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New Report is Required Reading for Community Developers


February 25th, 2011 by Joe Kriesberg

A new report by Enterprise Community Partners provides an insightful analysis into the financial challenges facing community developers and offers thoughtful recommendations for how to address them at the organizational and system levels. It should be required reading for all community developers and their supporters.

The report, Building Sustainable Organizations for Affordable Housing and Community Development Impact, affirms many of the conclusions and recommendations developed by the Massachusetts Community Development Innovation Forum over the past three years.  Enterprise conducted an in-depth analysis of 10 nonprofit organizations that have faced financial crisis in recent years and examined systemic issues that contribute to financial weakness. The report also identifies the particular strengths and weaknesses facing neighborhood based organizations. Finally, the report offers recommendations for both community development organizations and for funders/lenders.

According to Enterprise, community development organizations should:

  • - Strengthen their financial reporting and management,
  • - Beware of one-time cash receipts and manage them effectively,
  • - Diversity revenue streams, but only by growing strategically into business lines that align with organizational mission and can be profitable in the long-term,
  • - Prioritize financial sustainability to ensure that long-term organizational health is not endangered by a single project or program, even one that has high mission impact, and
  • - Collaborate to reduce costs, improve quality, and expand impact.

Enterprise offers the following recommendations to funders and lenders:

  • - Incentivize long-term ownership and stewardship of affordable housing assets by allowing cash flow to be paid to a project’s sponsor,
  • - Set realistic property and asset management fees and structure deals with sufficient cash flow to pay them, and
  • - Embrace an early warning system to address problem properties and weak organizations quickly before they grow beyond repair.

Here in Massachusetts we are already taking action to implement many of these recommendations. We are promoting the implementation of the Strength Matters TM financial reporting system and providing other training and support to improve financial management. We are offering training for asset management and advocating for increased asset management fees. And we are engaged in an active discussion about how to improve cash flow and reduce reliance on one-time developer fees. And, of course, we are implementing a host of new collaborations. The Enterprise report will hopefully fuel these efforts and secure broader support for making the changes needed to sustain and grow the community development field.

Posted in Community Development, Financial Health, Innovation, Joe Kriesberg | Comments Off

Can Massachusetts Replicate Policy Success Achieved in Other States?


February 23rd, 2011 by Joe Kriesberg

Throughout my years at MACDC, I have been an active participant in a network of CDC associations from around the country. The network – first convened by the National Congress for Community Economic Development and now by the National Alliance of Community Economic Development Associations (NACEDA) – provides an opportunity to learn about programs and policies in other states that might be applicable in Massachusetts. (It’s also a great place to commiserate with the very small group of people who do the same work we do at MACDC!)

The Mel King Institute for Community Building was partially inspired by CED training programs in other states and now MACDC is trying to replicate another successful approach that has been well tested in other states.  For years, state and cities around the country have operated so-called “Neighborhood Assistance Programs” that provide tax credits to encourage corporations and individuals to donate more money to selected community based nonprofit organizations that offer high quality programming.  The programs vary from place to place, with some placing more emphasis on community development and others on human services. The size of the credit can range from 30% to100% and from one year to 10 years. And some programs are more competitive than others. In each case, the programs foster stronger partnerships between the private sector and the non profit sector and they leverage public investment with private contributions.

After studying a number of these programs, in particular Philadelphia, New Jersey and South Carolina, MACDC has proposed legislation to create the Community Development Partnership program here in Massachusetts. (We also looked at Virgina, Indiana, Missouri, Pennsylvania, and Deleware.) Earlier this year, Senator Sal DiDomenico and Representative Linda Dorcena Forry, along with 46 other legislators filed this bill for consideration in the State House. We think the bill takes some of the best elements of the different programs around the country and tailors them to the Massachusetts context. Specifically, the bill would provide a 50% tax credit to corporations and individuals who make a donation to community based organizations that have been carefully vetted through a competitive process administrated by DHCD. To qualify, the community organization must first be certified as a CDC under MGL Chapter 40H to ensure that the group is both genuinely community based and has a core mission of community development. Second, the organization must be selected by DHCD for a tax credit award through a highly competitive process in which each organization submits a thoughtful, long term business plan that outlines their goals, strategies and metrics for success. I encourage you to read the legislation and/or our summary of the bill to learn more.

