 Can everybody hear me? Yes. All right, there's the mic. All right, so good afternoon. We're here to talk about Opportunity Zones. Raise your hand if you are excited about Opportunity Zones. Raise your hand if you're not excited about Opportunity Zones. Oh, good. OK, someone shrugged their shoulders. They're on the fence. So let's just dive right in. Opportunity Zones are obviously about connecting communities with new sources of capital. And one of the big challenges that we see around the country today is a lack of intermediaries helping to facilitate that. So there's a big role for philanthropy as a prime mover in the intermediary category to help facilitate that connectivity. The communities in the capital connect those dots. How are you thinking about this at Rockefeller? Well, the Rockefeller Foundation together with dozens of other philanthropic institutions believe we can play a big role in helping to make sure this law works to lift up vulnerable families in communities that have been designated as Opportunity Zones. And I guess before answering the question about intermediaries, I'd like to just back up a little bit and describe why we care so much. When I started at Rockefeller probably about a year and a half ago, we kind of studied the nature of economic opportunity in America. Looked at Rod Shetty's data and so many other great analyses of what's going on in the US economy. And it became quickly and immediately apparent that especially if you take the Bay Area and two or three other urban areas out of the story, over the last 50 or 60 years, the nature of opportunity in our country has changed. And it used to be the case that there's a 90% chance you would do better than your parents if you were born in the 60s or 70s. If you're born today, it's probably less than half of that. It used to be the case if you were born in poverty, you had a 50% chance of ending up in the middle class. And today it's less than half of that. It used to be the case that business entrepreneurial new business starts was a sort of a widespread phenomenon in the US economy that people were mobile in terms of seeking job opportunities in different places and business growth opportunities that we've seen both new business starts and mobility across the nation come down considerably. And when you map where the lack of opportunities most dire, it maps to specific places. So the 8,700 plus designated opportunity zones, as you know, are high percentage minority population. They have a 54% population of Hispanic American and African American population rate. They're high poverty. They have a 30 plus percent poverty rate. High unemployment. So even today when our nation has a near 4% unemployment rate, the opportunity zones have a 12 or 13% unemployment rate. So the law has done a good thing in creating a designation that does, in fact, target those communities where the economy has been more stagnant and where opportunity is much harder to come by. You asked a question about are there intermediaries now, meaning opportunities-owned funds, that can take capital and put them to work in those places? And we just completed a call for proposals together with the Kresge Foundation. And across the 150 plus proposals we got, we are seeing about $12 billion of new fund formation that's coming together to take advantage of this opportunity. We're seeing the majority of it. We're seeing not all of it is real estate. A lot of it is real estate. But 40% of the applicants we saw were not only real estate. They included support for operating businesses, efforts to start new businesses, and efforts to do mixed use business opportunities that combine real estate with other efforts. We saw a huge focus on affordable housing in particular. And we saw funds propose ways to measure their impact using criteria of job creation, everything from job creation to carbon emissions reductions in their proposals. So we are seeing a very active fund formation environment now. And you would know more than I on the details of the legislation and the rule writing. But my instinct is now that some of the rules have been clarified, we'll see even more fund formation take place rather quickly. Yeah, I agree. I would just add to that one of the challenges that opportunities-owned communities really face is to accentuate the point you made, a lack of entrepreneurial capacity building. A lot of what we talk about at a national scale about entrepreneurship and this being an entrepreneurial country is historically true, but it's been in freefall since the recession. And that's most acutely hit low income communities and in particular communities of color around the country. And so this is a chance to really stitch back together both the capital and the entrepreneur in a way that, to your point, gets beyond real estate and into business creation and job creation. Well, you know, one thing we hope happens, but we haven't yet seen in the funds that are being formed, and you might have some insights on this, is we haven't seen as many of those funds put forth models where there's actually shared the sharing of the capital benefit. So employee stock ownership proposals or proposals that are more focused on and conscientious of giving workers in these businesses funded by Opportunity Zone funding the ability to kind of grow their own wealth. And when you look at just the distribution of wealth in this country, the fact that a median Caucasian family in this country has, I think, $170,000 of total wealth, a median African-American family in this country has about $17,000 of total wealth. And that's stark. And so the question I'd ask is, are there strategies and experiments that philanthropies and other impact-oriented partners can support to try to use this tax law to change that reality across the 30 million people that live in these Opportunity Zones? Let me ask you to take a step back and assess the philanthropic community's response so far. What are you seeing that you really like across your sector? What would you hope to see more of in the, especially now that there's regulatory clarity coming? But what do you hope to see more of in the weeks ahead? Well, first, I give the philanthropic community defined broadly a lot of credit with helping to make this happen. You have been on the front end of that, but Sean Parker, Stephen Jean Case, Jim Sorenson, who gave that nice introduction, all played such an essential role. And without them and without you, I don't think this law would even exist. So we've got to give credit to where credit is due. That said, I think when you look at the larger philanthropic community, you know, sometimes it's easier to kind of sit back and say, gosh, is that going to work? And it's harder and more risky to say, hey, we're going to put capital and our reputation and our effort in the game to make sure it works. And it might not work, you know? And I'd say for some reason, a lot of our