In 2019

, the Sorenson Impact Center partnered with Forbes to host the Forbes OZ 20, a national campaign highlighting impact-focused leaders in the Opportunity Zone space. Two and a half years later, as the OZ space matured, we followed up with the four lead winners to see where they are now and what insights they’ve gained. This article is the fourth in the series of four case studies that outlines key lessons and strategies for success. Watch our contributor page for updates.

If you’re an Alabama resident noticing economic growth in your area, you may have the team at Opportunity Alabama to thank. Opportunity Alabama (OPAL), a nonprofit that connects investors to investable assets in low-income and underrepresented communities, has spent the last few years traveling the state to educate stakeholders and facilitate deals in Opportunity Zone (OZ) investing. So far, their efforts have contributed to the closing of well over $350 million in economic development deals – a transformative amount for a state with consistently low rankings on prosperity indices and one of the highest poverty rates in the nation. Their work has earned them credibility and a unique perspective on where the greatest challenges and opportunities lie in Alabama’s rural and underserved urban communities. In the time since OPAL was recognized as a Forbes OZ 20 Grand Prize Winner, they have launched their own investment fund and expanded beyond the OZ space to consult on higher education, federal policy, and other efforts driving community-aligned impact.

Shifting Strategies for Direct Impact

Alex Flachsbart, OPAL Founder and CEO, recently led his organization through a strategic evolution catalyzed by the desire to create deeper impact. The organization shifted its focus from socializing OZ deals among investors and communities to acquiring funds to invest directly in their own projects. “We need[ed] our own capital vehicle if we [were] going to realize the impact that we want to have over the next decade-plus in the state,” Flachsbart explained. OPAL launched their first fund at the end of 2020, which raised just under $19 million to address critical real estate development projects in Alabama. These projects are intentionally designed to create more equitable wealth-building opportunities for Alabamians, especially groups that have been historically left out of investing and economic development.

OPAL crafts a unique impact measurement plan for every project to ensure community benefit in the process, not just the outcome. In one example, OPAL supported the Market Lofts on Third building renovation, which created more than 100 units of needed workforce housing in downtown Birmingham. The project employed an outsized percentage of traditionally underrepresented populations in the process, including a woman-owned general contractor and interns from a local HBCU. Establishing partnerships with diverse investors, business owners, artists, and other local stakeholders is the key element of OPAL’s impact thesis, and it’s how they’ve earned a strong ecosystem of trusted partners. “Because of the network we have, we’re in a very unique position … We know the local economic developer, the local mayor, the local nonprofit organization …The first thing we ask is, ‘Do you want to see this happen in your backyard?’ If the answer is yes, we keep going,” said Flachsbart.

Providing Space for Community-led Growth

As OPAL evolved, they identified a gap in Alabama’s investment and impact environment: essential development work across the state was going unfunded because community members were largely excluded from technical and financial resources. Flachsbart carried this dilemma to the Sorenson Impact Center’s 2020 annual impact summit. Out of discussions with fellow leaders in attendance, the idea for the Community Growth Accelerator was born. This program, which has run in 20 counties so far, supports local community leaders in developing consistent project pipelines in rural and underserved urban areas of Alabama. Program cohorts are guided through a free 12-week pre-development program where they can connect with OPAL’s partner network and receive training on designing winning projects, attracting investment, and executing their vision.

The Accelerator program is generating tangible results. In the town of Livingston, a participating team identified the need for a properly functioning grocery store, put together a project plan, and obtained financing from a Community Development Financial Institution that enabled them to increase local food brand awareness and establish an effective store inventory management system. Despite the program’s outsized success, OPAL has been intentionally tight-lipped about the Accelerator until recently. Said Flachsbart, “So many times you deal with rural communities and it’s overpromising and under-delivering … We wanted to be sure that we could deliver on whatever kind of technical assistance we say we’re going to deliver before broadcasting and advertising it to the world. We’re finally there.”

Looking Ahead

While OPAL’s work often extends outside OZs, their mission remains to recast Alabama as an epicenter for OZ-driven investment. “We started with Opportunity Zones, we wouldn’t exist without Opportunity Zones, and it’s still so much of the fuel that drives the engine of Opportunity Alabama,” stated Flachsbart. The first OPAL fund is currently being distributed to economic development projects across the state, and the Community Growth Accelerator has proved an effective addition to their toolbox of transformative community resources. The nonprofit’s impact on Alabama to date has been prominent enough that the state emerged as a positive outlier in one of the few academic studies conducted on OZs.

The OPAL team looks forward to spotlighting their community impact this summer: Alabama is hosting the 2022 World Games, an international sports competition affiliated with the International Olympic Committee, which will bring tens of thousands to Birmingham this July. Lindsay Edwards, OPAL’s Chief Investment Officer, noted the team’s anticipation of this unique opportunity: “We’re thinking about this as an opportunity to show the world what innovative impact can look like in the state of Alabama.” With any luck, increased exposure from the event and the continued efforts of OPAL and others like them will drive further capital into the parts of the state where it is needed most.