The key idea behind the bill is that local community members can use this program to develop and implement their own local strategies for creating jobs, growing businesses, building homes and otherwise improving their communities. It will support demand driven community development in a way that we have never been able to do before and will increase the scale and impact of our community development efforts throughout the state.

You will be reading more about this exciting new legislation in future blog posts. You can also learn more about how these programs work and other community development initiatives around the country by joining MACDC at NACEDA’s Annual Summit in Washington, DC from May 23 -25.   Please join us!

Posted in Community Development, Innovation, Joe Kriesberg, State Policy | Comments Off

Entrepreneurship Week at MACDC


November 19th, 2010 by Joe Kriesberg

“Entrepreneurship is the single greatest force for social and economic wealth generation in the world.”

That’s a bold and perhaps provocative statement, but that is what Babson College President Len Schlesinger said at the graduation event for the Mel King Institute’s “Raising the Standard for Small Business Technical Assistance” training seminar this week.  And after spending much of National Entrepreneurship Week talking with and about entrepreneurs, I think he might be on to something.

While I can’t say it was planned this way, I did spend much of National Entrepreneurship Week focusing on how we can better support local entrepreneurs.

On Monday, I spoke on a panel at the “Access to Credit” Seminar sponsored by Bank of America in partnership with the Greater New England Minority Supplier Development Council.  The seminar talked about the challenges that minority-owned businesses were having obtaining credit from banks and how alternative lenders, including CDCs, CDFIs, and public agencies, could help fill the gap.

On Tuesday, I attended the second board meeting of the new Massachusetts Growth Capital Corporation where we voted to appoint Chuck Grigsby as interim President. Chuck is no stranger to MACDC. He has worked closely with us during his tenures at the Community Development Finance Corporation, the City of Boston and the Life Initiative and most recently chaired the Founding Committee for the Mel King Institute for Community Building.  The MGCC will be an important source of financing and technical advice for small businesses in Massachusetts and I’m thrilled to be working with Chuck and the other board members to build the MGCC into a great organization.

On Wednesday, I moderated a panel at the Statewide Conference on Immigrant Entrepreneurship sponsored by the Immigrant Learning  Center, Inc. and Babson College.  The panel focused on the role of Immigrant entrepreneurs in revitalizing urban neighborhoods and we had wonderful presentations from Paul Wantanabe, from UMASS Boston and the Institute for Asian American Studies, Allison Moronta from JPNDC, Long Nguyen from Viet Aid and Saul Perlera, from Perlera Real Estate in East Boston. Paul provided an overview of his report on this subject that documented the enormously vital role these entrepreneurs play in our neighborhoods, while Allison and Long discussed the challenges they face.  Saul told us his inspiring story of moving to Boston as a 16-year-old, undocumented immigrant from El Salvador, obtaining legal status thanks to legislation signed by President George H.W. Bush, becoming a citizen, starting a Real Estate firm and hiring 14 people – and now surviving the real estate crash so he can continue to provide jobs and services to his community.

