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Could 2012 be the best year for Massachusetts CDCs since 1982?


January 3rd, 2012 by Joe Kriesberg

Starting in the mid 1970s, Mel King and other visionary leaders of the community development movement worked systematically to build a support infrastructure for CDCs in Massachusetts. They understood that such a system could grow what was then a nascent movement of community based development organizations, largely in Boston, and transform it into a robust, statewide field that could achieve impact at scale. So they created CEDAC, CDFC, the CDC Enabling Act, Chapter 40F, the CEED program, LISC and ultimately, in 1982, the Massachusetts Association of CDCs. These institutions laid the foundation for what quickly became one of the strongest community development sectors in the country and left a legacy from which we continue to benefit today – 30 years later.

The past few years have seen a similar wave of system building for the community development field. Starting with, and emerging from, the Community Development Innovation Forum that MACDC launched with LISC in 2008, we have seen the creation of the Mel King Institute for Community Building, the transformation of CDFC into the Massachusetts Growth Capital Corporation, and the modernization of the 1977 CDC enabling law into Chapter 40H, which creates, for the first time, a formal CDC certification process. We have also seen a wave of efforts to lift CDC practice in areas as diverse as community engagement (LISC’s Resilient Communities/Resilient Families program), financial management (MHP’s efforts to promote Strength Matters) and asset management, real estate development and small business development (through programs at the King Institute.)  And we have formed new cross-sector partnerships between the community development movement and sister movements in transit equity, smart growth, public health, and energy, enabling us to move toward more comprehensive and systemic change.

These efforts have the potential to culminate in 2012 with the passage of the Community Development Partnership Act. This ground breaking and game changing legislation would leverage up to $12 million in new, private philanthropy for high impact community development efforts. The program is “community centric” rather than “real estate centric,” opening the door for CDCs to pursue broad, comprehensive community development strategies. The legislation has garnered widespread support both inside and outside the State House, with House Speaker Robert DeLeo recently indicating serious interest in moving the legislation forward. If we can pass the CDPA this year, in 2012, it will allow us to build on all the great work of the past three years and the past thirty-plus years and take it to a level of scale and impact we have never seen. And by passing it this year, we can ensure the program is implemented by the Patrick Administration and its outstanding new Undersecretary for Housing and Community Development, long-time friend Aaron Gornstein.

While the economy continues to struggle and our communities fight to recover from the recession, we have a chance to do something big, bold, meaningful and lasting by passing the Community Development Partnership Act.

And when we come together this fall to officially celebrate MACDC’s 30th Anniversary we will not only be able to celebrate our field’s extraordinary history, but also its exciting and bright future.

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

Are we getting too smart for our own good?


November 10th, 2011 by Joe Kriesberg

I greatly enjoyed Russ Douthat’s column in last week’s Sunday New York Times called “Our Reckless Meritocracy.”  Reflecting on former New Jersey Governor Jon Corzine’s fall from grace, Douthat notes that many super smart and super successful leaders in business and politics have “led us off a cliff — mostly by being too smart for [their] own good.” Douthat continues,

“In hereditary aristocracies, debacles tend to flow from stupidity and pigheadedness: think of the Charge of the Light Brigade or the Battle of the Somme. In one-party states, they tend to flow from ideological mania: think of China’s Great Leap Forward, or Stalin’s experiment with “Lysenkoist” agriculture. In meritocracies, though, it’s the very intelligence of our leaders that creates the worst disasters. Convinced that their own skills are equal to any task or challenge, meritocrats take risks that lower-wattage elites would never even contemplate, embark on more hubristic projects, and become infatuated with statistical models that hold out the promise of a perfectly rational and frictionless world.”

While Douthat’s article focuses on the impact of this pattern in business and politics, I wonder if the nonprofit sector might face similar risks. I’m skeptical that simply being smarter by using “evidence based models,” and “data driven programs” and “business metrics” and “triple bottom line investments” will suddenly transform persistent social challenges that have plaqued human society for hundreds, if not thousands of years.  Proposals like Social Impact Bonds, which presume an ability to measure social impact with such precision that we can create meaningful investment vehicles based on that data, strike me as an example of becoming “infatuated with statistical models that hold out the promise of a perfectly rational and frictionless world.” In the community development world, financial innovation has generated more and more complicated financial tools that may add more complexity than value, and also make it harder for local residents and non-professionals to fully enage in the community development process. 

