Close-up black and white photo of binoculars.

Community Development Field

A View from the Other Side of the Funding Proposal

During my time on a CDC's board, my expectations and assumptions have been challenged. This change in perspective and experience has offered me some interesting observations and lessons.

Christopher Liang via flickr, CC BY 2.0.

Close-up black and white photo of binoculars.

Christopher Liang via flickr, CC BY 2.0.

After spending most of my career in housing finance, nearly two years ago I joined the board of Homes on the Hill (HOTH), a community development corporation (CDC) serving west Columbus and southwestern Franklin County, Ohio. HOTH develops rental and ownership housing, provides housing counseling, and seeks opportunities to socially and economically improve the neighborhoods it serves.

I did this because I wanted to share my experience and time with an organization close to home. During my time on the board, my expectations and assumptions have been challenged by the up-close view to the circumstances of a CDC. This change in perspective and experience has offered me some interesting observations and lessons.

One of the first is that a housing development project is often called a “deal,” a term that understates its complexity (as well as suggests something a bit unseemly). “Deals” are no longer abstract when you’re the owner, as they can be from the funder side. The uncertainty of waiting for funding, delays, and the give and take with partners demonstrate how difficult it is to develop real estate. Funders usually do not see this time-consuming and stressful side of development, as the project is often only seen on paper, which can diminish the significant work investment and importance of the development for that particular community.

During the process of working through a funding or compliance issue on a big (or small) project, occasionally a developer would indicate that a deal was necessary for the future survival of his or her organization. From the perspective of a housing finance agency staffer with an organization that has multiple streams of funding and reserves, that reality can be hard to imagine. One deal? Nonetheless, a single deal can make a difference. It is not simply the financial implications of that one deal (which are not unimportant), it is that an organization’s future success is built on current success, which funders and investors want to see. Neighborhood and community leaders may be making an investment of goodwill in a project such that future projects won’t be well received if the current project fails. In some neighborhoods, that one deal is the catalyst to a wave of positive change and development.

Just as important, a successful project can help meet other critical needs. What is not always apparent from a funder perspective is that there are needs to meet that have no obvious source of funding. Government is very good at funding “bricks and sticks,” but not services. A CDC’s victories are celebrated, even if they are small, and resources are limited, so the implications of decisions are different. One mistake can make the difference in the survival of a small nonprofit, and I suspect many for-profit organizations.

Public organizations do not generally face the same constraints. The risks in the public sector are more likely often risks being taken by other organizations that the public agency is supporting through grants, loans, or other assistance. One critical realization for me was that funding a successful CDC relies on fundraising from multiple sources, often in amounts that may seem small. Though these resources are helpful, it does take staff time to put together requests for each one, no matter how small. In general, fundraising is a more present reality than I fully realized. When working for a public funder, one can become insulated from the need to worry about how the bills will be paid.

Finally, a CDC focused on housing cannot avoid the fallout from changes in the neighborhoods it serves. The effect of local business closures or increases in crime reverberates throughout a neighborhood, making the work of stabilizing and improving more difficult. It is easy for a funder with a single purpose, say housing, to miss those challenges.

With each new proposal, I am finding that perspective changes.

Special thanks are owed to Melissa Miller of the Ohio CDC Association who provided feedback on an earlier draft of this article.

Related Articles

  • Aerial view of the capital city of Montpelier, Vermont. Leaves in bright fall colors, and three church spires among the small-city houses and building of brick and clapboard.

    States Are Using This Tool to Keep LIHTC Housing Affordable for Longer

    September 13, 2024

    Some state finance agencies are using qualified allocation plans, or QAPs, to extend affordability of LIHTC housing beyond 30 years and increase tenant protections. Here's a look at where it's happening.

  • View from an upper floor of a small-city street, with two- and three-story brick buildings lining the street, and cars parked on the curb. A brick chimney at the back of the buildings is set against a bright blue sky.

    Standing Up for Small CDCs

    August 28, 2024

    Neighborhood-scale community development organizations have community connections and trust that can’t be replicated by larger organizations, and they should be valued as the foundation of the field.

  • Affordable Housers Face Deepening Rental Arrears and Ballooning Expenses

    August 2, 2024

    Four years after the pandemic first wrought havoc on the American economy, nonprofit housers are being overwhelmed by rental arrears. Can they balance their social mission against their operational realities?