The Conference included many other inspiring and informative speakers and demonstrated the vital role that immigrants are playing in our economy. It made many of us angry that these contributions are not recognized more widely, but also more determined to change the conversation nationally and locally.  I’m looking forward to working more closely with the Immigrant Learning Center in the coming year to advance policies and programs to support immigrant entrepreneurship

On Thursday, I returned to Babson College – Ranked #1 in Entrepreneurship Education for the 14th year in a row in 2010 – for the final session of the Mel King Institute’s “Raising the Standard for Small Business Technical Assistance” training seminar.   The Seminar was hosted by Babson and led by a wonderful team of instructors, including Elizabeth Thornton and Donna Stoddard from Babson College and Jason Friedman from Friedman Associates.  The seminar provided 36 hours of classroom instruction plus individualized assistance in between class sessions.  At the seminar on Thursday, participants from the Community Business Network shared with the others how they used the first session’s class on outcome measurement to inspire them to completely rethink their approach. They showed the group their new intake form, theory of change, outcome goals and indicators. Several of the other CDCs were so impressed that we are now talking about implementing the system at CDCs across the state!  This provides, I think, yet another example of the new openness to sharing and collaboration that we see throughout the field.

We were also joined on Thursday by Babson College President Len Schlesinger and the state’s economic development Secretary, Greg Bialecki who came to congratulate the participants on completing the Seminar. Secretary Bialecki highlighted the Governor’s commitment to entrepreneurship and innovation and said that the work of the CDCs fits squarely in that agenda. He also announced that the Growth Capital Corporation has allocated $600,000 to provide FY 2011 grants to small business technical assistance program and that the GCC intends to build on this to do more in the future. President Schlesinger gave an inspiring talk in which he made his comment about entrepreneurship being the single greatest force for social and economic wealth generation in the world and pledged to continue working with us to advance the field throughout the state. 

Len Schlesinger and Babson College define entrepreneurship as “a way of thinking and acting that is opportunity obsessed, holistic in approach, and leadership balanced.”   That’s a good way to describe the entrepreneurs in our neighborhoods. It’s also a good description of many Community Developers.  Perhaps there is more to Len Schlesinger’s comment than we realized!

Posted in Community Development, Small Business | 1 Comment »

Innovation in Indianapolis


November 3rd, 2010 by Joe Kriesberg

Last month I travelled to Indianapolis to attend a meeting of the Institute for Comprehensive Community Development’s  National Advisory Committee and to tour some of Indianapolis’ hardest hit neighborhoods. It was inspiring to see how local CDCs and CBOs are working together and with LISC and other partners to undertake long term and comprehensive community development initiatives.  Indianapolis has had a strong CDC sector for many years, thanks in part to support from LISC, the City, the Eli Lilly Foundation and other supporters. Over the past five years, the community development sector in the city has fully embraced Comprehensive Community Development as part of their Great Indy Neighborhoods Initiative (GINI).  GINI seeks to replicate the highly successful Chicago model in which broad neighborhood coalitions come together to develop Quality of Life plans for their neighborhoods and then work jointly to implement them. It’s a model that Boston LISC is now replicating through its Resilient Communities/Resilient Families program.  

One of the neighborhoods that we toured was the Near East Side neighborhood where 40% of the homes are vacant and/or foreclosed and many of the others in disrepair.  The neighborhood used to be home to one of the nation’s largest and most successful CDCs – the Eastside Community Investments (ECI) which collapsed in the 1990s (it went from over 80 employees to zero in just two years.)  Now a new coalition has emerged led by the John H. Boner Community Center and they have a strategy to attract $100 million of investment to rebuild the neighborhood. The coalition has also helped start a new CDC to fill the void left by ECI’s collapse. I thought it was interesting that the demise of one CDC led to the emergence of new players and even a new CDC that are now taking the lead in the neighborhood. The lesson for me is that local, accountable, placed based leadership and capacity was needed to fill the void left by the old CDC – external actors and regional organizations could not fill that void.

Yet, external and regional actors do have an essential role to play. In fact, one of the most exciting things happening in the Near East Side, in addition to the emergence of strong local leadership, is that the neighborhood has been adopted by the National Football League and the Super Bowl Host Committee as part of the 2012 Super Bowl.   This has generated millions of dollars and substantial political support for the neighborhood’s agenda. The Super Bowl Host Committee picked this neighborhood because it was well organized, cohesive and had a concrete strategy for sustained change. It is a good example of how well-organized neighborhoods with local capacity can seize unexpected opportunities and bring in regional and even national resources to support a local agenda (rather than impose an external one.)