I am certainly not saying that innovation, evaluation, evidence and data are not important. I am not a climate change denier or someone who rejects science, expertise and knowledge.  The nonprofit sector absolutely needs to make better use of emerging tools. We should absolutely strive to learn more about the cause and cure of social ills and apply that knowledge diligently.  I have no doubt that we can do a better job than we have in the past at fighting social challenges and problems. But I also agree with Douthat’s conclusion:

“In place of reckless meritocrats, we don’t need feckless know-nothings. We need intelligent leaders with a sense of their own limits, experienced people whose lives have taught them caution. We still need the best and brightest, but we need them to have somehow learned humility along the way.”

Posted in Community Development, Innovation | 1 Comment »

Neighborhood Revitalization: The White House has spoken but who will listen?


August 1st, 2011 by Joe Kriesberg

While the Tea Party’s manufactured crisis over the debt ceiling sucks up all the oxygen in Washington, the White House quietly released an important new report in July entitled Building Neighborhoods of Opportunity that outlines best practices in neighborhood revitalization around the country.  The report highlights the work of CDCs, community based groups, schools and local governments and discusses how the federal government could more effectively support such efforts.

When I sat down to read it, I was pleasantly surprised to see that they identify five key elements to successful neighborhood improvement – and I agree with all of them (I don’t always agree with the White House these days!) Specifically, the White House report highlights these five things: 

  1. Resident engagement and community leadership catalyzes and sustains comprehensive change efforts;
  2. Developing strategic and accountable partnerships leads to lasting change;
  3. Maintaining a results focus supported by data presents a strategy for achieving specific objectives, helps to focus multiple stakeholders on a common goal, and can lead to a common dataset to measure progress;
  4. Investing in and building organizational capacity helps organizations meet their objectives; and
  5. Aligning resources to a unified and target impact strategy builds a critical mass of efforts in a neighborhood to reduce neighborhood distress.

We can see each these elements in action today in the work that community developers are doing in Boston and around the country.

I was particularly pleased to see items #1 and #4, as much of the current momentum in our field is moving away from these two concepts.  I worry that the drive toward regionalism, centralization, consolidation and organizational scale that permeates much of the national dialogue will inexorably weaken opportunities for meaningful resident engagement and community leadership – what I and others call “demand driven community development.”  Don’t get me wrong – scale and efficiency are good things. But, I am glad that the White House report is reminding us about the importance of community engagement. I hope it will inspire policymakers, funders and practitioners to think about how we can create a system that is both more efficient and more genuinely community based.

The White House is also correct to underscore the importance of building the capacity of organizations to initiate, implement and sustain community improvement.  I hope this serves to push back against what I perceive as a growing “capacity building fatigue” among some funders and policy makers who prefer to work only (or mainly) with well established (and usually large) groups that already have substantial capacity.  Capacity building, like education, needs to be a permanent feature of a well organized, high performing and adaptive community development system.

While there was much to like in the report, it does not offer a strategy for supporting resident engagement and capacity building in a systemic way that gets us to serious scale. Most of the highlighted programs are models and pilots serving a few dozen neighborhoods. But the question that the White House and all of us need to ask is how we support this work in hundreds or even thousands of neighborhoods.  For that, we need sustainable business models that support long term capacity building and resident engagement at the local level.  MACDC’s proposed Community Development Partnership Act is a key part of our answer to that question.  And we also need to make community development programs and projects profitable for community based non profits so they can earn the flexible funds they need to build and sustain their own capacity over time.  Adjustments in federal rules and guidelines could help with that objective.  

The White House report lays out some exciting ideas for generating sustainable economic development at the neighborhood level – something our country desperately needs. Let’s hope that the debt ceiling deal does not kill these efforts before they have a chance to bear fruit.

