The designation of Opportunity Zones is expected to spark investments in low-income communities and support more inclusive economic development. As 40 years of unequal economic growth demonstrate, achieving this goal is far from a foregone conclusion. Expanding the ability of employees to have an ownership stake in the firms where they work – through structures such as employee stock ownership plans – is a demonstrated way to create quality jobs and increase employee wealth, and these outcomes are clearly consistent with the intent of the Opportunity Zone program.
On October 9, the Aspen Institute Economic Opportunities Program, together with the Rockefeller Foundation, brought together a set of experts and individuals leading work in states and communities to discuss ways in which Opportunity Fund investments could finance ESOP conversion opportunities, and develop ideas to include employee share ownership within an Opportunity Zone’s inclusive economic development strategy in general.
Based on the day’s discussion, the Economic Opportunities Program drafted a memo on how employee share ownership could contribute to the expansion of economic opportunity within Qualified Opportunity Zones and summarizes key issues regarding how to align the mechanics of investing in ESOP conversions with the regulatory framework governing Opportunity Fund investments.
This report is another step in an ongoing conversation about Opportunity Zones and ESOPs, which included a webinar we hosted in late November.
We are eager to continue these discussions and to educate community leaders in Opportunity Zones and investors about the potential to broaden asset ownership and to advance the ideas of business ownership and quality jobs in communities of need.
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