to learn. If we accept the idea that we are moving toward a more conversational system, then we must remember that the first rule in having a conversation is to listen. We don’t listen very well.” In fact, Gillmor listens very well. It’s talking—especially about himself—that he’s not so good at.

Interestingly enough, if you want some insight into what makes Gillmor so passionate about journalism and technology, you might try asking him about his career as a professional musician. He was raised in upstate New York and lived for many years in Vermont, where he worked as a stringer for The Boston Globe and The New York Times. During that time Gillmor played guitar, sang, and wrote songs for a band called Road Apple—“kind of a pre-Phish Phish,” he calls it. Ask him whether his music influenced his writing and he replies, “Writing music, playing music, singing influenced my writing a great deal. Writing needs cadence and rhythm. There always, for me, needed to have some music in the words.”

But then goes off in a completely different direction—unexpected, yet more to the point, given what he’s doing now. In the 1980s Gillmor discovered MIDI, the Musical Instrument Digital Interface, a method for combining computers and music. More than a method, it was a standard, with software writers and instrument-makers agreeing to abide by that standard so that everything could work together. Suddenly it was relatively simple for a musician to write music, record all the tracks on his own, and distribute the finished result.

“These are very imperfect analogies, but it was almost like the TCP/IP of music. Or maybe the HTML,” Gillmor says. “Anyway, it was an open standard where you could see the result, you could share the result, you could build the result. And it created a global community. Not overnight, but pretty quickly.”

In a sense, what Gillmor is trying to create today is a new sort of global community. Perhaps what Gillmor really got out of music wasn’t so much cadence and rhythm as it was the ability to collaborate and listen, mediated by technology.

Which, when you think about it, sounds like a pretty good metaphor for the kind of journalism Gillmor wants to nurture.

Dan Kennedy is a visiting assistant professor at Northeastern University’s School of Journalism. His blog, Media Nation, is at medianation.blogspot.com, and he can be reached at da.kennedy@neu.edu.

Two startups try to make consultants affordable for nonprofits

Two startups try to make consultants affordable for nonprofits

most nonprofit organizations run lean, if not mean, operations, with only the largest able to afford luxuries like contracting out a new database design to private management consultants. But even in the nonprofit world, performance matters more than ever, and engaging expert consultants is no longer a frill, but a necessity. What’s a shoestring operation to do?

Two young Boston area social entrepreneurs think they’ve found the answers, one in universities and business schools, the other in private companies that have talent to spare. At New Sector Alliance, Carly Janson recruits college and MBA students to work under expert mentors on projects for nonprofits, while Common Impact’s Theresa Ellis enlists corporate employees to serve as pro bono consultants in their areas of professional expertise.

Both Common Impact and New Sector Alliance “harness the energy of volunteer labor, whether those are students, corporate volunteers, or management consulting volunteers, that the average nonprofit would not have access to otherwise,” says Kristen McCormack, director of Boston University’s School of Management Public and Nonprofit Management Program. With the boundaries between the for-profit and the nonprofit worlds increasingly blurred, she says, these social enterprises pursue a “double-bottom line” of fulfilling a social mission and generating income to support their mission by selling products or services.

The two organizations strive to satisfy the nonprofit sector’s yen for problem-solvers with 21st-century skill sets at a fraction of the cost. But can either of them, in bringing these coveted, but typically costly, services to their clients, also sustain themselves?

BEYOND INTERNSHIPS

In Massachusetts, more than elsewhere, the nonprofit sector is growing. A March 2005 MassINC economic profile documented a 23 percent increase in 501(c)(3) nonprofit organizations statewide from 1999 to 2004. More than 420,000 people are employed by nonprofit groups here. That’s 13 percent of the Massachusetts workforce, nearly double the national rate of 6.9 percent. Among these nonprofits are large, established institutions, like Harvard University and major hospitals, but most are small entities that compete vigorously for a limited pool of philanthropic dollars and service contracts. That reality makes aligning social goals with smart business practices not only acceptable but essential.

The New Sector Alliance’s
Ravi Patel (left) worked
with Jobs for the Future’s
Carmon Cunningham and
Oracle’s Faisal Anwar
to boost JFF’s
Web capabilities.

“It has become increasingly clear that nonprofits have to be as efficient and effective as possible,” says Janson, New Sector’s president and founder.

At the same time, says Janson, the nonprofit ethos—especially in its bottom-line-oriented form—holds increasing appeal for young people. The “millennials,” or the generation born between 1980 and 2000, have a new respect for and commitment to social responsibility due in part to 9/11, she says. Many also grew up with Baby Boomer parents they saw burn out from devoting their time and energies to corporate jobs. They want to get ahead, but they also want to make a difference.