 

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

MACDC Explores Potential for Statewide Community Business Partnership


May 16th, 2011 by Joe Kriesberg

The Community Development Innovation Forum has helped to spur numerous efforts to expand and deepen collaboration with the goal of improving effectiveness and efficiency in the sector. With the help of new funding from Citi and Bank of America, MACDC is now leading a major planning effort to explore the efficacy and viability of a statewide partnership among CDCs and others who provide technical assistance to local entrepreneurs.

For years, MACDC members have helped entrepreneurs start, grow and sustain small businesses that provide jobs and opportunity for local communities. In 2010, our members served over 2,000 entrepreneurs develop business plans, find new locations and markets, access financing and deal with the slumping economy. CDCs have frequently partnered in these efforts with each other and with other organizations such as Small Business Development Centers, local governments, banks, and CDFIs (many of our members are CDFIs themselves.) Perhaps the most sustained and deepest of these partnerships has been the Community Business Network in Boston through which several CDCs have worked together since the mid 1990s.

Earlier this year, MACDC received funding from Citi and Bank of America to explore the potential for a statewide partnership that builds and expands on these earlier efforts. We formed a planning committee comprised of practitioners, public officials, bankers and scholars to guide our planning effort and hired two experienced consultants, Leslie Belay and Jason Friedman, to conduct research, planning and program design work.  Jason is examining best practices around the country and Leslie is conducting interviews and focus groups with stakeholders here in Massachusetts. At a recent meeting with the SBA and their partners, national SBA Administrator Karen Mills joined the meeting and voiced her strong support of the effort and specifically encouraged SBA partners like the SBDCs to partner with CDCs and vice versa.

The planning efforts has already identified several areas where collaboration could yield significant benefits. These could include: shared information technology and outcome measurement systems; shared protocols for intake, assessment and business plan assistance, shared expertise in specific sectors or areas of support (e.g. food industry, or green technologies); shared market research that would provide local businesses with access to better market data; joint partnerships with other organizations, professional development and training for practitioners, joint fundraising, and special projects.

We expect the planning process to proceed through the summer with the hopes of making a determination by early Fall as to whether such a Partnership makes sense. If we decide to move ahead, the next stage will include fundraising, recruitment of the initial class of members, and refinement of the program design, structure and services.

If you are interested in learning more or getting involved, please contact me.

Posted in Innovation, Joe Kriesberg, Small Business | No Comments »

Is the Collaboration Trend Getting Old?


April 30th, 2011 by Joe Kriesberg

Collaboration has become such a popular word in our field that one wonders at times whether it has lost its meaning and importance. Has collaboration become a cliché? Is it a passing fad? Has it been oversold?

I would have to say, from what I am seeing in Massachusetts and around the country, that the answer is an emphatic no!

When the Community Development Innovation Forum was launched in 2008, we established a collaboration working group that produced a report on different models of collaboration around the Commonwealth. The Forum has promoted collaboration as a critical strategy for increasing impact and gaining efficiencies.

Recently, the Federal Reserve Bank of San Francisco has published a terrific new report that highlights examples of new collaborations from around the country – including one from Boston (the Fairmount Collaborative in Boston.)  The paper, The New Way Forward: Using Collaborations and Partnerships for Greater Efficiency and Impact, was written by Dee Walsh and Bob Zdenek, two of our country’s leading practitioners. I highly recommend it to all community developers.

Meanwhile, on a recent trip to South Florida to speak at the Annual Summit of the Florida Association of CDCs, I learned about the Broward Alliance for Neighborhood Development (BAND.)  BAND is a coalition of more than 30 CDCs and nonprofit organizations in Broward County (Ft Lauderdale) who are committed to providing decent, affordable housing in their communities. The mission of BAND is to foster non-profits that create quality housing and strong neighborhoods. The goal of the organization is to increase the capacity of its non-profit members so that the varied housing needs of all residents of Broward County are met. BAND members have pooled resources to hire central staff and to secure NSP dollars for their communities.

