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Close the Gap: A Business Response To our Region’s Growing DisparitiesClose the Gap: A Business Response To our Region’s Growing Disparities

Fall 2008

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TODAY’S AGENDA

• Overview of the Itasca Project

• Socioeconomic disparities in our region– Findings from Mind the Gap report– Highlights of Close the Gap documentary

• Itasca’s response

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THE ITASCA PROJECT

What is Itasca

Who is Itasca

An employer-led alliance to drive regional efforts to keep the Twin Cities’ economy and quality of life competitive with other regions

50-plus community leaders

•Primarily private sector CEOs

• Includes a handful of public sector leaders, such as the Governor, the Mayors of Minneapolis and St. Paul, Chair of the Met Council, and the leaders of the University of Minnesota and MNSCU

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ITASCA IMPACTS ECONOMIC COMPETITIVENESS AND QUALITY OF LIFE BY FOCUSING ON IMPORTANT ISSUE AREAS

• Building Financial Fitness• Understanding and Addressing

Socioeconomic Disparities (Close the Gap)

Socioeconomic disparitiesSocioeconomic disparities

• Creating a World-class K-12 School System in MN

• Supporting the Strategic Re-direction of Minneapolis Public Schools

• Improving Early Childhood Development

EducationEducation

• Strengthening University-Business Relationships

• Retaining and Growing Leading Employers

• Supporting Small Business• Building Financial Fitness

Business & economic growthBusiness & economic growth Infrastructure & enablersInfrastructure & enablers

• Setting Regional Performance Indicators

• Advancing a Comprehensive Transportation Plan

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TODAY’S AGENDA

• Overview of the Itasca Project

• Socioeconomic disparities in our region– Findings from Mind the Gap report– Highlights of Close the Gap documentary

• Itasca’s response

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THE ITASCA PROJECT AND SOCIOECONOMIC DISPARITIES

Addressing the region’s socioeconomic disparities was one of the first issues the Itasca Project took on when it was founded over five years ago.

With support from the McKnight Foundation, Itasca worked with the Brookings Institution Metropolitan Policy Program to better understand the nature and magnitude of our socioeconomic disparities.

This report was used to raise awareness of the troubling disparities and to motivate change in our community. In 2008, in an effort to further build awareness, Itasca partnered with Twin Cities Public Television (tpt) to create a documentary to bring the disparities highlighted in Mind the Gap to life.

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DISPARITIES IN OUR REGION ARE GROWING, AND THREATEN OUR ECONOMIC HEALTH

In Minnesota, not all children are “above average.” In fact, large populations are struggling

In spite of our overall economic strength, there are 3 stark and growing socioeconomic gaps in the Twin Cities – gaps tied to race, class, and place – which threaten to undermine our region’s future

Closing these gaps now is not just the right thing to do, but the smart thing to do

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RACE DISPARITIES CUT ACROSS ALL SOCIOECONOMIC INDICATORS. THEY AFFECT ALMOST ALL NONWHITE RACE AND ETHNIC POPULATIONS . . .

Source: Brookings Institution; Wilder Foundation; MN Department of Health Center for Health Statistics

RACE

Compared to the average white Twin Cities resident

The average black Twin Cities resident is:– Earning 48% less – 73% less likely to own a home

The average Latino Twin Cities resident is:– 4 times more likely to be uninsured – 5 times more likely to be a teen mother

The average Native American Twin Cities resident is:– 2.5 times less likely to have access to a car– 5.5 times more likely to receive inadequate prenatal care

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NONWHITE MINNESOTANS ARE SIGNIFICANTLY LESS LIKELY TO HAVE INSURANCE

Source: MN Health Access Survey (2001, 2004, 2007)

RACE

2001 2004 2007

American Indian

19% 22% 16%

Asian 8% 10% 6%

Black 17% 14% 15%

Hispanic 24% 31% 19%

White (Non-Hispanic)

5% 6% 6%

All 6% 8% 7%

Uninsured population (ages 0 – 64) Percent

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WITH RAPIDLY GROWING MINORITY POPULATIONS, THESE RACIAL AND ETHNIC DISPARITIES ARE BECOMING MORE PROMINENT

Source: Twin Cities Compass

RACE

Population by racePercent

917 20

83 8091

20071990

Nonwhite

White

Between 1990 and 2007 the metro added over

350,000 minority residents – a 166%

increase

2000

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BEFORE REACHING SCHOOL AGE, LOW-INCOME CHILDREN FALL BEHIND HIGHER-INCOME PEERS

Source: MN School Readiness Year 2 study

CLASS

8

10

17

55,001-75,000

35,001-55,000

75,001 or more

0-35,000

6

Language and literacy

8

15

6

10

Mathematical thinking Income Dollars

Percentage of MN Children rated “not yet” performing adequately at kindergarten entrance, by household income

