Infrastructure in Action: Bolstering Nonprofit Community DevelopersRick Cohen How does the nonprofit infrastructure work in practice? At the national level, it’s difficult to see, but a slice of the nonprofit sector—the more than 4,000 urban and rural community development corporations (CDCs) that develop housing and economic development strategies—demonstrates some infrastructural components in operation. Few inside the community development sector would suggest that the infrastructure that supports CDCs is across-the-board healthy. There are tensions, fissures, and gaps in the fabric of supports, and CDCs and funders alike suggest the need to repair them. But to some extent, community development provides persuasive evidence of what infrastructure organizations can accomplish in terms of supporting nonprofit rural and urban community developers and in their recent efforts to aggressively combat the problem of subprime mortgage foreclosures. Based on some two dozen interviews with leaders in the sector, this article explores the function and development of the community development infrastructure. The Community Development Infrastructure and What It Does While some components of the community development infrastructure have obvious counterparts in serving the nonprofit sector overall, some are either specific to community development or more developed. We describe them below. Community development financial intermediaries. The dominant infrastructure element of nonprofit community development is the array of national community development intermediary organizations that combine training and technical assistance with regranting and project financing functions. Those in the sector can quickly name the Local Initiatives Support Corporation (LISC), Enterprise Community Partners, and NeighborWorks America. These institutions are large and well capitalized.1 LISC and Enterprise bundle multiple program activities to assist thousands of nonprofit community developers between them: predevelopment lending, bridge lending, project and operating support grantmaking, housing tax-credit syndication, the New Markets Tax Credit program, public-policy advocacy, and more. With a longtime focus on homeownership, NeighborWorks includes a secondary market, various financing programs, and a respected training program that provides nonprofits with training and capacity building on core nonprofit functions in addition to CDCs’ housing development roles. According to one observer, the intermediaries’ prime contribution to the sector has been technical assistance, enabling nonprofit community developers to access the national capital markets and deploy a mix of concessionary and market financing in some of the nation’s most intractable inner-city and rural markets. They help CDCs access market resources that these organizations could not access on their own. The large nationals are hardly the only intermediaries active in the field. There are smaller intermediaries, such as the Low Income Investment Fund,2 various regional and local community development financial institutions, assorted local and regional community loan funds, and housing partnerships. In addition, other intermediaries serving defined community development populations have developed financing and technical assistance functions, notably the National Council of La Raza,3 which offers Latino development organizations networking, financing, and policy advocacy, and the Housing Assistance Council,4 which provides crucial development financing, technical assistance, and networking activities for CDCs that serve rural America. National CDC networks. In the summer of 2006, the community development sector lost its longtime national trade association. After 35 years in existence, the National Congress for Community Economic Development (NCCED) thanked its supporters for their loyalty and ceased “official operations.”5 Within community development, NCCED’s demise was greeted with near silence. Many were aware that their trade association had been weakened by political infighting and racial and ethnic divisions. Even before NCCED’s collapse, networks of CDCs functioning as trade associations had begun to spin off. Two spinoffs reflect the belief that NCCED had failed to meet constituents’ needs: the National Coalition for Asian Pacific American Community Development (National CAPACD) and the National Association of Latino Community Asset Builders (NALCAB). Both National CAPACD and NALCAB focus on racial and ethnic subsets of the community development world; but with the absence of NCCED, no organization provides definition and vision for the sector as a whole. In response, several of the state CDC association members of NCCED launched the National Alliance of Community Economic Development Associations (NACEDA).6 With 24 state and metropolitan CDC associations as its current membership, NACEDA has absorbed some of NCCED’s policy advocacy and information management functions. As a coalition of largely state CDC associations, NACEDA’s function for community developers is similar to that of the National Council of Nonprofit Associations vis-à-vis state nonprofit associations: it undergirds the national structure by drawing on the grassroots strength of state associations. Technical assistance and training providers. If there is consensus among observers, it is that the training programs of the Neighborhood Reinvestment Corporation’s Training Institute constitute a high-quality asset for the development of the field (national intermediaries and the various state CDC associations provide additional training). National intermediaries’ aggregation and delivery of technical assistance and training is also distinctive. Though less true recently, at one time the programs of the Baltimore-based Development Training Institute (DTI),7 constituted a Good Housekeeping–like Seal of Approval, convincing reluctant investors and government agencies that program graduates had the technical financial and management skills to warrant investment in the DTI alumni-run CDCs. Community development funders. For some years, the Council for Community-Based Development (CCBD) aimed to promote foundation