How a Philanthropic Family Is Putting Power in the Hands of a Historically Underserved Community

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In southeastern San Diego, the Market Creek Plaza stands bright and colorful against the blue California sky. The plaza offers a variety of shopping and dining options, including a big-name grocery store, a bank and the ever-important coffee shop. Although it may sound similar to thousands of other shopping centers, for the residents of this San Diego community, it fills a crucial need.

Completed in 2004, the Market Creek Plaza houses the neighborhood’s first major grocery store in 30 years, the first sit-down restaurant, and a bevy of popular fast food options. Prior to this, the area was a food desert, which the USDA defines as an area that lacks grocery stores that sell healthy and affordable food. Although the neighborhood is still federally designated as a food desert, a 2014 report from San Diego State University found that this label does not accurately reflect its food landscape. 

The Market Creek Plaza was spearheaded by the Jacobs Center for Neighborhood Innovation, a neighborhood-focused nonprofit organization dedicated to uplifting southeastern San Diego through community engagement, economic development and real estate development. 

The Jacobs Center was founded in 1995 by Dr. Joseph J. Jacobs and his wife, Violet Jacobs, of the family behind the Jacobs Engineering Group, an international engineering and construction firm that began as a one-man consulting firm and grew into a Fortune 500 company.

Now, after 25 years, the Jacobs Center is transitioning from being a mostly family-governed organization to a community-governed one, while continuing its work to “support community sustainability through development and engagement.” In January of this year, for the first time in its history, community members became the majority of the board of directors, which is now made up of five community members and four family members.

The majority of the funding for the Jacobs Center comes from the family’s foundation. In anticipation of the family transitioning out, however, the center has begun diversifying its fundraising, drawing on government funds as well as private and corporate philanthropy. Funders currently include the Parker Foundation, the San Diego Foundation, the Annie E. Casey Foundation and a donor-advised fund (or funds) at Fidelity Charitable, among others.

“This is a true example of philanthropy coming in as a catalyst for community building, investing and transferring elements of assets over to community governance,” said Reginald Jones, president and CEO of the Jacobs Center.

Infrastructure and opportunity

The Jacobs Family Foundation, which is separate from the Jacobs Center, was founded in 1988. Some time after, the family moved to southeastern San Diego and decided to support the community.

“We wanted to do economic development because my father, who’s the donor, felt that charity was demeaning to people and that the most respectful thing that you can do for people is to provide them with a living-wage job,” said Valerie Jacobs Hapke, who chairs the Jacobs Center’s board. Hapke, her husband and their two children serve on the board.

One of the biggest issues facing southeastern San Diego is a lack of investment. The area has been largely ignored by big philanthropists, Hapke said. Problems include poor infrastructure, limited access to commercial and retail services, and education quality. The community, which represents people of approximately 12 ethnicities, has also faced racial and ethnic tensions. 

These, according to Jones, are “all of the issues that plague the urban inner-city neighborhoods, and particularly neighborhoods that have been left behind in the urban renewal process.”

The U.S Department of Housing and Urban Development (HUD) has designated southeastern San Diego as a “Promise Zone”—high-poverty areas where the government seeks to work with local leaders to increase economic activity and job growth, improve education and reduce crime, and leverage private funding to improve residents’ quality of life.

According to the California Governor’s Office for Business and Economic Development, the San Diego Promise Zone has a population of more than 81,000 and a 39.06% poverty rate. The demographics break down as follows: 71% Latino, 12% Black, 6% Asian and 9% white. 

The state government has also designated the area as an “Opportunity Zone,” which it defines as an economically distressed community where some new investments may receive preferential federal tax treatment or consideration for grants and programs. The original impetus for the Opportunity Zones was federal—the Investing in Opportunity Act, part of the Trump-era Tax Cuts and Jobs Act, created tax incentives for private investment in low-income areas nationwide.

As Inside Philanthropy has written before, however, the Opportunity Zones have largely failed to deliver. The Jacobs Center, for its part, is looking to turn these opportunities into a reality, and is one of a variety of philanthropy-backed efforts to do so. National funders have also tried to make the zones work—with mixed results—including the Rockefeller Foundation and the Kresge Foundation.

