Measuring impact in Chicago

Published 14 hours ago

Proposed by MasterCard Center for Inclusive Growth

Originally published by Mastercard Center for Inclusive Growth

By Kaity Hsieh & Meegan Dugan Adell

For nearly 50 years, a grand historic building now known as the Kehrein Center for the Arts was just one of many gated properties on Chicago’s West Side. It is in a vibrant neighborhood known as Austin Chicago, which has a strong and active network of nonprofit organizations and community activists. However, decades of divestment have challenged the neighborhood. Among other things, sixty-five percent of households earn less than $50,000, in an area where seventy-five percent of residents are black.[1]. In 2019, this vacant property was transformed from an inactive building into a state-of-the-art auditorium with $5 million in grants and donations.

Multi-million dollar investments like this arts center are rare in communities like Austin, Chicago. This is partly because it can be difficult to measure their economic benefits and prove their return on investment. That’s why the Mastercard Center for Inclusive Growth and New America recently partnered with a philanthropic data analytics initiative to assess whether strategic investments can help catalyze meaningful economic growth in disinvested neighborhoods.

The Kehrein Center for the Arts was developed by a local organization called Catalyst Schools – in partnership with Rock of Our Salvation Church and Circle Urban Ministries – and is located on one of their campuses. “We have a strong commitment to the community,” says Catalyst Schools co-founder Edmund Siderewicz. “The school is not an island – it is part of the neighborhood and we stand arm in arm with our community partners and leaders.”

Siderewicz adds, “We worked tirelessly with local partners like Austin Coming Together to ensure that the project fully met the needs of the community and was rooted in the neighborhood’s quality of life plan. The renovation was funded by a mix of private donors and government grants. For example, he received a $1 million grant from the Chicago Neighborhood Opportunity Fund. State lawmakers also secured $1.25 million in capital grants[2]. Today, the space is home to the Sistema Ravinia Orchestra and Community Conversations. After the centre’s inauguration, its promoters and donors waited to see its impact on the neighborhood.

Our analysis revealed that the Kehrein Center for the Arts has not only brought music, community, and life to the Austin neighborhood, but has also spurred significant economic growth.

Mastercard has generated spend insights based on anonymized and aggregated transaction data, and derived through robust analytical techniques. The analysis showed that the center has triggered economic revitalization, just as its promoters had hoped. Indeed, this unique investment had a domino effect on the entire trade corridor where it is located.[3]. The data showed:

  • Increase in consumer spending. After the Kehrein Center for the Arts opened, there was a 12% increase in spending in the Austin neighborhood of Chicago. In the specific census tract where the arts center is located, the impact of a 20% increase in spending was even more pronounced.
  • Growth in out-of-town visitors. Not only has revenue increased, but Austin’s visitor profile has also changed. We saw a 24% increase in spending by travelers from further afield (16-80km from the center), indicating that the neighborhood is increasingly seen as a destination for visitors from the surrounding and suburban areas.
  • New business openings. Additionally, there was a 2.6% growth in new business openings in the area following the opening of the arts center.

This information was obtained through Mastercard’s patented software, Test & Learn®, which uses a scientific method to measure the impact of a “test” scenario against a “control” baseline. The platform is designed to identify the true causal link of an investment with analytical precision. Software is typically licensed by companies to measure the return on investment of business investments; however, Mastercard volunteers also use the platform for pro bono engagements like this.

One of the cornerstones of Mastercard’s Test & Learn® software is a set of algorithms that identify a relevant control group to serve as a baseline point of comparison. In this analysis, the software identified that census tracts in local Chicago neighborhoods such as Rogers Park and Garfield Ridge[4] were similar to Austin based on key financial metrics, for example, economic growth trends, spending volumes, and spending seasonality.

As you can see in the chart below, the Austin neighborhood is seeing significantly higher spending growth after the center opened. However, before the center opened, Austin had a very similar trend to other neighborhoods.

Siderewicz notes, “This new data insights really validates our mission to revitalize the neighborhood. Not only has the project had a positive impact on community building, but it has also catalyzed economic growth. »

This new use of test vs control analysis in urban planning is just the start of a trend towards more data-driven policy decisions. This helps to show that large anchor investments can catalyze the revitalization of an entire economic corridor. Moreover, it illustrates the concrete and lasting impact that strategic investments can have in low-income communities. And it demonstrates that investing in the arts can generate significant returns far beyond the arts space itself.

[1] https://www.cmap.illinois.gov/documents/10180/126764/Austin.pdf[2] Rep. La Shawn Ford, Majority Leader Senator Kimberly Lightford, and Rep. Camile Lilly[3] Our analysis was conducted using data from January 2018 to June 2020. Given the onset of the COVID pandemic in March 2020, data for the past three months has been impacted by high unemployment rates and store closures.[4] Rogers Park, Belmont Cragin, Portage Park, Garfield Ridge, Archer Heights, Englewood and Mt. Greenwood were among the areas included in the “comparable neighborhoods” group for the baseline comparison.

Originally published by Mastercard Center for Inclusive Growth

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The Mastercard Center for Inclusive Growth is focused on promoting equitable and sustainable economic growth and financial inclusion around the world. As an independent subsidiary of Mastercard, it combines data, expertise and technology with philanthropic investments to empower a community of thinkers, leaders and innovators at the forefront of inclusive growth. Follow us on Twitter @CNTR4growth and subscribe to receive our latest information.

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