grantmaking for community development. A 1989 CCBD report counted 196 foundations making grants specifically for community development that totaled $68 million.8 The Foundation Center counts grantmaking for “community improvement and development,” generating a much larger dollar amount for this sector’s foundation grantmaking, though it’s hardly focused on nonprofit community-based developers (including community development grants to non-U.S. organizations and to community improvement organizations that are not CDCs). As the Foundation Center numbers indicate, grantmaking by the dominant foundations for community improvement and development has decreased not only as a proportion of total grantmaking but also in absolute numbers. In 2004 the top foundations devoted 4.4 percent of their grant dollars, or $684 million, to community improvement and development. In 2005 that number fell to 3.5 percent, or $567 million. And by 2006, reflecting the foundation sector’s huge growth in grantmaking, the grants of top foundations for community improvement and development rose to $700 million, but that still represents only 3.7 percent of total grant dollars (a decline since 1999, when it was 5.1 percent). With the recent financial meltdown and the elimination of grantmaking from Fannie Mae and several banks, post-2006 grant totals will likely plummet. While interviewees noted the importance of philanthropic funders as a component of the infrastructure, they didn’t view funders as an organized component. Foundation and nonfoundation respondents alike did not typically define the Neighborhood Funders Group, one of the nation’s preeminent foundation affinity groups, as a community development–oriented entity. Now known as Living Cities, the National Community Development Initiative is viewed as funders’ avatar in the community development infrastructure. In terms of total dollars, using foundation dollars to leverage private and government capital, Living Cities has by its own counting generated more than $540 million.9 Living Cities excludes CDCs outside its locations of operation: 23 cities and metropolitan areas served by LISC or Enterprise. Nonetheless the monies funneled through Living Cities constitute an unprecedented philanthropic commitment,10 leveraging private and government capital to the tune of 29 to 1. Government. Most “maps” of the nonprofit infrastructure omit the Internal Revenue Service’s Tax Exempt & Governmental Entities, state attorneys general, and the multiple sources of government grantmaking to nonprofits. But without government funding, community development would effectively be crippled. As one interviewee puts it, “So much of the community development infrastructure depends on support from a federal government grant flow.” Living Cities serves as an example of the significant role of government in the community development infrastructure. A significant piece of its funding has been through Department of Housing and Urban Development (HUD) appropriations, including $56 million prior to FY2004 and infusions in subsequent years.11 Despite successful lobbying for capacity-building appropriations, HUD discretionary funding for community development has hardly been on the upswing. Community development is a sector that depends heavily on government subsidy. CDCs view (1) the Community Housing Development Organization portion of the HOME program, (2) their ability to connect with local governments to access CDBG funds, and (3) the direct funding application ability they have with the Office of Community Services program at the Department of Health and Human Services as crucial components of the community development infrastructure. At the state government level, state nonprofit associations have won impressive victories to maintain and increase state funding for community development activities, including bond appropriations, housing trust funds, and other state programs.12 Research and publications. Based at the National Housing Institute in New Jersey, the monthly Shelterforce magazine functions as the journal of record for community development.13 Interviewees also noted the research of the Urban Institute, the Joint Center for Housing Studies, and the work of the Metropolitan Policy Program at the Brookings Institution. Overall, however, respondents most frequently mentioned NCCED’s regular “census” of nonprofit community developers.14 With the help of LISC, NACEDA is attempting to conduct an updated, and perhaps more rigorous, CDC census. Assessing the Community Development Infrastructure In the wake of NCCED’s collapse, how important is the community development infrastructure? On one hand, “it takes time to feel the loss,” says on interviewee. On the other, however, NCCED’s downward spiral was a long time coming. Most observers suggest that several functioning infrastructure organizations have contributed to what one described as a “solidified” community development sector—but at the same time that gaps in the community development infrastructure have led to the collapse of several CDCs.15 According to one interviewee, without the infrastructure organizations’ functions, “community development could be worse.” With varying degrees of emphasis, all interviewees conveyed the importance of a functional community development infrastructure. Several elements of the distinction of the community development infrastructure stand out, none more markedly than the ability of national intermediaries to perform multiple roles.16 By contributing to the development and retention of programs such as the New Markets Tax Credit and the Low Income Housing Tax Credit, Enterprise and LISC have taken on NCCED’s role of national community development lobbying, which has made the erosion of NCCED less acutely felt. LISC and Enterprise have also generated a structure of field offices governed more or less by local philanthropic, government, and community leaders, serving as mechanisms to match intermediaries’ resources with the distinctive conditions of local settings. Nonetheless, in communities and regions outside national intermediaries’ geographic “footprints,” support for community development suffers. |