The trillions of dollars spent every year by public agencies, large businesses, and place-based “anchor institutions” like hospitals and colleges hold enormous potential to advance racial and economic equity.
As a result, we were thrilled to see the recent announcement by two major hospital systems in Brooklyn, NY – Maimonides Medical Center and One Brooklyn Health – committing to increase their share of non-clinical procurement from local MWBEs and other mission-aligned businesses (e.g., worker-owned enterprises) to 10 percent by 2030. That commitment represents an increase of $35-40 million per year to those businesses from these two health systems alone. It will also position these systems as clear leaders in equitable procurement: nationwide, less than two percent of the ~$350 billion spent yearly by hospitals on goods and services flows to certified minority- and/or women-owned business enterprises (MWBEs).
The announcement occurred at the Spring Convening for Brooklyn Communities Collaborative (BCC), a non-profit coalition that joins the economic and political power of anchor institutions with labor institutions, community-based organizations, and city and state government to advance health, wealth, and leadership in Brooklyn. It is the product of months of intensive collaboration between BCC and each hospital’s procurement team, with Redstone support, to identify opportunities to advance equity, understand barriers to change, learn from leaders elsewhere (e.g., the Greater University Circle Initiative in Cleveland, OH), map the small business ecosystem in Brooklyn and across New York City, and build relationships with community partners to align efforts and ensure BCC is playing an additive, complementary role.
THREE LESSONS FOR ANCHOR COLLABORATIVES
In supporting these efforts, we saw the power of such “anchor collaboratives” to spur community-driven impact through equitable procurement. Three lessons, in particular, emerged as crucial for these sorts of procurement efforts:
- “Market maker” organizations are often vital to translate aspirations into impact but are less common than other forms of small business support. The appetite among anchor institutions to shift procurement to local mission-aligned businesses is clear – as is the desire among local businesses to serve those institutions. However, both the anchors and potential vendors face challenges. Procurement leads, for example, express difficulty finding MWBEs that are cost-competitive and able to take on larger contracts. Meanwhile, MWBEs find hospitals complex to navigate and often struggle with anchors’ long payment timelines. In landscaping nearly 50 business service providers operating in Brooklyn, we found dozens that provide incubation, acceleration, or other technical assistance support and nearly 20 that provide capital, but only a handful that report assisting with accessing procurement from private institutions in general (let alone hospitals, in particular). Remedying this gap can have major returns for relatively modest costs.
- Successful market making depends on deep and ongoing relationships with anchor and community leaders. BCC’s efforts to promote equitable procurement are built on the trust and partnership it has developed with Maimonides and One Brooklyn Health staff and dozens of community-rooted organizations around Brooklyn. BCC now is uniquely positioned to help surmount the barriers to equitable procurement. Its assets include unparalleled access to hospitals’ procurement teams and data to identify opportunities, ability to draw quickly on a broad network of partners who work with local vendors, and credibility to convene both groups to explore equitable procurement opportunities.
- All the above depends on active support from anchor leadership. The BCC team knows it is taking on a hugely ambitious effort – and knows, equally, that a key ingredient in that effort is the endorsement of chief executives Ken Gibbs of Maimonides and LaRay Brown of One Brooklyn. In every conversation with veterans of anchor collaboratives elsewhere, we heard the same message: leadership support is indispensable. The recent announcement from these leaders is simply the most recent example of that commitment, and we’re thrilled to see BCC and its partners build on that momentum for equitable impact.
OPPORTUNITY FOR IMPACT
BCC and Redstone’s analysis identified three key roles for organizations to accelerate equitable procurement (the first of which, Market Maker, may be an especially high-impact role for many anchor institution collaboratives).