The local LISC office and our counterparts at the Indiana Association for Community Economic Development  have fully embraced comprehensive community development as their driving theory of change. Massachusetts has much to learn from their experience.

Posted in Community Development, Comprehensive Community Development, Innovation, Joe Kriesberg | 1 Comment »

MACDC Convention Inspires Fresh Optimism


October 22nd, 2010 by Joe Kriesberg

MACDC hosted its 5th Biannual Convention on Saturday, October 16, 2010 at the College of the Holy Cross in Worcester and once again it was an inspiring and exciting event.  MACDC began hosting Conventions in 2002, shortly after I became the Executive Director, as a way to bring together the full spectrum of leaders in the CDC field – board members, residents, and professional staff; Nonprofit allies, funders and public officials;  long-time leaders and emerging ones; black, brown and white; young and old; urban, rural and suburban. Everyone is welcome.

The Convention is a unique event that combines learning, celebration, dance, speeches, awards, theatre and political action – and it’s my favorite MACDC activity! This was the first year we held the event outside of Boston and more than 400 community development leaders and allies joined us for the day. There were many  highlights.

  • • We hosted a Gubernatorial Candidate Forum with Deval Patrick, Tim Cahill and Jill Stein (Charles Baker was invited but declined to attend) in which they articulated their agenda as it relates to affordable housing, small business development and community development. All three spoke against Question 2 which would repeal the state’s primary affordable housing law. They also expressed support for the Small Business Technical Assistance program and for supporting CDCs as critical community building agents. Governor Patrick summarized his achievements over the past four years by highlighting the $1.2 billion affordable housing bond bill, the two foreclosure bills he signed, and the Affordable Housing Preservation bill that he helped bring to the finish line after 15 years of failed efforts. MACDC and our members take pride in the fact that we helped win passage of all four of these bills.  I was particularly pleased that Governor Patrick was able to join us in Worcester on the same day that he was holding a rally with President Obama in Boston.
  • • As we have for each Convention, we organized the “CDC Roll Call” during which each member highlights one recent achievement. The Roll Call is always one of the most popular parts of the day as it demonstrates the tenacity, effectiveness and enduring optimism of our amazing members.
  • • The Convention also featured artistic expression as the Improv Theatre group True Story Theatre  helped us to share our stories in new ways and the Movement City youth dance group from Lawrence energized the crowd with an inspiring dance performance.
  • • The Convention is also a place for learning and we organized seven workshops on a wide range of topics from youth employment and public health to advocacy, immigration and board development.
  • • We released a new report Community Development Goes Green: How MACDC Members Are Embracing Environmental Sustainability.
  • • Informal networking is another key piece of the Convention and judging from the evaluations we received our members really enjoy the opportunity to meet with their colleagues. This is especially true for CDC board members who have many fewer options to talk with their counterparts across the state.  I think we achieved our goal of providing a morale boost for people working on the front lines of community change.

Finally, the convention is our opportunity to say congratulations and thank you to some of the outstanding leaders in our field. This year, we presented awards to Senator Susan Tucker, Worcester City Councilor Barbara Haller, Harbor One Credit Union, Mossik Hacobian, Dan Gelbtuch, Quynh Dang, Maddie Ribble, Kevin Johnson, Mickey Northcutt, Casey Starr, Courtney Koslow, and Brian Pastori.

Indeed, the awards ceremony provided perhaps the most meaningful moment of the day for me personally. Richard Thal presented the Richard Smith Award to Mossik Hacobian who has served Urban Edge  and the residents of their community for over 30 years. Richard’s inspiring and heartfelt presentation, and Mossik’s generous acceptance remarks, demonstrated how much Mossik means to the lives people in the neighborhood and to all of us in the field. The standing ovation that followed was well deserved and brought a tear to my eye.

