Attracting high-quality investments to an underserved region: Fresno Economic Development Corporation (EDC)

Fresno EDC has adapted impact accounting principles in several ways to support business clients as they seek public and private incentives and impact-first investments.

The Fresno County EDC is a public/private nonprofit organization established to market Fresno County, California as the premier location for business prosperity. EDC facilitates site selection for new businesses in Fresno County and assists in the retention and expansion of businesses through its alliance with collaborative partners and resources.

Objective

Traditional economic development, which prioritizes regional competition and the lowest costs for businesses, fails to evaluate the potential social and environmental impact of business and economic development projects in a given region. As a result, lower-income communities like Fresno are afforded projects focused on low-wage work and extractive industries. To counter this race to the bottom, Fresno EDC seized upon impact accounting to highlight the region’s diversity, economic potential, and socioeconomic needs.

This work is part of a wider portfolio of projects, known as the Fresno DRIVE Initiative (Developing the Region’s Inclusive and Vibrant Economy), aimed at inclusive and sustainable economic development. DRIVE has garnered national attention and significant public and private investments.

Impact accounting is a paradigm shift with regards to aligning private incentives to community wellbeing.

Will Oliver, President & CEO, Fresno EDC

Application

Fresno EDC has adapted impact accounting principles in several ways to support business clients as they seek public and private incentives and impact-first investments. The organization has also developed a community scorecard that incorporates impact accounting metrics into a framework to evaluate business and economic development projects from the perspective of underrepresented communities.

Impact accounting, as well as the terminology within it, have been instrumental in the creation of the scorecard to report on community wellbeing. So far, over two dozen focus group discussions and four multi-day sessions have been conducted since Spring 2022 and more sessions are planned to finalize a disclosure strategy and long-term governance plan around the scorecard.

Findings and outcomes

• Impact accounting has afforded the EDC a “power language” to translate, in monetary terms, salient priorities of workers, residents, and stakeholders to businesses.
• Fresno EDC found that applying impact accounting helped local businesses attract mission-aligned investors. For example, EDC’s client Sierra Agra USA, an early-stage sustainable juice company in Fowler, CA, was one of the first adopters of the scorecard and has successfully secured over $1.1M in private impact investment tied to the scorecard to launch their 80,000-square-foot juice production facility.
• Fresno EDC is currently exploring opportunities to adjust tax rates or other public incentives based on annual company performance either strictly through impact accounting or the scorecard.
• The project has helped spread awareness of how companies can increase their impact by investing in areas with higher unemployment and contextualized wage quality and benefits for all stakeholders.
• Fresno EDC has also provided education and internship opportunities to students at Fresno State’s Craig School of Business to study and practice impact accounting with local organizations.

Future work

• While Fresno EDC’s current application of impact accounting is based on the methodology developed at the Impact-Weighted Accounts Project, future work will incorporate the IFVI methodologies as they are approved by the Valuation Technical and Practitioner Committee. 
• Fresno EDC will continue to support local organizations as well as engage with national stakeholders, such as Lunum and its regional New Markets Tax Credit provider, to test and expand the use of impact accounting. These are several use cases yet the core or focus will continue to be on capital attraction for impact in addition to increased accountability with public incentives.
• Fresno EDC is currently advocating for the use of impact accounting to enhance applications for government grants.
• Fresno EDC is expanding the scope and use of its scorecard and conducting additional dignified public outreach and engagement (a more inclusive process for inviting and listening to Fresno residents and stakeholders) to refine the scorecard and assist a new generation of economic planning leaders from underrepresented communities.
• Fresno EDC is actively engaging private equity firms that utilize public sources of funds (e.g. SBA Small Business Investment Corporations) and focus on place-based investing. With Fresno EDC’s support, local firms are exploring ways to leverage the scorecard while conducting due diligence, benchmarking performance, evaluating ongoing outcomes, and directing client services to improve company performance.