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THIS DISADVANTAGE CONTINUES THROUGHOUT THE EDUCATIONAL SYSTEM, REGARDLESS OF RACE

Source:Metro Trend Watch, Brookings Institution

Low income (up to 185% of poverty level)

All other students

82%

66%

55%

52%

55%

24%

26%

27%

33%

49%White

American Indian

Black

Asian

Hispanic

Third-graders proficient in reading, 2001-02 – Minneapolis and St. Paul

CLASS

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INCOME, LIKE RACE, IS TIED TO A MULTITUDE OF OTHER SOCIOECONOMIC INDICATORS – FOR EXAMPLE, HEALTH

Percent in Poor/Fair Health by Income*

Source:Robert Wood Johnson Foundation, February 2008, Overcoming Obstacles to Health: Stories, Facts and Findings, National Health Interview Survey, 2001-2005

CLASS

7

10

14

21

31

>400% FPL

300 - 399% FPL

200 - 299% FPL

100 - 199% FPL

100% FPL

Percent in Poor/Fair Health by Race

11

19

21

White, Non-Hispanic

Hispanic

Black, Non-Hispanic

* Defined by relation to Federal Poverty Level (FPL)

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THE CENTRAL CITIES HAVE HIGHER CONCENTRATIONS OF POPULATIONS THAT STRUGGLE WITH RACE AND CLASS DISPARITIES

23

54 54

46 46

77

Total population

Minneapolis – St. Paul

Suburbs

Non-white population

Poverty population

Source: Brookings Institution; Wilder Foundation; HUD State of the Cities database

Percent share of population, 2000

PLACE

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POVERTY IS CONCENTRATED IN THE 2 CENTRAL CITIES

Source: Brookings Institution

Share of persons living in poverty, 2000

PLACE

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FROM AN ECONOMIC COMPETITIVENESS STANDPOINT, WHY SHOULD THE TWIN CITIES REGION WORK TOWARD REDUCING DISPARITIES?

Reducing disparities among race and income groups builds a more competitive workforce

– In 2011, the baby boomers will start to retire. By 2029, the oldest baby boomers will retire

– By 2029, the region will have to replace 776,000 workers – 350,000 of these are highly educated

– The achievement gap suggests that, without intervention, the replacement workforce will not match skills of boomers

Reducing disparities among race and income has a positive economic impact

– Increase the tax base – Reduce poverty expenditures – Put more money in the local economy

Reducing disparities among places will make the region stronger and more competitive

– Research suggests that fates of large cities and their metropolitan areas are intertwined – they grow together or they decline together

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MINORITIES WILL MAKE UP A MUCH LARGER SHARE OF THE TWIN CITIES’ FUTURE WORKFORCE

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CLOSE THE GAP DOCUMENTARY

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TODAY’S AGENDA

• Overview of the Itasca Project

• Socioeconomic disparities in our region– Findings from Mind the Gap report– Highlights of Close the Gap documentary

• Itasca’s response

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BROOKINGS SUGGESTED 3 KEY STRATEGIES TO REDUCE DISPARITIES

Update the basics – Make sure education, healthcare, and public safety meet the needs of the region’s 21st century population

Increase income and wealth – Help minority groups close the gap on economic measures (e.g., access to EITC and food stamps, homeownership, financial literacy)

Act regionally – Issues are regional and require regional solutions

Update the basics – Make sure education, healthcare, and public safety meet the needs of the region’s 21st century population

Increase income and wealth – Help minority groups close the gap on economic measures (e.g., access to EITC and food stamps, homeownership, financial literacy)

Act regionally – Issues are regional and require regional solutions

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IN RESPONSE, ITASCA LAUNCHED SEVERAL TASK FORCES TO FURTHER ADDRESS DISPARITIES

Addressing Socioeconomic DisparitiesMary Brainerd (CEO of HealthPartners) and Lynn Casey (President & CEO of Padilla Speer Beardsley)

Financially Fit MinnesotaBrad Anderson (CEO of Best Buy)

Supporting the Strategic Re-direction of Minneapolis Public SchoolsBruce Nicholson (President and CEO of Thrivent Financial)

Creating a World-Class K-12 Education System in MNDick Pettingill (President and CEO of Allina Hospitals and Clinics)

Twin Cities CompassIrv Weiser (Retired Chairman & CEO of RBC Dain Rauscher) and Kathy Tunheim (President & CEO of Tunheim Partners)

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11

33

44

55

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• Created a Speakers Bureau to distribute message from Mind the Gap