So Janson puts idealistic but business-minded young people to work solving nonprofits’ problems, teaming them with consulting groups or other professional mentors. That makes for a more structured experience than they could have as a volunteer or as an intern at the agency itself.

“Sometimes students looking for nonprofit opportunities end up at dead ends,” says Nan Li, an Amherst College senior majoring in political science and economics who worked with Somerville Community Corp. this past summer through New Sector, developing a new program to help people use individual development accounts to save for education. “They can’t find an opportunity they really like.”

During the past academic year, teams of undergraduates and MBA students partnered with consultants from Accenture, the Boston Consulting Group, Bain & Co., and McKinsey & Co. to advise nonprofits on marketing, performance management, and the like. In the summer, local professionals supervised students from top colleges and universities who took on projects for nonprofit agencies in Massachusetts. This year, thanks in part to a three-year, $140,000 Massachusetts Service Alliance grant, New Sector expanded its summer fellows program nearly fivefold, enrolling 47 students—seven MBA candidates, and the rest undergraduates from Harvard, Brown, MIT, Duke, and other schools. New Sector is expanding into Connecticut this fall, sending Yale School of Management students to assignments with United Way of Connecticut and the Connecticut Housing Investment Fund.

‘Nonprofits have to be as efficient as possible.’

Jobs for the Future, a Boston–based national organization that works on education and workforce development issues, was looking for a way to communicate to large employers the potential benefits of giving low-skilled applicants a shot at entry-level jobs. That task fell to New Sector summer fellow Ravi Patel, an MIT senior. The mechanical engineering and public policy major helped the group create a “webinar,” or Web-based seminar, for more than 200 human resources executives around the world, scheduled for this fall.

“Our experience with Ravi clearly exceeded expectations,” says Carmon Cunningham, JFF’s vice president for technology and communications. And not only did Patel, working with Oracle senior applications engineer Faisal Anwar, gain valuable research-and-development experience on a challenging project, he also learned about the advantages to employers of tapping an underutilized labor force. “If you train and hire low-skilled workers, you get a high retention rate, get more positive PR, [and] solve the labor shortage pending in the next five to 10 years,” he says.

FORMS OF IMPACT

Janson launched the Boston–based New Sector Alliance in 2001. A 1998 Princeton graduate, she came to the nonprofit sector by way of Accenture, the management consulting firm that she joined in the midst of the Internet boom. In her spare time, she started recruiting friends and colleagues to volunteer at charitable organizations to help with marketing, Internet strategies, and other business planning.

Her efforts came to the attention of Michael May, then the global managing partner of Accenture’s strategy business, and when she decided to strike out on her own, May persuaded Accenture to contribute most of New Sector’s seed funding, while kicking in some money of his own.

The New Sector model, which taps eager young talent and the expertise of professionals at the same time, “satisfies multiple constituencies in terms of what they are looking to accomplish,” says May, now a lecturer in management at Babson College. “I’ve never seen anything that combines professional consulting firms with students and does work for not-for-profits.”

Common Impact also looks to bring business savvy to social enterprise but relies primarily on the talent of working professionals. Located in Cambridge, it matches 150 corporate volunteers, currently from five corporate partners—BEA Systems, Cisco Systems, Computer Associates, Fidelity Investments, and State Street Corp.—to technology, marketing, and human resource projects at nonprofit organizations.

“You have to see business and the nonprofit sector come together to address social issues,” says Ellis, founder and CEO of Common Impact. She understands that the business of business is to make a profit, she says, “but you can do that and be involved in the community in a way that really has meaning and really returns value to both the nonprofit sector and to the business.”

Fidelity has worked with Common Impact for about two years. Dennis Duquette, the firm’s vice president of community relations, says Common Impact’s skills-based volunteer model is one that allows employees to embrace roles, such as project or team leader, that go beyond their current job descriptions.

“It allows people to stretch themselves professionally, which is a huge benefit, I think, not only to the nonprofits, but to Fidelity and its employees,” says Duquette. Indeed, it is the kind of opportunity that Fidelity employees have increasingly come to expect. “[For] younger employees and folks coming into corporate America out of grad school, the position of the company in the community is very important to them,” he says. “We’ve seen that in studies and we are starting to see that in our employee orientations.”

Finding a way to use his technology skills to give something to the community was important for Raman Tallamraju, a Fidelity software engineer. Roxbury’s Hattie B. Cooper Community Center wanted to get beyond the Excel spreadsheets they’d used to track contributions, donor contact information, and fundraising activities and move up to a sophisticated donor-tracking database. Tallamraju worked with seven other Fidelity employees to build one.

