Diversified funding is a strategy of developing a patchwork of revenue streams from a variety of sources to operate like an ecosystem, leveraging community strengths to increase security and financial viability in city governments. It is a key element of a resilient, flexible and sustainable municipal financial strategy.
How Does Diversified Funding Relate to Public Health?
While many discussions of public health limit their scope to clinical outcomes, the factors that impact overall community health outcomes extend far beyond the medical space. Many elements of a city’s structure and governance contribute to the overall wellbeing of residents, including municipal finance strategy. From increasing access to healthy produce to requiring environmental impact assessments for new homes, thoughtful funding practices are key in improving health and wellbeing outcomes for your city.
A city exercising practices to diversify funding sources will have the ability to address ongoing public health concerns, as well as prepare for potential future emergencies. Strengthening your funding practices will free your city up to create programs which address the social determinants of health from all angles and improve overall community health. This will enable the city’s public health resources to be not just responsive, but preventative and additive.
3 Ways You Can Use Diversified Funding to Improve Health and Wellbeing in Your City
1. Build Sustainability and Resilience
A diverse portfolio of funding sources allows for city governments to move with confidence in program and strategy development. Without the need to rely on singular sources of funding, cities can build a more resilient financial foundation. This foundation can act as protection against unpredictable changes in the economy and ultimately mitigate the impact of revenue loss or funding shifts within individual sources of funding.
For example, a city practicing a braided funding strategy with funds from federal grants, property and state taxes, social impact bonds and philanthropic funding will be able to lean on the other two sources of funding should one of them become unavailable. This ability to shift reliance from one source to another allows for confidence in the ongoing operation of necessary programs in areas such as childcare or workforce development which contribute to the overall success of the local economy.
2. Enhance Flexibility
A diverse array of funding sources allows city governments to shift priorities to match the pressing public health needs of the moment. Promoting health and wellbeing through city government action requires simultaneous commitments to consistency and flexibility. While it may feel like these priorities conflict, cities can achieve both with the help of a diversified funding strategy.
Diversified funding enables municipal government to distinguish certain funds for ongoing programs addressing current issues, such as regular air quality monitoring, while reserving others for more rapid responses to unexpected challenges, like an outbreak of a contagious illness in the community.
3. Increase Capacity for Innovation
With a strong foundation of diverse funding sources, cities can move beyond funding silos and restrictions to invest in new, innovative solutions. Once a strong financial foundation is built, a city government can spend more time and energy focusing on more creative and idealistic solutions to community challenges. Confidence in your foundation can enable you to take certain risks that may not otherwise be possible without the knowledge that the fundamental financial resources for the city are taken care of.
In some circumstances, this ability to innovate and take risks in program and policy development has the potential to yield more funding opportunities for the city. Outcomes from a successful program promoting outdoor activity among residents funded by a philanthropic grant could be leveraged as part of a separate proposal for funds for the installation of a new park, or additional bike lane infrastructure.
Diversified Funding for Health, Equity, and Wellbeing Workshop
The process of developing an increased and diversified landscape of funds in city government is unique to each individual city. If you’re interested in learning more, register for the Diversified Funding Workshop on April 9. The Cities of Opportunity initiative’s Capacities for Action workshop series is designed to support city staff and officials as they work to develop and improve the systems which support health, equity and wellbeing.
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