2020 Lane Reports

As COVID-19 spreads, Chicago's economic sectors converge

Wednesday, July 1, 2020 10:00 am
by Marc J. Lane

crains chicago

Government is expanding its function beyond funding the programs it supports and tightening or loosening regulations. Increasingly, it’s stepping up as an innovative and disruptive agent of change.
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For generations the nation’s economic sectors were siloed. Public charities pursued their mission-driven programs on their own, funded almost exclusively by philanthropy and government. The sole purpose of business, as Nobel laureate Milton Friedman famously put it, was “... to increase its profits so long as it stays within the rules of the game.” And government’s regulatory and tax-and-spend decisions traditionally reflected the ideology of the policymakers whose political party was in power.

But in the age of COVID-19, the lines that have separated Chicago’s economic sectors are blurring as their interests are more aligned than ever.

While charities face tough competition for too few philanthropic dollars, government support has been unreliable since fiscal challenges have forced austerity measures. No wonder so many charities, in recent years, have launched mission-driven businesses to generate earned revenue.

Such nonprofit social enterprises and for-profit social-purpose businesses are growing in number and impact. Chicago’s charitable and educational low-profit limited liability companies (L3Cs), for instance, place mission above profits and can attract foundation funding, whether they’re owned by nonprofits, for-profits or socially conscious individuals. And the city’s benefit corporations are committed to higher levels of purpose, transparency, and accountability to their stakeholders.

As today’s crisis unfolds, Chicago’s leading social enterprises are playing a pivotal role in ameliorating its impact. A Safe Haven is one example among many. The iconic network of for-profits and nonprofits has expanded its West Side facility to open a 100-bed isolated shelter for COVID-19 patients experiencing homelessness.

Common Threads is another. The nonprofit that promotes healthy cooking has teamed up with Top Box Foods, a nonprofit that seeks to make healthy food accessible to all, supermarket chain Mariano’s and local restaurateurs to deliver nutritious meals to Chicago residents who are facing food insecurity in the wake of COVID-19.

As charities are becoming more self-reliant, traditional businesses, both large and small, have demonstrated their selfless commitment to the community by helping those Chicagoans at greatest risk. So, for instance, while Airbnb, the online marketplace for arranging lodging,  has worked through its hotel partners to house those fleeing domestic violence where they can safely shelter in place, Meliora Cleaning Products has joined forces with local distillery FEW Spirits to create hand sanitizers for people who are fighting the pandemic on the front lines.

For its part, government is expanding its function beyond funding the programs it supports and tightening or loosening regulations. Increasingly, it’s stepping up as an innovative and disruptive agent of change – as a convener, a collaborator and a catalyst. While Governor J. B. Pritzker was airlifting surgical masks from China, Mayor Lori Lightfoot was awarding grants to fragile microbusinesses, giving coronavirus benefits to undocumented aliens, and collaborating with mortgage lenders and landlords to provide financial relief to beleaguered building owners and tenants.

The thought leadership of visionaries in every economic sector is being leveraged to drive positive social change in ways never before imagined. Their cross-sector collaboration is the key to sustainable solutions to the problems we face as human beings, indeed the key to our survival.


Marc J. Lane is a Chicago attorney and financial adviser and vice chair of the Cook County Commission on Social Innovation.

Reprinted from Marc Lane's May 4, 2020 editorial which appeared in Crain's Chicago Business. Crain Communication Inc.'s permission is gratefully acknowledged. Copyright © 2020 by Crain’s Communications Inc.


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