Description and History

Anchor Institution Procurement centers on the role of major institutions—large place-based public and nonprofit organizations like universities, hospitals, and government entities—can help shape more democratic local economies by directing their purchasing power toward local, inclusive, and democratic enterprises such as  cooperatives. These organizations have deep ties to their communities and can influence local market dynamics due to their stable, ongoing demand for goods and services. Through strategic procurement practices, anchor institutions can prioritize local and minority-owned businesses, cooperatives, and nonprofits, fostering job creation, wealth-building, equity, and, importantly, economic democracy.

The concept of anchor institution-led procurement builds upon the idea that by spending intentionally, institutions can mitigate some of the disparities caused by traditional market forces, which often exclude smaller or underrepresented enterprises. In cities like Cleveland, Baltimore, and Springfield, initiatives such as the Evergreen Cooperatives have exemplified how anchor institution procurement can support a more democratic economy by generating economic opportunities where they are needed most and supporting the development of new forms of enterprise that democratize the ownership of enterprise.

Anchor Institution Procurement and the Community Wealth Building Wedge

When an anchor institution commits to purchasing from local businesses or worker-owned cooperatives, it directly supports the development of sustainable enterprises that can grow and thrive without needing to compete against larger, often large corporate  suppliers. This model helps reduce barriers for small, local, or minority-owned businesses by creating stable, predictable demand through long-term contracts. The result is often a more resilient, diverse local economy where a multiplicity of business forms can grow and flourish.

By leveraging procurement dollars to re- localize supply chains and encourage the development and growth of diverse enterprise forms, anchor institutions not only promote economic stability but also help reduce wealth disparities and support a just use of land and property. Through targeted procurement, these institutions can enhance workforce standards, ensuring living wages, inclusive hiring practices, and environmentally responsible operations. This is particularly impactful for areas that have historically faced underinvestment, creating pathways to economic mobility and business ownership for residents.

Examples

1. Fifth Season Cooperative and Gundersen Lutheran (Wisconsin): The Fifth Season Cooperative, a multi-stakeholder cooperative in Wisconsin, collaborates with Gundersen Lutheran Health System to supply locally sourced food. This partnership demonstrates how anchor institutions can leverage their purchasing power to support cooperatives and strengthen regional food systems. By prioritizing local farmers, food processors, and distributors, Gundersen Lutheran helps build community wealth, fosters economic stability, and promotes a sustainable, locally anchored economy.

2. Kaiser Permanente's Local Food Initiative: Kaiser Permanente has implemented a procurement policy that prioritizes locally grown and produced food, creating demand for regional farmers and food businesses. This initiative not only benefits local agriculture but also promotes healthier, sustainable food systems across the regions Kaiser serves.

Resources

• PowerSwitch Action: Advocates for economic justice and sustainable development through policies that empower local communities and enhance anchor institution accountability.

• American Sustainable Business Network: Coalition that promotes equitable and sustainable business practices, including progressive procurement and inclusive supply chains.