Jeanne Pinado and David Thibault-Munoz then presented our Rising Star Awards to seven young leaders under the age of 40. Seeing this diverse group of leaders walk on stage one by one provided powerful evidence that the CDC field is blessed with both experienced  leaders who continue to build on decades of achivement and vibrant, intelligent and innovative young leaders who are ready to build on our field’s legacy and make it their own. At that moment , I felt as optimistic as ever about our future and my tears were replaced by chills as the crowd applauded and cheered.

We are on the move, I thought.  And we are all marching forward together.

Posted in Community Development, Joe Kriesberg, State Policy | 3 Comments »

Future of the CDC Field Being Discussed Locally and Nationally


October 4th, 2010 by Joe Kriesberg

This past week, I had the opportunity to make  presentations in Washington, DC and in Boston about the future of the community development field.  On September 28 I gave a presentation to the National Coalition for Asian and Pacific Islander Community Development on 21st Century CDCs as part of a Town Hall Forum on the future of Community Development.  More than 200 practitioners that serve Asian and Pacific Islander communities across the country engaged in a lively and interesting discussion about the challenges and opportunities presented by today’s economic and social context. Of particular interst was the challenge of balancing their mission to provide services to a specific underserved constituency with the need to broadly serve the community in their area. The tensions and dynamics between “people and place” strategies loom large for these practitioners. It certainly reinforced my view that there is no single model or one-size-fits-all answer as to how a CDC should organize itself and develop its programs.

The next day, I presented at a CHAPA Breakfast Forum about the new CDC-Enabling Law recently enacted into law here in Massachusetts. This was my first opportunity to discuss the new law to a broad and diverse audience and begin the process of promoting the statute and its revised CDC definition (although I did write a piece about the law on our blog a few weeks ago.)  The Forum was well timed as DHCD will begin developing regulations to implement the new law and I suspect that many more people will begin to focus on the opportunities created by the statute.

Posted in Community Development, Innovation, Joe Kriesberg | Comments Off

MACDC Members Secure CDFI Funding


September 12th, 2010 by Joe Kriesberg

The U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund recently announced $104.8 million in awards for 179 local financial institutions serving struggling communities in 44 states and the District of Columbia. According to the CDFI Fund’s press release, these grants will help those financial institutions support local entrepreneurs and small businesses, and spur local economic growth and recovery by expanding access to capital and affordable financial services in underserved areas.

MACDC was pleased to see that four of our members had secured over $1.8 million in funding, along with five other Massachusetts based CDFIs who received another $3.2 million (three of these were national funds that are based here.)  Profiles of the winning organizations can be found on the CDFI web site.

Congratulations to our members:

The CDFI program provides both technical assistance grants and core grants to certified CDFIs that demonstrate strong capacity and a sound strategic approach toward advancing their mission. The program is an excellent example of how the government can systematically and strategically build and strengthen a key field within the nonprofit sector. The program starts with a formal certification program that allows the CDFI Fund to identify the specific organizations that they are trying to strengthen. It then invests in both building their capacity through technical assistance grants and invests in their strategy through core capital grants. The funding is at the “enterprise level” and invests in their mission, rather than providing highly restricted, categorical grants that fund specific programs or activities.  As a result, the CDFI sector has grown substantially since the start of the program in the mid- 1990s.

While the current financial crisis has certainly taken its toll on the CDFI field – Shore Bank, one of the nation’s oldest and most successful CDFIs collapsed and had to be acquired by another institution -  the CDFI program has helped create a diverse, durable and resilient sector with the overwhelming majority of CDFI’s weathering today’s storm.  And the existence of a solid support infrastructure helped the CDFI field successfully secure additional funding through ARRA because there was an efficient way to distribute funds across the country.

