Community Development Corporations: Diverse Practices Across North and South Carolina
Federal Reserve Bank of Richmond
The Community Development discipline and practice continues to explore the most effective ways to mobilize people and resources at the neighborhood level in order to create mechanisms for investment locally. As community development practitioners continue to capitalize on opportunities to create practical solutions, there remains a steady need to ensure adequate pathways to find, grow and sustain local leadership. Organizations of local residents create opportunities for direct, neighborhood decision-making and empower individual engagement in present and future plans for the area. The validity of a community development bottom-up, grassroots approach requires the development of human capacity in those who are leading the management and development of these investment systems and programs. In North and South Carolina, community- and neighborhood-level action agencies and programs have a rich history of engagement and change, and provide some examples of how Community Development Corporations (CDCs) have matured over the years.
The CDC model is said to have been created in the late 1960s when U.S. Senator Robert F. Kennedy and his staff conceived of the idea for a community corporation for Brooklyn’s Bedford-Stuyvesant neighborhood under the belief that the private sector’s power and wealth should be involved in neighborhood opportunity and individual betterment.1 The Economic Opportunity Act of 1964, United States Public Law 88-452 (EOA), authorized the formation of local community action agencies as part of the “war on poverty.” In 1966, the EOA was amended to include the “Special Impact Program,” which funded community development programs in urban poverty areas starting with the Bedford-Stuyvesant Restoration Corporation.2 Today, CDCs are nonprofit organizations organized under the Internal Revenue Service section 501(c)(3) to support and revitalize communities, especially those experiencing economic and social distress.3 CDCs most often develop affordable housing and other community services that meet local needs, such as education, job training, healthcare, commercial development and food services.
CDCs typically self-identify as such and some states have state associations to encourage professional development and collaboration. The North Carolina Association of Community Development Corporations (NCACDC) was created in 1989 with 11 charter members as a statewide membership organization designed to provide technical assistance and help build the capacity of CDCs. In South Carolina, the statewide CDC association was founded in 1994 with four CDCs. At the national level, the National Association of Community Economic Development Associations (NACEDA) represents those state associations. Locally, CDCs are sometimes called Community Economic Development Corporations (CEDC). In 2014, the South Carolina Association of CDCs changed its name to the South Carolina Association of Community Economic Development Organizations (SCACED) to more closely identify with NACEDA.
As nonprofit, tax-exempt entities, the typical funding streams for CDCs have included both public and private sources. In 2012, the North Carolina General Assembly ended its funding for 70 CDCs across the state’s rural and urban areas. The loss of state funding to CDCs in North Carolina reflects a national trend in reduced funding to community development organizations. With the ebb and flow of funding from state, local and private sources, some CDCs in both North and South Carolina continue to sustain and even flourish through innovation, transformation and flexibility.
In this issue of Community Practice Papers, we take a look at examples of sustained and emerging business models from rural and urban CDCs across both states.4 The CDCs presented here represent differing geographies, organizational longevity and business model practice (see Map 1). Examples of these practices include commercial development ventures, workforce development opportunities, business incubators, community gardens, intergenerational services and financial education.
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About the Authors
Jeanne Milliken Bonds, formerly the senior manager, Regional Community Development, at the Federal Reserve Bank of Richmond, is now a Professor of the Practice, Impact Investment and Sustainable Finance in the Kenan-Flagler Business School and the Department of Public Policy at UNC-Chapel Hill.
Emma Sissman was an intern from 2016–2017 in the Community Development department of the Federal Reserve Bank of Richmond.
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