The Neighborhood Is the Unit of Change: Rethinking Scale in Philanthropy

Introduction

It was a standing-room-only affair at the foundation's annual gathering. The evening's keynote speaker—a nationally recognized philanthropic leader—was unveiling their organization's bold new initiative: a $25 million citywide program targeting educational outcomes across the entire metropolitan area. Glossy handouts highlighted the comprehensive approach, which promised to reach every school district, provide resources to all qualifying families, and deliver measurable outcomes within three years.

As the audience applauded enthusiastically, I couldn't help but wonder: Is this approach truly designed for maximum impact, or simply maximum visibility?

After nearly three decades working in community development—first as a resident in a historically disinvested neighborhood, then as the founder of a neighborhood-focused organization, and now as an advisor to communities nationwide—I've witnessed a persistent and fundamental misunderstanding within philanthropy about how meaningful impact actually occurs.

The issue isn't just about chasing trends or demanding unrealistic timelines, though these are certainly problems. The most critical mistake lies in philanthropy's persistent confusion about the appropriate scale of intervention. Despite mounting evidence to the contrary, foundations continue to invest in broad, diffuse citywide initiatives rather than concentrated, integrated neighborhood-level transformation efforts.

This misalignment between scale and impact represents philanthropy's most consequential blind spot—and addressing it could fundamentally transform how we approach community change.

The Scale Illusion

There's an intoxicating appeal to citywide initiatives. They make for impressive press releases, affect more people on paper, and align neatly with the administrative boundaries that most funders use to organize their giving. What foundation wouldn't prefer announcing a "$10 million initiative to transform healthcare across Metro City" rather than a "focused effort to create health equity in the Oakwood neighborhood"?

The problem is that this broad-scale approach fundamentally misunderstands how meaningful community change actually works. Research from The Pew Charitable Trusts has demonstrated the critical importance of neighborhood-level factors in shaping economic mobility and financial security. Their analysis found that the typical household in a low-poverty neighborhood has 40 times higher net worth than the typical household in a high-poverty neighborhood—and that these disparities persist even when comparing families with similar incomes. Geographic scale isn't just a detail in philanthropic work—it's a defining factor in whether initiatives succeed or fail.

Consider a real example I witnessed: A major foundation launched a citywide educational initiative targeting high school graduation rates across an entire metropolitan area. The $15 million, three-year program distributed resources to dozens of schools, provided modest support to hundreds of teachers, and funded supplemental services for thousands of students. The results? A statistically insignificant 2% improvement in graduation rates that disappeared entirely within two years of the program's conclusion.

Meanwhile, in the same city, a neighborhood-focused initiative invested $3 million over five years in a comprehensive approach to educational improvement within a 20-block area. The program integrated housing stability support for families, wraparound services at the neighborhood school, and economic opportunity programs for parents—all while building leadership capacity among residents. The results? A sustained 15% improvement in graduation rates, alongside significant gains in family stability, health outcomes, and neighborhood safety.

The difference wasn't the amount of money or even the specific programmatic approaches. The difference was scale. The citywide approach spread resources so thin that it could only deliver shallow interventions disconnected from the actual contexts in which families lived. The neighborhood approach created sufficient concentration of resources to address the interrelated challenges families faced within their actual living environment.

As Harvard's Family Research Project notes, philanthropy suffers from "the assumption that the scope of public impact correlates with the public value created." Simply reaching more people doesn't necessarily create better outcomes. In fact, the opposite is often true. The most profound impact often comes from sufficient concentration of resources at the neighborhood scale.

How Scale Fragments Impact

When foundations operate at citywide scales, they almost inevitably fragment their approach along programmatic lines. Housing initiatives operate separately from education initiatives, which operate separately from economic mobility programs, health interventions, and public safety efforts.

This siloed approach makes perfect administrative sense at the citywide level. The complexity of coordinating comprehensive, cross-sector work across an entire city would be overwhelming. But this fragmentation fundamentally undermines impact, because the challenges facing vulnerable communities don't respect these artificial programmatic boundaries.

A child doesn't experience housing instability, educational challenges, neighborhood safety concerns, and healthcare access issues as separate problems requiring separate solutions. These challenges interact and compound in real-time within the context of specific places—neighborhoods.

The neighborhood scale is where integration becomes not just possible but necessary. At this scale, it becomes impossible to ignore how the struggling elementary school, the lack of quality affordable housing, limited access to healthcare, and absence of economic opportunity are all part of the same ecosystem. The artificial boundaries between program areas dissolve when you're working in sixteen square blocks where children walk from substandard housing to underresourced schools past vacant storefronts every day.

I've observed this reality repeatedly. When foundations attempt to improve educational outcomes across an entire city through a single intervention, they're working at a scale where integrated approaches become nearly impossible. The housing department can't coordinate with the education department across thousands of cases. But at the neighborhood level, that coordination isn't just possible—it's inevitable.