Common Impact’s Theresa Ellis
brings the business
and nonprofit sectors together.

Over a six-month period in 2005, the Fidelity team worked nights and weekends creating a user-friendly Access database. Particularly gratifying to Tallamraju was the response of executive director Deb Ansourlian to the presentation introducing their new product to the Cooper Center’s staff.

“She was stunned by the capabilities we could offer to her in such a short time,” says Tallamraju. Her reaction, he says, was “priceless.”

After graduating from Dartmouth in 1997, Ellis worked on school organizational development and policy issues for a for-profit boutique consulting firm in Washington, DC, and served as a board member for the local branch of Literacy Volunteers of America. She started Common Impact (originally calling it Impact Builders) at her kitchen table, and out of her own pocketbook, six years ago.

Volunteer time and labor are important to community groups, as anyone who directs a food pantry or soup kitchen can attest. Ellis realized that many professionals want to put not only their labor, but also their expertise, to work in the nonprofit sector. The problem is that small agencies struggling to meet immediate needs may not know how to get the most out of, say, a volunteer IT expert.

“What has been missing in this equation is someone who straddles both worlds effectively, translating the language, mediating the questions, guiding both parties forward,” Ellis says.

BU’s McCormack agrees. “We have lots of volunteer opportunities for people who want to go paint the rec room or build the playground or serve the food,” she says. “There are very few organizations that know how to harness the [professional] skills of corporate volunteers who might be lawyers or architects or finance [or marketing] people.”

What is Common Impact’s impact on its nonprofit clients? Ellis says she can boil it down to dollars and cents: The $750,000 invested in Common Impact by donors and foundations over the past six years has generated $5 million in new resources for about 80 nonprofit clients so far. In addition, 33 percent of corporate volunteers stay involved with the client after they finish a project.

For its part, New Sector Alliance has completed 133 consulting projects for more than 80 nonprofit clients, providing more than $10 million in services to date.

THEIR OWN BOTTOM LINE

New Sector and Common Impact may not be high-priced outfits like McKinsey, but they do have to make ends meet. And, eventually, both want to become self-sustaining, by reducing their reliance on philanthropic dollars and increasing income from fees.

New Sector hopes to break even by 2009. Initially, the firm offered its services pro bono. While that’s still the case for very small nonprofits, today New Sector charges fees of up to $10,000, depending on the length of the placement and the types of people involved, though it hopes to raise funds that will enable it to lower prices. For a summer fellow’s services, New Sector clients paid $2,000. A private sector consultant would have billed clients up to $150 an hour, making the market value of a summer fellow’s services as much as $60,000, according to New Sector.

To move Common Impact closer to being self-sustaining, Ellis plans to rely more on fees-for-services from nonprofit clients and corporate partners, and to a lesser extent on contributions from individuals. She envisions that revenue helping to underwrite the costs of expanding the group’s efforts to cities beyond Boston.

Common Impact, two-thirds of whose clients are small organizations with annual budgets under $2 million, charges fees ranging from $900 to $3,100. Using private sector consultants or hiring new staff to provide commensurate services would average between $25,000 and $40,000.

Consultants ordinarily charge up to $150 an hour.

Even so, for the organizations Common Impact and New Sector serve, these services aren’t exactly cheap. “Everybody understands that nonprofits need management consulting services, and that [these services are] going to be quite important for them in terms of operating as efficient organizations,” says Harvard sociology professor Christopher Winship, who, like BU’s McCormack, sends students through New Sector’s programs. But finding the money to pay for these services is a “huge issue” for nonprofits, he says.

Some organizations, like JFF, can cover the fees out of their operating budgets. Others appeal to an individual donor, such as a board member, or seek foundation grants to underwrite all or part of those costs. But has a truly viable model for paying for these services emerged?

“That’s a really tough one,” says Geeta Pradhan, non-profit sector program director for the Boston Foundation. Most individual, government, or foundation funding goes to the delivery of services and programs, not toward organizational development, she says, but a few national funders are in the early stages of studying organizational investments, based on the theory that if a group is effective and is well-organized, it will provide better programs and services. The drawback to that approach is that a funder can usually afford to invest that heavily in only a handful of organizations. Still, nonprofits do, from time to time, have to rethink structures and operations, just like any business or other entity, says Pradhan.

A consultant doesn’t always have all the answers, but if no one in-house knows how to build a better database, contracting out for that skilled individual could help a nonprofit turn a corner. For the moment though, JFF’s Cunningham says the onus is on nonprofits to make the case to funders for that type of support. “That may change over time,” he adds, “as more organizations are able to improve their effectiveness and their bottom line through the advice and support of good consulting help.”