philanthropic partners sometimes fit in that first camp. And so we're excited to give it a shot. We're excited to do this with Kresge and many other foundations that I think can and should come together and invest in experimentation here and also invest in creating some standards and measuring impact. So we know that this big public expenditure, in terms of tax expenditure, actually yields impact in terms of lifting up vulnerable families. But I would love to see more risk taking amongst the philanthropic community across this country. It is rare to have a chance to influence $30 billion of capital flowing into the most vulnerable parts of the U.S. economy. And it's a project that is worthy of our philanthropic risk taking capabilities. I think that's really well said. One of the things that has inspired me as I've gone around the country to talk to folks in opportunity zones and meet with some of the local stakeholders is that the best solutions that are emerging are local solutions. These are not being imported from the kind of palaces of New York and the Bay Area and other places. These are communities that are taking an ownership stake in what their opportunities or zones are going to be locally. They're not looking for a broad national solution. They're looking for a local definition. And they're coming up with a lot of the answers to challenges that you hear about at the national level, whether that's displacement and gentrification, whether that's small business and entrepreneurial support. And it strikes me that there's a real role for philanthropy to play in catalyzing and investing maybe smaller stage, smaller scale rather, but in ways that help to accelerate that takeoff, that escape velocity that you're seeing in places around the country. And there's some really entrepreneurial people who are jumping into this. I want to call one of them out who I think may actually even be in the room. There's a guy named Cody Evans at Stanford. And Cody has just taken it upon himself to go around to opportunity zones in his home state and to see it on the ground and then to do the research on tax policy and tax incentives and understand what differentiates this from others. And help to build out models that will make this work in very specific type of use cases. And you see this repeated, so by the way, philanthropy should be investing in people like Cody and helping him build those new models, not just to apply old models to this new challenge of opportunity zones, but to actually rethink what the models look like in this context to solve the very problems all of us in this room care about. So I think that's part of what's inspired me is it's been an organizing principle for a lot of different bright minds from all these different sectors to come together. Many of them are here. And I guess speaking for myself, I'd love to see philanthropy take a really active role in saying we're going to help to essentially make early stage bets on some of these bright minds that are coming together around these really interesting community challenges. Well, the woman who leads this work for us is Deborah Wright. And Debbie was the CEO of the Harlem Empowerment Zone and the Housing Commissioner in New York and also the CEO of the Carver Savings Bank, Federal Savings Bank. And she has highlighted exactly what you said, that there are three elements of driving success in this context. The first is being hyper-local, really understanding what the local economic development plan is, what the local incentives for investment are, what the local growth capabilities are, and being hyper-responsive to that local reality. The second is public-private, is you gotta get local governments working with investors and businesses that are the recipients of Opportunity Zone Capital in real partnership to do everything from kind of linking back to workforce training and impact hiring strategies to helping to change zoning and other regulatory rules to layering in other kinds of capital and investment that can help a project work, not just as an economic project, but also as an economic development strategy for a local community. And the third is measuring impact and results both on the financial side, and by the way, of the funds that came in to the Rockefeller-Kresge Call for Proposal, nearly all were discussing market rate return. So they're not suggesting that they're gonna, they need to be successful as independent economic transactions, but also on the social impact side. And that's another area, I think, foundations and philanthropic partners, and you and the Think Tank community can come together and say, okay, we know how to measure that, and we know how to document whether something has had that impact or not. There's a lot of challenges in these communities. It's not just a capital challenge. So how, and you have a broad scope at Rockefeller looking across an array of issues that go beyond Opportunity Zones, obviously. What do you see the role of parallel efforts to come in, whether it's human capital focused, workforce training, other types of initiatives that could help to make Opportunity Zones more successful on the capital side? Yeah, well you said something backstage that I'm gonna remember, which was, you'll know this is working if the smartest people in every sector come together and say, I'm gonna try to help make this work. So I think you need the smartest people in workforce training and development to come to the table and say, okay, we're gonna try to focus on these 8,700 zones, plus, I don't know how many zones are there now. 8,700. 8,700, okay. These 8,700 zones, and we're gonna document and share our best practices. We're gonna need people who do the structuring of transactions and employee stock ownership plans and experimentation so that capital ownership can be more distributed to say, okay, we're gonna put some extra effort into helping these projects and transactions be on the experimental frontier of those types of ownership structures so that we can see if we can change the nature of wealth in this country, but in these places. And we're gonna need investors to sort of do their best to say, okay, we're gonna look for great deal flow and push ourselves to work in partnership and have faith as much as we can that with those kinds of public-private partnerships, we can go a little bit further at maybe reaching the rural areas that are not the immediate focus of the funds we saw come in to us in the call for proposals. So it's gonna take a lot of creativity, but the nice thing about this is big social experiments tend to be platforms for engaging high-quality thinkers and doers to do that experimental work, and we just want to enable as much of that as possible. That's great. How many people here are focused on rural communities specifically? Raise your hand. How many are specifically focused on urban? And I guess everybody else is agnostic, right? When you think