The Jacobs family’s goal for the Jacobs Center is two-fold: to improve the physical infrastructure of the community (i.e., roads, streets and housing), and to lift up opportunities for economic advancement for residents. 

A large part of the center’s work has been engaging the community in ways that bring residents to the table to diversify the conversation around the community’s needs. 

“That’s not to say that that eliminates all of the challenges of race and place,” Jones said. “But there are things that all ethnicities have in common—all want quality infrastructure, quality housing… and certainly, quality education opportunities for children in that neighborhood.”

“That’s where you can really begin to build a neighborhood and get synergy among the different ethnicity groups that reside in the community,” he added.

According to Hapke, the neighborhood has gone through significant changes over the past few years. The Jacobs Center has helped bring in new retail opportunities, new housing, and improved infrastructure. In addition, a Live Well Center is planned, which will be a one-stop shop for county and community-based services, including a family resource center, public health, behavioral health services, and restorative justice services, among others. 

“I think that we’re walking the walk in the sense that people talk about equity and that philanthropists hold onto the treasure and dole it out very gradually,” Hapke said. “We’re basically all-in.” The family foundation’s giving record bears that out: In 2019, it gave a total of $1,910,595. Only $10,595 of that didn’t go to the Jacobs Center.

Business accelerator

One of the Jacobs Center’s most significant contributions to southeastern San Diego is its business accelerator, a free, four-month program for businesses with low- and moderate-income founders. The business accelerator, which is part of Connect All at the Jacobs Center (CAJC) is a partnership between the Jacobs Center and the City of San Diego. The program is funded through a community development block grant provided to the city by HUD. It also received corporate support, primarily from banking entities. 

“Our interest is to provide a network of resources for entrepreneurs that otherwise may not have had the opportunity to get connected to an accelerator,” said Christina Bibler, director of economic development for the City of San Diego. “How the city supports that is by participating in the funding for the program, but also in reviewing the competitions at the end, as these businesses strengthen and develop their business plans and models.”

The city made an initial investment of $2.5 million over four years. The initial capital investment to build the accelerator was $1 million. Each year after that, the city included an additional $500,000 in support. To date, there have been five CAJC cohorts. 

According to Bibler, the hope is that although only one business wins the competition at the end of the year, all the businesses that participated in the accelerator will become successful and, in turn, hire residents from within their own neighborhoods.

“This has been a really successful example of how we don’t always think of business accelerators and incubators in certain areas of the city,” Bibler said. “I think that it has been a tremendous partnership that I would love to see continue on, and also be a model for other areas and other cities to take a look at… I think it’s been a fantastic example of serving underserved neighborhoods with more business opportunities.”

Decolonizing wealth

In a time of increased social justice consciousness, the Jacobs Center’s strategy of bringing in white wealth as a catalyst, building out a predominantly minority community, and then transferring the assets into community government is particularly appealing. This, Jones said, is a way of decolonizing wealth—a nod to Edgar Villanueva’s influential analysis.

“I think of the biggest accomplishments… was the theory of change that this project started out [with],” Jones said, “to go into a neighborhood, engage with residents, build the community out in accordance with a community-driven master plan, and have the provision to transfer those assets beyond the coffers of the foundation into a community-governance entity.”

The Jacobs Center for Innovation is on track to transition to full community governance by 2025, with Jacobs Family Foundation stepping aside from leading the work in Southeastern San Diego. “Nobody really thinks about working themselves out of a job… but I think we’re well on our own way,” Jones said.

“I would challenge philanthropy to look more at these types of comprehensive deployments in historically underinvested communities for [the] long term, and to weather the storms of challenge,” Jones said. He added that the Jacobs Center serves as an example of the benefits of long-term investment in a community, rather than the three-year strategic plans that are more often seen in philanthropy. 

“Philanthropy can’t do it all,” he said. “But if it weren’t for philanthropy, I don’t know that this community would be developing in the way that we see it now.”