Community health centers, Community Action Agencies and other non profits benefit from similar systems of support. However, at the moment, there is no parallel system for CDCs either at the Federal or state level and this is a serious problem for our field.

We hope to change that reality here in Massachusetts with the recent passage of a new CDC-enabling law, Chapter 40H.   This law will provide a mechanism for certifying CDCs in Massachusetts, thereby laying the foundation for establishing publicly and/or privately funded programs similar to the CDFI model. Ultimately, a comprehensive system of core support, technical assistance, organizational capacity building, professional development, and program funding would enable CDCs to work together and with others to dramatically increase our ability to bring economic opportunity to communities, neighborhoods and families across the Commonwealth.

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What’s a CDC? New Legislation Provides an Answer.


August 24th, 2010 by Joe Kriesberg

“What is a CDC?”

I have probably been asked that question 1,000 times since I started working at MACDC in 1993.  It seems like a rather simple question and certainly one that the President of a CDC association should be able to answer.

But it is not so easy.  There are many different definitions in use around the country and many use words like “often,” “usually,” and “may,” when describing a CDC’s structure and activities.  Certain themes emerge – housing development; economic development; community engagement; neighborhood revitalization, etc, but no clear definition exists that is universally used in the field. The resulting confusion creates a problem for those who want to build and strengthen the sector.    

In Massachusetts, we have had a state law define the term since 1975. However, over the past decade or so that law became a dead letter as the definition  became more outdated — one provision of the law required that CDC board members must have 3 year board terms. So if a nonprofit had board terms of 2 years – it was not a CDC! Moreover, the benefits associated with the definition were minimal and there was not even a process by which groups could be officially certified as a CDC so there was no list of who even qualified for those benefits that did exist.

A few years ago, the Massachusetts Community Development Innovation Forum  decided to explore two questions: What is a CDC? And does it matter?

After countless meetings and discussions and research about how the term is used throughout the country, we agreed that it was indeed important to define the term because we can’t grow stronger CDCs if we don’t know who or what they are. We also settled on a new, updated, 21st Century Definition of a CDC that reflects the diversity of our field and the diversity of our communities.

And thanks to legislation signed into law by Governor Deval Patrick on August 5, 2010, our new definition (Section 86) is now officially part of state law.

Our definition boils down to three core elements – the organization’s mission, its activities, and its governance.  Specifically, Massachusetts’ new definition says that a CDC is a nonprofit organization based in Massachusetts that:

  1.  “. . .has as the corporation’s purpose to . . . develop and improve urban, rural and suburban communities in sustainable ways that create and expand economic opportunity for low and moderate income people;”
  2. “ . . . engage[s] local residents and businesses to work together to undertake community development programs, projects, and activities;” and
  3. “[can] demonstrate . . . that the corporation’s constituency, including low and moderate income people, is meaningfully represented on the board of directors . . . “

Our vision is that this definition will encompass a broad range of groups – far broader than the set of organizations traditionally considered CDCs in Massachusetts. We are trying to recognize and validate the different communities, histories, models and strategies that have evolved over time – so long as they share the three core elements above. 

The statute also requires the state’s Department of Housing and Community Development to develop guidelines and procedures for certifying groups as being a CDC. Over time, this will allow us to say specifically who and what a CDC is in our state. It will increase accountability and credibility for the field. And it will enable us to develop an intentional and comprehensive strategy for strengthening and sustaining these organizations over time – thereby creating and ensuring that we have the capacity to empower local residents and expand economic opportunity throughout the Commonwealth.  Such a strategy can learn from and improve upon our past experience in Massachusetts as well as other models like the CDFI and CHDO models developed nationally in the 1990s.

We are thankful to the Legislature and the Governor for enacting this important legislation. The stage is now set for an exciting transformation of the community development system in Massachusetts that builds on its extraordinary history of achievement while laying the foundation for even greater success and impact in the future.

