From Surplus to Social Good: How Smarter City Revenues Build Stronger Communities

People have all kinds of opinions about what makes a city feel alive. For me, it really hits when I compare places I’ve lived in or visited across the U.S. and Australia. That sense of civic dynamism - that spark - can absolutely be scaled across cities. The real challenge? Figuring out how to replicate it in different contexts, especially here.

The good news is that we’re not starting from scratch. One thing we’ve got in abundance is something that can’t be manufactured: cultural diversity. As a proudly multicultural society, that richness is already baked into who we are. And while deep pockets help, the other ingredients that make a city truly thrive - thoughtful design, a strong local economy, a shared sense of place - are within reach if we’re smart about how we go after them.

But to get there, we need to start thinking bigger. Local governments can’t just be in the business of cutting services when budgets get tight. They need to get creative - treat revenue generation not as a dirty word, but as a lever for transformation. Because when cities invest in access to essentials, back inclusive economic growth, and genuinely empower communities, they do more than manage - they become engines of resilience and vitality.

It’s not about doing more with less. It’s about doing better with what we have - and being brave enough to explore new models that unlock long-term community value. Councils shouldn’t be afraid to step outside the usual tax-and-spend framework. Whether it’s local ownership of essential services, impact investing, or reimagining how community funds are deployed, the opportunities are there.

Small Business, Big Stakes

Australia’s business landscape is dominated by SMEs. To put it in perspective: 97.3% of all businesses here are small (with under 20 employees), and another 2.5% are medium-sized. That’s about 2.5 million small businesses - and they’re the lifeblood of many local economies.

But here’s the hard truth: one in three new small businesses doesn’t make it past year one. Two out of four are gone by year two. And by year five? Three out of four have shut their doors.

So the question is: how can local councils not just generate more revenue - but ensure the benefits of local economies stick around and actually grow?

A Story from California (and Why It Matters Here)

Let me share something that’s stayed with me. A friend of mine, Matt Strabone, was elected City Treasurer in La Mesa, California - a city of about 60,000. When he ran, he promised something bold: that he’d make the city more money without raising taxes or cutting services.

And he delivered. In 2023, La Mesa earned over $2 million in returns—investing in things like government bonds and corporate securities that brought in an average of 5%. Not bad, especially when you consider that the job pays around $7,000 a year. That’s some serious ROI for the community.

But what I loved most was how Matt didn’t just sit on the good news. He reported quarterly to the council, broke down where the money came from, and explained why it mattered. It built trust. It showed transparency. And it proved that local governments can be more than just tax-and-spend machines—they can be strategic investors.

Then… I Heard About Norseman, WA

Around the same time, something completely different—but equally exciting—was unfolding on the other side of the world.

In Norseman, Western Australia, population around 775, the local council (Dundas Shire) bought the town’s IGA supermarket for $1.4 million. They created 25 jobs and turned a $250,000 profit in just their first month.

It worked so well that now they’re launching a real estate investment co-op—designed to keep ownership of key assets local and give community members a chance to invest in what matters to them.

Now, this was a small-town move - but the principles behind it? Universal. And they open up a powerful case for councils to think differently about economic development:

Why Council-Led Ownership and Investment Works

1. Economic Development -  Buying or backing small businesses can create local jobs, spark growth, and bring economic stability.

2. Local Money Stays Local - When profits from places like supermarkets stay in the community, they get reinvested, creating a positive cycle.

3. Community Empowerment - Local ownership builds pride, engagement, and resilience.

4. Access to Essentials - Councils can make sure everyone has access to healthy, affordable food—especially in food deserts or underserved areas.

5. Control Over Pricing and Quality - In a cost-of-living crisis, being able to influence the cost and quality of everyday items is a big deal.

6. Strategic Urban Planning- Councils can shape development - making sure there’s a mix of services and avoiding the kind of gentrification that pushes people out.

7. Social Cohesion -  Local supermarkets often double as gathering places. Councils can protect and even grow those spaces. One great example? Ainslie IGA in the ACT - still going strong after 60 years and celebrated as part of the community fabric.

   
   

Enter: Philanthropy

Now here’s where it gets even more interesting.

I've written before about reimagining what philanthropy can do - like using it to help nonprofits create products, not just deliver services; or buying up debt to boost generational wealth. But one area with massive untapped potential is place-based social impact investing.

What does that mean? It’s about investing capital - financial and otherwise - into projects that tackle local challenges head-on. Think of it as philanthropy that’s hyperlocal, laser-focused, and results-driven.

City councils are perfectly positioned to lead in this space. They can:

• Pump-prime investment by surfacing shovel-ready, impact-driven projects.

• Convene local actors - from businesses to nonprofits to resident groups - to co-design initiatives.

• Partner with philanthropy to scale what works.

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Done well, it boosts council credibility, attracts new investment, and - most importantly - makes life better for people on the ground.

A Blueprint for Forward-Thinking Cities

Philanthropy gives us a powerful model to borrow from: long-term thinking, risk tolerance, and a focus on impact over optics.

Imagine if every city carved out just a small slice of its annual budget - let’s call it an innovation fund - and used it to test ideas like Norseman’s IGA or La Mesa’s investment playbook (I’m not talking about discretionary councillor funds) we could proactively back local social enterprises or housing co-ops.

The bottom line? We have all the raw ingredients for civic dynamism. What we need is more leaders willing to mix them together in new and bold ways.