about the context of, you obviously have tremendous experience in international development. That's something you know well. Are there lessons you could apply from that context in terms of domestic emerging markets and domestic development that you think are relevant here? There's always chances to look and learn in multiple directions. I can go back to commission reports like Michael Spence's growth commission from 10, 15 years ago when he studied and evaluated Southeast Asia's success stories and found that it really was focused public, private, and strategic use of tax preference, public and private investment in a shared context, and industrial development strategy but adapted for the modern era that drove success for so many of those economies. And that was a counter-cultural point of view at the time because the traditional Washington consensus was a bit more having the public sector step out of that kind of planned economic competitive advantage approach. I'd say more recently, we have seen in projects like Power Africa and efforts where we've tried to put, create real public-private partnerships in some very tough economic contexts. We've learned a lot from that. We've learned that governments especially have to rethink how they structure themselves and interact with investors in order to reduce the transaction costs and the pain and suffering that often is experienced in those projects. And so we placed what we called transactions advisors in African government offices to help move deal flow so that more power transactions could happen and it led to unlocking billions of dollars of investment for power production in Sub-Saharan Africa. I don't know if there's a learning there for here but the basic themes of public-private partnership shared strategic vision and lowering the transactions costs for everyone involved, including the private sector and public sector partners are perhaps some lessons we could experiment with. So what do you hope to see next? How will you determine, maybe we should ask ourselves this in real time here, a year from now if we're sitting here again, we talk about opportunity zones, it'll still be early in that broader market, right? But how will we know this is working a year from now in terms of what the market ecosystem looks like, what the philanthropic sector's engagement looks like, what kind of investors have stepped up? How would you think about that? Well, I'll maybe take a first step and then you have to answer the same question because that's a natural for me to ask you. I think at a minimum, I think we'd want, so we know that some of the early transactions will be more shovel-ready real estate oriented or lack of a better term. So I don't want to set expectations too high because we're going to see progress happen in stages. But I think we'd want to see a diversity of funds that get formed in the next 18 months, some that are pure real estate plays that would have probably happened anyway, some that are mixed and some that are not real estate related, that are focused on small business starts and new business development and entrepreneurial business support. And so I'd want to see a diversity of fund formation. I'd want to see mayors and local economic development leaders taking a lead in putting together deal flow and investor presentations and trying to align the capital that's coming to the economic development strategies that they believe are going to lift up their communities in the most sustainable way. And frankly, I would like to see a kind of active community. It could be EIG continuing to lead this, but an active community of people in this room working together to make some assessment of what or at least share best practices, what needs to happen to make sure that an investment in an Opportunity Zone fund that benefits from the special tax treatment is actually preferentially helping the families in those communities and reporting on it, bringing transparency to it, creating a community of people who are willing to learn together and adapt. Those would be some early indicators, but I don't think we're going to, in the first year, have magical solutions that are going to help us all say, oh gosh, we're glad that worked. It'd be nice if we have a few that we can be inspired about as we go forward. I think that's right. I think there's a real danger of unrealistic expectations getting in the way of the hard work that has to happen over time to make this work. I would just, I think you nailed it. If we had planned to say exactly the same thing, I would have said it that way. It's the scalability of a diverse and flexible market coming together with a lot of different types of investors in a lot of different types of communities. I think in a year if we see that broad set of use cases emerge, that's one way of ensuring that we're on the path to success. I'd say the localism aspect of this, that this empowers a higher degree of local ownership of economic opportunity, expanding type of policies, which we're already seeing, frankly. That's one of the early signs of success pre-market because there's really not a opportunity zones market yet. What's been happening on the community level is giving me a lot of hope that when you look around the country at the most dynamic and thoughtful mayors and local leaders, they are grabbing this and coming up with their own solutions that don't look like their neighbors, but that are right-sized for their own communities. And I think that's a tremendous way to rethink economic development more broadly and use this as a catalyst for a much broader and more innovative set of policy-making. So those two things, the diversity of the market and the localism focus of the market I think will be signs of success. Great, and I think our time is up, but I maybe would like to conclude by just noting that it is easy to sort of watch these things and say, will they work, will they not work? Would each of us have written this law and all of the regulations in exactly the way it's been written, rolled out, and developed? But I would sort of issue a bit of a challenge to this room and this SOCAP community. Impact investing, the Rockefeller Foundation's been excited to be a part of that movement for more than a decade at least. And it's a fantastic thing. This project is the biggest experiment we have in America today to see if we can mainstream impact investing, if we can bring capital to tough places to work in order to unlock opportunity and rekindle a sense of hope in the American dream in the places where it has really been tough to claim that it still exists. And I would just ask each of you to keep an open mind, to find a way to work in this space and to bring the expertise you've brought to the impact investing world to the Opportunity Zone challenge so that we can make a go of it and see if we can together make this thing work. Well said. Thanks very much, everybody. Thank you.