Financial innovation in the welfare state: Philanthropy and social impact investing in the North American Rust Belt

Authors: Emily Rosenman*, University of Toronto
Topics: Urban Geography, Economic Geography, Urban and Regional Planning
Keywords: finance, welfare state, social policy, disinvested cities
Session Type: Paper
Scheduler ID: FRI-099-8:00 a.m.
Day: 4/13/2018
Start / End Time: 8:00 AM / 9:40 AM
Room: Astor Ballroom I, Astor, 2nd Floor


In the contemporary context of austerity and widening economic inequality, disinvested cities struggle to fund social goods when their capacity to do so is ever more dependent on an ability to attract outside investments. While the welfare state in the US and Canada has since the 1970s been increasingly contacted out to nonprofit organizations, the past decade has seen a shift in thought about how the public, private, and nonprofit sectors should work together to fund and provide social goods. Beyond simply serving clients in need, social services are increasingly validated in terms of their ability to attract the interest of investors seeking financial returns. This paper examines investments made in social services by philanthropic foundations, wealthy individuals, institutional investors, and financial institutions that all seek evidence of social impacts alongside financial returns on investment. Through interviews with investors and secondary analysis of investing activities, I explore the spatialities of this investing in Hamilton, Ontario and Detroit, Michigan – what types of services attract private investment, and where? How does this new capital relate to existing structures of welfare provision, and with what implications for planning, community control, and equitable access to services?

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