When most people speak of place-based efforts to alleviate poverty, their definition is the same one used for the last half century—ever since the Ford Foundation undertook its 1964 Gray Areas Project and the federal government launched its corresponding Community Action Program. They envision a multi-year initiative focused on a small, distressed neighborhood. Sometimes the area is expanded to encompass a contiguous set of neighborhoods or even a municipality; but there is always a well-defined, contained target area. A comprehensive array of programs—such as affordable housing, social services, small business assistance, educational reform, and job training—is targeted to improve socio-economic indicators.

There have been some standout examples of successful place-based initiatives, such as the Dudley Street Neighborhood Initiative, which transformed 1,300 abandoned land parcels in the Roxbury neighborhood of Boston into more than 400 homes, schools, and businesses, and the celebrated Harlem Children’s Zone in New York City, which serves 70 percent of youth living in its target areas and gets 95 percent of them into college. But most initiatives have left funders and community leaders alike struggling to claim victory.

The consensus among most of those involved has been that place-based initiatives can never approach the bold goal that motivated their emergence in the first place: the reduction of spatially concentrated poverty in our society. The grandeur of their ambitions far outstretched most funders’ resources and capacities, forcing them to focus on a limited number of communities. Even when focused on a few contained sites, funders chronically underestimated initiative costs, and grantees have been reticent to say so. And funders have struggled to reproduce successful initiatives in other localities.

But that pessimistic view may be changing. A yearlong inquiry undertaken by the USC Center on Philanthropy and Public Policy and the Sol Price Center for Social Innovation suggests that place-based initiatives may be just coming of age and on the verge of greater success. This more optimistic outlook is shared by the investigations and dialogues sponsored by other institutions like the Aspen Institute, Brookings Institution, and Urban Institute, all of which suggest something new is afoot.

What has prompted a renewed sense of urgency and optimism about place-based initiatives? The urgency is easy to explain. Events over the last decade have dramatically increased both the number of Americans living in poverty, and the spread of poverty across a wider part of our metropolitan areas. The mortgage crisis of 2008 and the prolonged recessionary economy that followed created deep poverty pockets in those same suburban and exurban communities that had drained economic vibrancy from cities to begin with. And reports released by the Brookings Institutions illustrate the extent to which concentrated poverty—long associated with inner city ghettos—is now also found in suburban municipalities and unincorporated areas of metropolitan counties.

The reason for greater optimism is that the field of place-based initiatives has accrued a critical mass of experience to generate informed, self-reflective insights. The first, most intellectually liberating insight is that low-income areas are not all the same. Early initiatives treated poor neighborhoods as relatively homogenous, drawing on the experience of inner city slums and assuming that strategies that worked in slums could achieve comparable results in all poor communities. Today, the field has formulated nuanced typologies to describe neighborhoods at distinct stages of socioeconomic development, cultural assimilation, and civic capacity. A neighborhood’s type determines the outcomes that can realistically be achieved, the timelines for achieving them, the resources required, and which sector should take the lead.

A second important insight is that communities perform different functions. For example, many early initiatives were premised on the idea that low-income areas were home to a permanent resident base determined to upgrade local amenities. As place-based initiatives began to focus on immigrant enclaves, it became evident that neighborhoods can serve as a platform where new arrivals gain their bearings before moving up and out. The purpose of some initiatives, then, is ensuring that the areas serve as a first rung on the economic ladder and making it easier for individuals and families to move up and out.

If we accept that there will always be some poverty in our society, then the challenge is not to transform every neighborhood into a middle class ideal. What’s important is that neighborhoods play a role in helping the people who live there access opportunities. Success is not necessarily about achieving arbitrary levels of income or home ownership, but rather ensuring opportunity through mixed income development or links to the regional economy. Harvard University economist Raj Chetty has developed an “opportunity index” that measures a community’s ability to afford opportunities to its residents.

Read more at Stanford Social Innovation Review