A 21st Century Vision For Community Development

Today's economic crisis is devastating neighborhoods and households across the country. Urban, low-income communities that were slowly recovering from the disinvestment of earlier decades are now falling back to where they were in the 1970s. Rural communities, walloped by the collapse of key economic generators, have suffered no less. Families that had begun to break the cycle of poverty and build small amounts of savings are now being plunged back into debt. Yet, at a time when the work of community development corporations is more needed than ever, there are growing questions about their long-term viability and efficacy.

Across the country, community development corporations (CDCs) have responded aggressively and effectively to the challenges of the current economic crisis. But at the same time, funders, investors, scholars, policy makers and many practitioners are asking if the CDC model still works. Can CDCs help this country recover? Do we need a different organizational model or models to achieve our goals in the coming years? Such questions are scary and threatening to many of us, particularly at a time when CDCs (like everyone else) are struggling. But community developers and their supporters need to take this opportunity to seriously examine the challenges, to listen to the critics, to take a hard look in the mirror, and to articulate a vision and a strategy for the future, rather than reflexively defend our past models and practices. To remain effective, CDCs and their funders, investors and partners must be willing to change. If they are, CDCs will play a critical role in helping our country recover from today’s economic challenges so that all of our communities and residents participate in that recovery.

Ground Rules For Change

As we figure out what form this “change” will take, we need to engage in an ongoing dialogue — one that’s ostensibly already begun. Unfortunately, the conversation that examines the future of CDCs that has unfolded across the country so far has been plagued by confusing rhetoric, varying priorities, multiple agendas, unproductive turf battles, and a quest for a one-sized-fits-all solution for the entire country. We must get past these obstacles and have a thoughtful conversation about the future of the field. For the past two years, the Massachusetts Community Development Innovation Forum, a project jointly sponsored by MACDC and the Boston office of the Local Initiatives Support Corporation and supported by a broad cross section of people and organizations in the community development field, has launched a deep examination on the future of the field. From this experience, which continues to unfold, there are five critical ground rules that should guide any discussion: Identify shared values. Talk about the shared, core values rooted in social, racial, and economic justice committed to both community and individual empowerment. Be results-oriented. Performance is critical — and it must be measured and rewarded. “Performance” includes the production of homes, jobs, and businesses, but it should also include community leader development, the creation of healthy neighborhoods and linkages across sectors and programs, as well as the cultivation of strong community and civic life. Some of these outcomes are harder to measure, but they are no less important. Acknowledge the past. We’re preparing for change, and it’s essential to recognize and honor the achievements of CDCs and their partners over the past 40 years. In Massachusetts, for example, this is done annually with the publication of the Growing Opportunities Assets and Leaders (GOALs) that reports the success of MACDC members. While the CDC model needs to be revisited and constantly updated for changing times, it has been remarkably effective, durable, and flexible, working across diverse communities and economic climates. Be flexible: While we should not ignore lessons learned over the past 40 years, we also must not be trapped by old orthodoxies, ideologies, and habits that no longer make sense. CDCs, intermediaries, CDC associations, foundations, policy makers — all of us should be subject to review, critique and reform. Coming to “terms.” Perhaps the term that creates the most confusion is the one at the center of this conversation: “community development corporation.” After 16 years working for a CDC association, I like to joke that I still don’t know what a CDC is. But it is no joke. None of us really knows. The extraordinary diversity that exists among CDCs (and the communities they serve) makes it hard to craft a meaningful definition, making it challenging to appeal to funders and policy makers, to develop consistent metrics and standards, and so on. Discussions about the future of CDCs and the role that CDCs should play are therefore confusing. Are there too many of them or not enough? Are they too small to be effective or too big to be genuinely accountable and rooted in local neighborhoods? Are they too focused on bricks and mortar or not sufficiently capitalized and staffed to be effective real estate developers? Are they trying to do too many things at once or are they not comprehensive enough? The questions can go on and on and there are at least a few CDCs that can be highlighted to underscore any criticism or viewpoint. At best, the lack of shared understanding makes it hard to have a coherent discussion. At worst, this confusion could take the movement in the wrong direction.

Participants in the Massachusetts Community Development Innovation Forum vigorously debated whether it was helpful to establish a common definition of the term CDC and if so, what that definition should be. Compelling arguments were made that any definition would be both too broad and too narrow and it was not really important to distinguish CDCs from other nonprofits so long as the work was getting done. Others argued it was necessary to define the field in order to attract resources, credibility and to develop infrastructure, standards and metrics to enhance performance. The idea is that knowing which organizations qualify as a CDC will help strengthen the field in much the same way that the Federal CDFI program has led to a major expansion of CDFIs in this country. In the end, we agreed to file new legislation designed to update a 1977 statute that had created a standard definition of the term that was now largely ignored. The bill would create a more flexible definition that reflects the diversity of the field and would require the state to formally certify CDCs. Such a program could enhance the field’s credibility, attract resources, and expand impact. Our proposed definition addresses both who governs the organization and what the organization does. Specifically, to be a CDC, the bill states that:

The organization must be governed by the constituency it serves. This means that their board of directors must be representative of their community, in terms of geography, income and ethnicity. Further, the organization must be authentically rooted in the community and provide local residents with genuine decision making roles.A primary purpose of the organization must be to engage local residents and businesses to work together to undertake community development programs, projects and activities that develop and improve urban, rural and suburban communities in sustainable ways that create and expand economic opportunities for low and moderate income people.

So where do we go from here? How can policy makers, funders, and practitioners contribute to a strong, effective and durable community development movement for the 21st century? Here are eight ideas for what we need to do.


  1. From the standpoint of the CDC system here in Indianapolis, I could not agree more with these recommendations. If I would add to them, it would be in the area of infrastructure and a community development system. When it comes to infrastructure and to systems, we cannot only focus on the CDC side of the equation. Funders, public, corporate and philanthropic must engage in a higher level of coordination, so that our resources have greater synergy and effectiveness. Funders should be working closely together to insure that the investments being made our complimentary and support development by CDCs in the field in a comprehensive way. Funder policies and strategies should be coordinated, which means funders must talk to each other as well as to CDCs in the field. If we create greater efficiency in the deployment and allocation of capital to the field, this will lower costs, create more collaboration and attract additional resources from other sectors to take redevelopment in neighborhoods to the next level.


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