This is why efforts like the Harlem Children's Zone have demonstrated such powerful results. As noted by Rockefeller Philanthropy Advisors, Geoffrey Canada was "convinced that the fate of children in poor neighborhoods will change only if their entire environment changes." This integrated, place-based approach represents the antithesis of fragmented citywide programming—and its results speak for themselves.

The Operational Reality Gap

Another critical dimension of the scale problem is the disconnect between foundation expectations and operational realities. Most foundations simply don't understand what's actually required to operate effective programs at different scales.

Citywide initiatives demand entirely different operational infrastructures than neighborhood-focused work. They require complex data systems, large administrative teams, elaborate coordination mechanisms, and sophisticated governance structures. Yet foundations often expect these citywide efforts to maintain the same overhead ratios as smaller, more focused initiatives.

This creates an impossible situation where organizations are expected to work at scales that require significant operational infrastructure while being denied the resources to build that infrastructure. The inevitable result is initiatives that appear comprehensive on paper but are operationally incapable of delivering meaningful impact.

Neighborhood-scale initiatives, by contrast, can operate with leaner infrastructures while maintaining deeper community connections. They can adapt more quickly to emerging challenges, coordinate more effectively across sectors, and maintain stronger accountability to residents. As Urban Institute research emphasizes, "neighborhood-level interventions must clearly define a target population and geography to deliver the right amount of intervention to achieve results."

This doesn't mean that neighborhood-scale work is easy or simple. It requires significant investment in community relationships, careful attention to local context, and authentic engagement with residents. But it's operationally feasible in ways that truly comprehensive citywide work simply isn't—at least not without levels of funding that far exceed what most foundations are willing to provide.

Power and Proximity

Perhaps the most profound dimension of the scale problem is how it shapes the dynamics of power and community voice. There's an inverse relationship between the scale of an initiative and the authentic inclusion of community expertise in its design and implementation.

Citywide initiatives are almost inevitably designed and directed by professional program staff, consultants, and subject matter experts who may have minimal direct connection to the communities they aim to serve. The very scale of these efforts makes meaningful community engagement logistically challenging. How do you authentically engage "the community" when your initiative spans dozens of distinct neighborhoods, each with their own history, culture, and priorities?

The result is initiatives designed from the top down, often reflecting the priorities and assumptions of funders rather than the lived experiences of residents. This distance from community voice isn't just an ethical problem—it's a practical one. Initiatives designed without authentic community input are far less likely to address the actual challenges residents face or leverage the existing assets within communities.

Neighborhood-scale work, by contrast, creates the possibility for authentic partnership with residents. When an initiative focuses on a specific place, it becomes possible to build meaningful relationships with the people who live there, understand the nuanced history and current dynamics of the community, and design approaches that genuinely align with local priorities and build on local assets.

I've witnessed this dynamic repeatedly. In one city, a major foundation launched a citywide economic mobility initiative designed entirely by professional staff and consultants. Despite good intentions and substantial investment, the program struggled to gain traction or demonstrate meaningful impact. Meanwhile, a neighborhood-focused effort in the same city, co-designed with resident leaders and aligned with community priorities, generated significant improvements in economic outcomes with a fraction of the budget.

Conclusion

Philanthropy stands at a crossroads. The conventional approach—investing in broad, diffuse citywide initiatives organized around programmatic silos—has proven insufficient for addressing our most persistent social challenges. Despite decades of well-intentioned investment, we've made dismayingly little progress in reducing poverty, improving educational outcomes, or advancing health equity in our most vulnerable communities.

An alternative path exists. By recognizing the neighborhood as the appropriate scale for transformative social change, philanthropy could fundamentally reshape its approach to impact. This doesn't mean abandoning citywide or even regional coordination—in fact, it requires stronger connections between neighborhood-focused efforts and broader system change. But it does mean prioritizing the neighborhood as the primary unit of intervention.

What would this shift look like in practice? It would mean organizing funding portfolios around places rather than programs. It would ean longer-term commitments to specific neighborhoods rather than short-term investments in broadscale initiatives. It would mean building genuine partnerships with resident leaders and community organizations. And it would mean developing the patience and humility to support community-led transformation at the pace and in the forms that make sense for specific places.

The evidence supporting this approach continues to mount. Studies on neighborhood effects consistently demonstrate that neighborhood conditions significantly impact health outcomes, economic mobility, and overall well-being. Research on effective interventions increasingly points to integrated, place-based approaches as delivering the most sustained impact.

The question isn't whether neighborhood-scale work is more effective—the evidence increasingly suggests it is. The question is whether philanthropy will have the courage and vision to reorganize itself around this reality. The communities we serve deserve nothing less.

What role will your foundation play in this evolution?