How The Chicago Community Trust is Using Data to Drive Change

Businesses routinely use data analysis to make investment decisions and measure the results. More and more, philanthropic organizations are using the same data to help their donors and stakeholders better understand the impact of their investments.   

Since 2019, The Chicago Community Trust has made closing the racial and ethnic wealth gap in the Chicago region a major goal. One key strategy has been the pursuit of place-based investment — the idea that a particular project or development in a disinvested community can catalyze entrepreneurship, investment, small business growth, and new jobs. 

As it pursues this goal, the Trust determined that it would seek new and innovative ways to measure the impact of its grantmaking. The idea is to use data to understand in real-time the economic changes these investments are bringing and help make the business case for their positive impact on communities and their residents.    

One method the Trust chose to utilize is the kind of data that businesses use routinely but is seldom accessible to philanthropic organizations and community groups. As part of We Rise Together: For an Equitable and Just Recovery, we partnered with Mastercard to analyze capital flow in the proximity of our real estate investments. This information is informing progress towards our goal of improving the economies of long-disinvested Black and Latinx communities. 

(It’s important to note that the data collected by Mastercard does not identify individual transactions but provides the cumulative data anonymously.) 

One of the Trust’s place-based investments is the North Austin Center, an athletic and community center. Utilizing data on purchases made through Mastercard, we found that capital flow in the one-half mile radius of this development increased by at least $6.6 million in just the first year after the center opened. 

The actual economic impact is undoubtedly greater, as the research did not include transactions through other major credit card companies or transactions that took place in cash. 

The North Austin Center is not a store or commercial business. Yet the data shows that it generated a huge increase in economic activity in a community that too often is ignored because investors believe “there’s no money there.” It turns out that this place-based investment is an economic multiplier, generating millions of dollars in business activity and greater opportunity for the surrounding neighborhood while providing community athletic spaces and afterschool programming. 

The Trust complemented this quantitative data with qualitative research involving residents, stakeholders, youth, and what we learned from our grant recipients. For example, the data from residents indicated that people now are feeling more optimistic about the future of their neighborhood. This is important in leveraging entrepreneurship, private investment, new businesses, and jobs.  

We are seeing similar emerging trends in South Shore and North Lawndale surrounding Urban Core and North Lawndale Employment Network. In the block around Urban Core in South Shore, spending has increased at least 6.9% for discretionary purchases (clothing stores and professional services) with small, startup businesses (less than 2 years old) since the four-unit commercial building including Studio yogi opened. The block around North Lawndale Employment Network has seen consumer spending increase at least 59%, adding $1.85M to the local economy. 

By combining data from different neighborhoods, the Trust is gaining an understanding of how place-based investments influence their surrounding communities and which of their characteristics and those of the neighborhood further catalyze capital flow. Is it a store, a health center, an athletic facility, or a combination? Is it all of the above? What additional investments will sustain and grow neighborhood economies over time? This information can be shared with Trust grant partners, donors and stakeholders including foundations, local government, and corporate philanthropy to aggregate both knowledge and funding that drives the kinds of investments that promise the best return for the community.  

As a result of the analysis, we are further building the business case for more equitable investment. There is opportunity in these communities, which their residents always have known. Now, the spending data can help shift the narrative by revealing the enhanced capital flow and economic potential unlocked by place-based investments. As the Trust moves forward in our work across the Chicago region, we will continue to refine and expand our use of data to drive community investments that bring real change.