Renaisi Associate Julia Slay explains the term ‘anchor organisation’ and shares some examples of how anchors in the US have used their economic power to benefit the local communities that surround them.

Anchors are typically – though not exclusively – not for profit organisations that are based in a city or town and are unlikely to move location, usually because their purpose and mission is intrinsically bound up in that area. Examples could include Manchester University, Bristol Children’s Hospital, the Museum of London, Leeds Football Club or Glasgow airport. These organisations are unlikely to take flight if another city offers lower corporation tax or higher levels of productivity. They’re ‘anchored’ in these geographies and often act in service to the local community. 

The term ‘anchor organisation’ has been around in the US and Canada for a number of years but it is only just gaining momentum as a model that could offer new opportunities to the UK’s towns and cities. A head of steam is building:  

How can anchors support their surrounding community?

There are a whole range of ways that anchor organisations can align their core functions to improve the socio-economic conditions of the community they’re based in.  Though these are always tailored to suit the unique context they are in, the most common ‘strategies’ seem to fall into the following categories:

  • Procurement and supply chain: many anchor organisations have mapped and analysed where their spending goes, setting targets to increase the amount of money that is spent locally, or on specific types of organisations such as SMEs. This is the strategy most advanced in UK based anchors, thanks in part to CLES’s pioneering work with Preston on city-wide procurement and local wealth building.  Some of the more ambitious supply chain strategies have included incubating and establishing employee owned co-operatives as suppliers to fill a gap or failure in the existing market, such as the famous Cleveland Evergreen Model.
  • Local Impact Investing: some organisations have used their financial assets to invest in local communities or social enterprises. The aim of this investing is hugely varied, and ranges from awarding grants to lending start up loans at low cost rates.
  • Workforce and skills:  some anchor organisations have focused on local recruitment, working with schools and colleges to develop a pipeline of talent, supporting career progression and social mobility pathways for staff, and trying to recruit more of their workforce from particularly disadvantaged neighbourhoods which surround the anchor organisations.
  • Affordable housing:  some organisations have invested in buying up housing for their staff and students to live in at affordable rates, while others have developed HR policies which offer benefits to employees who live locally and want to renovate or buy local housing.  Other anchors have supported the creation of community land trusts to keep property and land locked into local ownership. This focus on housing is closely related to the next strategy – the development of public realm (below).
  • Physical development and capital projects: some city and regional anchors have become leaders in place-based regeneration (like the Cleveland model), investing in the renovation of certain areas, physical infrastructure and other capital projects.
  • Community engagement, active citizenship and volunteering:  finally, many anchor organisations have forged new partnerships with the communities they serve in order to ensure that the work they do benefits the local community. In some places, this takes the form of established public / private / community partnerships, in others an increased focus on employee volunteering.
  • Promoting the local economy: some anchors have launched campaigns and incentives to support the local economy, encouraging their staff and the wider community to live, hire and buy locally.

Anchor organisations in the UK

Leading UK institutions, from sectors as diverse as diverse as housing, local government, health, arts and culture, are increasingly thinking about how they can support community wealth building.  The language changes but they are united by a common aspiration and the question: how can organisations can use their economic power to better serve the communities and places they are based in?

For the next year, I’ll be working with Renaisi and Hackney and the City of London anchors to understand what they’re already doing on this agenda, and how to take it further. You can read more about that here.

Get in touch if you are interested in joining an action learning network to explore how large not-for-profit organisations can come together to use their institutional and economic power to achieve positive social change in the City of London and Hackney.

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The original research for this work was conducted by Julia Slay in the USA and has been generously supported by the Winston Churchill Memorial Trust.

Julia Slay Renaisi Associate