In the 1970s and 1980s, Mel King, Governor Michael Dukakis and many others established the legal, financial and intellectual foundation for the Massachusetts community development field that allowed a nascent movement to grow into a powerful sector that generated $1.67 billion of economic activity over the past seven years. This is their legacy – one that provides new benefits year after year.  Now it is our turn. Today’s community development leaders must work together to bolster, expand, and strengthen the field so our communities and the people who live and work there have the opportunity to work together and with others to create neighborhoods and communities of choice throughout the Commonwealth.

Let’s get to work!

Posted in Community Development, Innovation, Joe Kriesberg, State Policy | 1 Comment »

Unsung Heroes: The Success of Nonprofit Counseling Agencies in Combating Foreclosures


June 7th, 2010 by Don Bianchi

This is a true story. Actually, it is two stories about the foreclosure crisis, both true.

We’re familiar with the first story. In Massachusetts and across the country, the foreclosure crisis continues to decimate families, and communities. The response from loan servicers has ranged from marginally improved at best, to anywhere from woefully inadequate to counter-productive at worst. The programs initiated by the federal government have been too little and too late and too reliant on the voluntary participation of lenders.

According to data provided by the Warren Group to the Boston Globe, the number of homeowners in Massachusetts who lost their properties to foreclosure in April, 2010 (1,372) is 80% more than the number from April of 2009 (764), and the number of foreclosure petitions (the first step in the foreclosure process) jumped 21% compared to April of 2009. Furthermore, lenders are getting more efficient at foreclosure, reducing the time it takes to complete a foreclosure from 9.2 months in October, 2008 to 4.6 months in November 2009.

But there is another story, hidden under the grim headlines of the first story. Nonprofit counseling agencies across the Commonwealth are helping prevent foreclosure, and when necessary they are helping people transition to new housing so they can land on their feet.

During calendar year 2009, according to data collected by MACDC through its GOALs Survey, MACDC Members counseled 5,200 households at risk of foreclosure. The same members reported that, by the end of calendar year 2009, 31% (1,590 households) had achieved a positive outcome (averting foreclosure) by the end of the year. Since it can take many months for these situations to be resolved many of these 5,200 households will eventually achieve a positive outcome in 2010. Furthermore, the percentage of families in Massachusetts achieving successful outcomes within the same year increased from 24% in 2008 to 31% in 2009.

Some of this success is likely attributable to the Obama Administration’s Home Affordable Modification Program (HAMP) that was introduced in early 2009. Despite significant problems with HAMP in moving borrowers from temporary to permanent loan modifications, by February, 2010, over 4,000 Massachusetts families had received permanent loan modifications under the program.

The positive impact of foreclosure prevention counseling is further demonstrated by data on the National Foreclosure Mitigation Counseling Program (NFMC). The most recent findings from an Urban Institute analysis of NFMC showed that homeowners who sought counseling after a foreclosure filing were 1.6 times more likely to get out of foreclosure, and avoid a foreclosure sale, than homeowners not assisted by counseling.

The experience of MACDC members bears out the positive impact of this counseling. Juan Bonilla, the Director of Homeownership Programs at Lawrence Community Works (LCW), tells a story of an elderly man who was not aware until days before his home was to be foreclosed that there was assistance available. With LCW’s help he got the auction postponed and later submitted the documents necessary for a loan modification, which LCW expects to be successful. There was a woman whose lender gave her a trial modification, and at its completion insisted she enter another trial period at a higher interest rate and payment, because the lender mistakenly calculated that her income had increased 25%. Because of the intervention and the persistence of the LCW counselors, both homeowners remain in their homes. Since 2007, LCW has provided foreclosure prevention assistance to approximately 400 families in the region, and 59% of these families have achieved positive outcomes.

At the Neighborhood of Affordable Housing (NOAH) in East Boston, Counselor Smita Das tells the story of a single mother of two young children. After losing her job, she was unable to pay the two mortgages on her triple-decker. With NOAH’s helped she received a trail modification under the HAMP program, and then a permanent modification that lowered the combined monthly payment on her mortgages from $4,500 to just over $2,800.

