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What is a Community Development Corporation?

 

What is a Community Development Corporation?

Community development corporations (CDCs) are 501(c)(3) non-profit organizations that are created to support and revitalize communities, especially those that are impoverished or struggling. CDCs often deal with the development of affordable housing. They can also be involved in a wide range of community services that meet local needs such as education, job training, healthcare, commercial development, and other social programs. While CDCs may work closely with a representative from the local government, they are not a government entity. As non-profits, CDCs are tax-exempt and may receive funding from private and public sources.

 

A brief explanation of the community development field

 

The term “community development corporation” means a private, nonprofit corporation whose board of directors is comprised of business, civic and community leaders, and whose principal purpose includes the provision of low-income housing or community economic development projects that primarily benefit low-income 

 

The term “community development corporation” means a private, nonprofit corporation whose board of directors is comprised of business, civic and community leaders, and whose principal purpose includes the provision of low-income housing or community economic development projects that primarily benefit low-income .

 

What is a Community Development Corporation?

A brief explanation of the community development field

When I began my internship at NACEDA last month, I found it very hard to nail down a definition for community economic development. Often times classmates or professors would ask me where I was interning this semester, and I struggled to give them a brief explanation of the field. Thankfully, I found this article written by Kate Lau Schaffner of NewsWorks that concisely explains the history and scope of community economic development. 

What is a Community Development Corporation?

Community development corporations (CDCs) are 501(c)(3) non-profit organizations that are created to support and revitalize communities, especially those that are impoverished or struggling. CDCs often deal with the development of affordable housing. They can also be involved in a wide range of community services that meet local needs such as education, job training, healthcare, commercial development, and other social programs. While CDCs may work closely with a representative from the local government, they are not a government entity.

It's important to note that CDCs are self-identified. That is, there is no specific tax ID or certification that distinguishes a CDC from other non-profits. There are state and local associations that work specifically with CDCs  but there has been no national association directly representing CDCs since the National Congress for Community Economic Development (NCCED) dissolved in 2006. 

CDCs in numbers

The NCCED estimated that in 2006, there were around 4,600 CDCs nationally. There has not been a more recent count. Some experts guess the number is lower due to the decline of available public and private sector resources caused by the economic recession, although it's worth noting that the demand for CDCs services has increased (also because of the recession).

Robert F. Kennedy played a big role in setting up the first CDC through the Special Impact Program, an amendment to the Economic Opportunity Act of 1964, allowing the federal funding of community development projects in poor urban areas. Kennedy created an action plan for community development, which led to the formation of the Bedford Stuyvesant Restoration Corporation, considered the first CDC in the country.

Historically, many CDCs grew out of the Civil Rights movement to fight against redlining and divestment issues in cities. Many had a community organizing/activism background.

While traditionally CDCs were location-based, there are organizations that target specific demographics (for example, the Women's Revitalization Project in Philadelphia serves low-income women and their families). And CDCs now typically focus on development rather than activism.

How do CDCs work?

CDCs follow a bottom-up approach; they are set up and run by community members or local groups like churches and civic associations. In fact, a key feature of CDCs is the inclusion of community representatives in their governing/advisory boards. While it's difficult to enforce because CDCs act independently, the rule of thumb is at least one third of the board is comprised of local residents.

As non-profit institutions, CDCs are tax-exempt and may receive unlimited donations and grants from private and public sources. A significant portion of funding comes from local government and through state and federal grants, such as the U.S. Department of Housing and Urban Development's Community Development Block Grant. CDCs can also receive funding from philanthropic foundations like the Ford Foundation and the Surdna Foundation.

CDCs may also apply for funding through intermediary organizations (like the Local Initiative Support Corporation and NeighborWorks America nationally and local organizations like Pittsburgh's Neighborhood Allies) that receive government resources and then allocate funding to community groups.