• Created a Speakers Bureau to distribute message from Mind the Gap

Actions Results

Speakers Bureau

Close the Gap toolkit

Close the Gap documentary

• Included tactical suggestions for employers in areas such as Income and Asset Development, Housing, Early Childhood Education, Educational Attainment, Health Care

• Included tactical suggestions for employers in areas such as Income and Asset Development, Housing, Early Childhood Education, Educational Attainment, Health Care

• Presented to over 10,000 people (and counting)

• Presented to over 10,000 people (and counting)

• Distributed over 6,000• Businesses, churches, city and

county departments, and universities incorporated into strategic plans

• Distributed over 6,000• Businesses, churches, city and

county departments, and universities incorporated into strategic plans

• Partnered with tpt to create a documentary which brings to life the disparities highlighted in Mind the Gap

• Partnered with tpt to create a documentary which brings to life the disparities highlighted in Mind the Gap

• Over 50,000 households have viewed all or part of documentary on air

• 8,000 visitors to Close the Gap website• 1,500 DVD’s distributed

• Over 50,000 households have viewed all or part of documentary on air

• 8,000 visitors to Close the Gap website• 1,500 DVD’s distributed

In addition, Itasca has supported community efforts such as ServeAmerica early literacy program, EITC programs and STEP UP summer jobs

In addition, Itasca has supported community efforts such as ServeAmerica early literacy program, EITC programs and STEP UP summer jobs

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FINANCIALLY FIT MINNESOTA

• Mind the Gap report highlighted disparities in financial well-being and recommended a focus on improving financial literacy

• Further research revealed that families in Minnesota and throughout the U.S. are increasingly engaging in unsound financial behavior, with particularly dire consequences for low income families

• In response, The Itasca Project launched Financially Fit Minnesota, which asks companies to commit to increasing participation rates in direct deposit and retirement – and to close the gaps between employee groups

Financially Fit Minnesota employers

3M ▪ Allina Hospitals & Clinics ▪ Best Buy ▪ Deluxe Corp. ▪ Fairview Health Services ▪ Federated Insurance ▪ General Mills ▪ HealthPartners ▪ Jefferson Lines ▪ Met Council ▪ Minneapolis/St. Paul Business Journal ▪ Mortenson Construction ▪ Pentair ▪ Regions Hospital ▪ SUPERVALU ▪ Target ▪ Thor Construction ▪ Thrivent Financial for Lutherans ▪ Travelers ▪ University of Minnesota ▪ U.S. Bancorp ▪ Weber Shandwick ▪ Wells Fargo ▪ Xcel Energy

Still recruiting more employers! Visit www.FinanciallyFitMN.org or email info@FinanciallyFitMN.org for details

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Strategy

HOW FINANCIALLY FIT MINNESOTA WORKS

•Model employer behaviors that set a new community standard

•Recruit employers to make organizational commit to –Increase direct deposit participation–Increase retirement plan participation

•Provide tools to help employers set and meet goals – with a focus on closing gaps between employee groups

Objective

Goal is to impact 50,000 Minnesota families

by end of 2009

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SUPPORTING THE STRATEGIC RE-DIRECTION OF MINNEAPOLIS PUBLIC SCHOOLS

• Minneapolis Public Schools faces significant challenges– District lost 25% of students in six years, causing financial

challenges and budget deficits– Falling behind on state testing (75% of individual schools below

state average)– Dramatic achievement gaps (e.g, 82% Caucasian proficient in

math vs. 34% for African American)

• Itasca supported the Strategic Planning process for Minneapolis Public Schools

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CREATING A WORLD-CLASS K-12 EDUCATION SYSTEM IN MN

Source:“Minnesota Population Projections 2005-2035”, Minnesota State Demographic Center, June 2007; “Knocking at the College Door,” Western Interstate Commission for Higher Education (WICHE), March 2008

Identify the “best practices” that define world-class K-12 schools and systems

a

Benchmark Minnesota’s performance and system practices against US and international systems

b

Prioritize 3-5 changes to drive Minnesota to world-class “best practices”

c

The Itasca Project and Minnesota Business Partnership are co-sponsoring an initiative to:

Graduation Rates and 10-Year Growth by EthnicityPercent, 2008-2018

160

5728

-4-14-50

0

50

100

150

200

0

20

40

60

80

Graduation

Rate

White Am.