Michele Morris of Valley CDC in Northampton highlights an important reason for counselors’ success in helping homeowners in crisis: the ability to develop a positive working relationship with the loan servicer’s staff. Homeowners may typically vent their frustration by treating the loan servicer’s staff as an adversary, which is not conducive to getting the family’s loan prioritized and getting the complex servicing errors untangled.

The moral of this story is clear. With all the challenges associated with loan modifications and foreclosure prevention counseling, it remains the fastest and most cost effective method of assisting families facing foreclosure, preserving family wealth, avoiding displacement, and stabilizing neighborhoods. Our frustration and anger about the on-going foreclosure crisis should not obscure the important success that nonprofit organizations are having day after day, one family at a time. We need to dramatically increase support for counseling, not throw in the towel in despair.

Posted in Community Development, Don Bianchi, Foreclosures, Massachusetts, State Policy | 1 Comment »

Philadelphia Conference Explores Future of Community Development


May 20th, 2010 by Joe Kriesberg

Last week I had the opportunity to speak on a panel at a conference hosted by the Federal Reserve Bank of Philadelphia on the future of Community Development. The panel was the closing plenary session for the conference entitled Rethink. Recover. Rebuild: Reinventing Older Communities. It was broad conversation that gave me an opportunity to reflect upon and share some of the lessons and experiences we have had as part of the Community Development Innovation Forum here in Massachusetts. My fellow panelists were Kimberly Allen from the Wachovia Regional Foundation, John Bendel of the Federal Home Loan Bank of Pittsburgh who leads its community investment program, and their Blueprint Communities program, and Raphael Bostic who is the Assistant Secretary at HUD responsible for Research and Policy.

The discussion touched on many themes, but the one that seemed to resonate the most was the importance of working comprehensively and across silos. This was very reminiscent of the discussion a few weeks earlier at the launch of the Institute for Comprehensive Community Development. Both Kimberly and John are focusing their grantmaking on efforts to undertake comprehensive, multi-issue, multi-stakeholder placed based change efforts. At the same time, HUD is working aggressively to break down silos between federal agencies and federal programs. Asst. Secretary Bostic said that HUD is in regular meetings with officials from transportation, education, health care and other agencies looking for ways to align their strategies and work on collaborative approaches like Sustainable Communities and Choice Neighborhoods.

The panel also engaged in an interesting dialogue about how we can determine “what works” so they we focus resources on those programs. While everyone certainly agreed that we want to fund “what works” there was some disagreement about how capable we are at really knowing what works given the complex set of relationships and networks that impact outcomes. How do we make decisions given this uncertainty? How do we make sure that we use data appropriately? And how do we decide what works when different stakeholders have different goals and priorities?

Fortunately, after participating in these policy and theoretical discussions at the conference Rick Sauer, from the Philadelphia Association of CDCs took me to visit one of his member organizations, the Hispanic Association of Contractors & Enterprises. HACE Executive Director Bill Salas Jr. showed us the neighborhood and the incredible work that his CDC has done implementing precisely the type of comprehensive approach that we discussed on the panel in the morning. HACE builds and manages family and senior housing, operates an innovative Main Streets program that includes an emphasis on cultural economic development and tourism, a wonderful partnership with a health care agency that serves the residents of their senior housing (HACE custom built a facility for the health care agency on the same site) and youth programming. The agency is led by a board of directors comprised largely of local, Hispanic residents working together to improve their community.

While my site visit did not answer all the questions raised at the conference, I left Philadelphia reaffirmed in my belief that resident-led, effectively managed, community based development is certainly among the things that really does “work.” Hopefully, as the federal government and other funders renew their commitment to place-based and comprehensive work they will also renew their commitment to building and supporting the local organizations that actually get the job done.

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