IndianAsian Black His-

panic

Growth

Though historically strong, Minnesota and its education system are facing a number of challenges, including:• Increasing global competition, requiring educated

workforce to remain competitive• Indications that MN students are lagging international

counterparts on achievement• Significant achievement gaps, with a shifting demographic

mix towards student groups who demonstrate lower rates of success in current system (shown below)

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TWIN CITIES COMPASS: www.tccompass.org

• Twin Cities Compass promotes our region's well-being by – Measuring progress– Reporting findings– Providing strategies

for action

• Tracks regional indicators across eight key areas

• Itasca supported development and led the convening of experts to identify key indicators

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SINCE ITS LAUNCH FIVE YEARS AGO, ITASCA HAS MADE SIGNIFICANT IMPACT ON A WIDE ARRAY OF INITIATIVES

• Supported efforts to secure dedicated funding for transportation • Launched Financially Fit Minnesota – 26 employers working to

improve financial fitness of employees• Created “front-door” to University of Minnesota, greatly

enhancing businesses’ ability to access services and for University technology transfer

• Launched cultivation program to retain and grow Minnesota’s large employers, an important driver of economic competitiveness

• Built awareness of socioeconomic disparities by presenting Mind the Gap to over 10,000 community members; in addition, 50,000 households have seen all or part of Close the Gap documentary

• Supported strategic plan at Minneapolis Public Schools; set path for district reform

• Played leading role in creation and implementation of Twin Cities Compass

• Distributed Close the Gap toolkits to 6,000 employers and helped create plans to address socioeconomic disparities

• Created the GetGoMN.org to link entrepreneurs with funders and support services

• Helped hundreds of Minneapolis students to access summer jobs through Step Up summer job programs

• CEO’s drive and lead every task force – spend real time engaging on the issues

• Relatively small budget, funded by partnership between CEO’s and local Foundations

• Leverage millions of dollars and thousands of hours in pro-bono services and volunteer efforts from community organizations and businesses

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WHY ITASCA IS EFFECTIVE

• Find a unique role for Itasca to play. Role varies by initiative, but usually fills a leadership gap in region

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• Driven by passion. Each initiative driven by a CEO – based on their passions

11

• Lead with the facts. Willing to invest time and money required to get the best common fact base

22

• Collaborate and partner. Work with those organizations who can help get things done

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COMPANY SPECIFIC EXAMPLE - HEALTHPARTNERS

• . REDUCE IDENTIFIED HEALTH DISPARITIES

• . INCREASE DIVERSITY

• . FINANCIAL FITNESS “ PACESETTER”

• . “MIND THE GAP” COMMUNITY ENGAGEMENT

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OPTIMAL DIABETES CARE BY RACEAT HEALTHPARTNERS

Optimal Diabetes Care% patients that meet all 5 treatment goals: controlled blood sugars, cholesterol,

& blood pressure, and regular aspirin use,& non-tobacco use.

13.9%

18.9%

11.6% 12.9%

20.4%19.2%

24.5%

12.9%

18.2%

23.5%

0%

5%

10%

15%

20%

25%

30%

American Indianor Alaskan

Native

Asian Black or African-American

Hispanic orLatino

White

% O

pti

mal

ly M

anag

ed

1Q07 4Q07

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% PATIENTS UP-TO-DATE WITH PREVENTIVE SERVICESHEALTHPARTNERS, 3RD QUARTER 2007

86%

47%

69%

84%

92%

57%

85% 85%89%

47%

77%83%

89%

53%

81%87%

92%

61%

88% 89%

0%

20%

40%

60%

80%

100%

Cholesterol Colorectal Mammography Pap

American Indian or Alaska Native Asian Black or African-American Hispanic or Latino White

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PREVENTIVE SERVICES BY RACE MESSAGESHEALTHPARTNERS 2007

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WHAT CAN PUBLIC HEALTH LEADERS DO TO ADDRESS SOCIOECONOMIC DISPARITIES?

• Look critically at your organization. Conduct an internal assessment and explore how your can incorporate strategies to close the gap into your organizations– Use Close the Gap toolkit for ideas available at:

www.unitedwaytwincities.org/CommunityInfo/closethegap.cfm

• Join Financially Fit Minnesota. Help your employees be more financially secure and prepared for the future– Visit: www.FinanciallyFitMN.org– Email: info@FinanciallyFitMN.org

• Raise awareness and catalyze action. To motivate change, broad awareness and understanding of these issues is required. Use the tpt Close the Gap documentary and the Human Resources Diversity Council discussion guide (coming soon!) to host a discussion at your organization. – Watch for more at: www.tccompass.org/disparities

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We all have a role to play in addressing

socioeconomic disparities

Resources:• Twin Cities Compass: www.tccompass.org• Close the Gap documentary and tools: www.tccompass.org/disparities• Mind the Gap report and Close the Gap toolkit:

www.unitedwaytwincities.org/CommunityInfo/closethegap.cfm• Financially Fit Minnesota: www.FinanciallyFitMN.org

For more info on The Itasca Project and initiatives:• Contact allison_barmann@mckinsey.com