Back here in Massachusetts the Catalyst Fund for Nonprofits  has announced its first set of grants to nonprofits that are pursuing innovative collaborations and two of the initial grants are going to MACDC members.  A recent article in the Boston Globe describes grants to Chelsea Neighborhood Developers to develop a Family Economic Center and to Urban Edge and Allston Brighton CDC to pursue a joint asset management strategy.

I think it is clear that collaboration is here to stay in the community development sector.

Posted in Book Review, Community Development, Innovation, Joe Kriesberg | No Comments »

A Smarter Way to Reduce Health Care Spending


April 25th, 2011 by Joe Kriesberg

The first meeting I ever attended on behalf of MACDC – way back in 1993 – was at the Bowdoin Street Community Health Center. The purpose of the meeting was to strategize ways to reduce childhood lead poisoning by building a coalition of community development, housing, environmental and public health advocates to fight for changes in policy and practice that would better protect our children. Over the ensuing years, we successfully won major legislative change, new funding for lead abatement, and a robust effort of abatement, education, prevention and treatment that has nearly eliminated lead poisoning from the Commonwealth (although the risk is still serious in much of our older housing stock.)

The success of that collaborative effort came to mind the other day when I was attending the Health Communities Conference co-sponsored by the Federal Reserve Bank of Boston, the Mel King Institute’s Innovation Forum and several other partners. The conference explored the benefits of linking community development to community health efforts as a way to reduce chronic disease and improve wellness. The importance of this effort was underscored by Paul Grogan, President of the Boston Foundation, in his keynote remarks where he highlighted the fact that health care spending is now completely crowding out public investment in virtually every other area – education, recreation, housing, community development, food supports, and public transit. Yet by investing in these other areas we could actually reduce the need for costly medical care and improve the quality of people’s lives. Indeed, providing a homeless family with stable, safe housing might do more to reduce hypertension, asthma, and other chronic illnesses than all the medicine that money can buy.

The Conference included a number of interesting speakers from both the community development and the community health sectors. We heard about cutting edge research that documents that close correlation between socio-economic status and neighborhood quality with health outcomes. We also learned about innovative programs at the ground level that are beginning to make an impact. Materials from the conference are expected to be available soon on the Federal Reserve Bank’s conference web site.

MACDC intends to work with our partners in the public health field to build on the excitement from the conference to explore opportunities for innovation in public policy and community practice. With health care at the top of the priority list in both the State House and Congress, there will be many opportunities to gain traction. Perhaps someday, doctors will have the ability to fight the causes of disease by prescribing rental assistance subsidies, job training and T-passes instead of being limited to simply treating the symptoms of disease with costly medical procedures and pharmaceuticals

Posted in Community Development, Comprehensive Community Development, Innovation, Joe Kriesberg, Public Health | 2 Comments »

How can we drive performance in the Community Development Field?


March 16th, 2011 by Joe Kriesberg

Performance and accountability are the subject of substantial discussion these days throughout the nonprofit sector. Government agencies, private funders and non-profit leaders themselves are increasingly focused on taking steps to ensure that we fund programs “that work” and stop funding those “that don’t”.   Last week, I wrote about Social Impact Bonds, a new approach for doing this about which I have serious concerns. Today that I want to share an idea that I think has great promise.

Obviousely, no one can disagree with the view that we should “fund what works.” But this statement simply begs the question of what we are trying to achieve. While this may seem easy to determine, in fact it is often not. Most non-profit organizations and programs have multiple stakeholders, each of whom have their own set of goals – goals that are sometimes in conflict, and are almost always different in terms of emphasis, time frame and priority. Balancing the interests of these different stakeholders is one of the key challenges of being a leader in the nonprofit sector.

At the same time, it is precisely this balancing act that I believe drives innovation and ultimately better, and more sustainable, long-term outcomes. Simply put, this complexity mirrors the complexity of the real world so it produces solutions that will work in the real world. Communities and people are complicated. There are no silver bullets or simple solutions to deeply rooted, complex social challenges, and success looks differently to different people. Equally important, all activities and interventions have multiple impacts and externalities – positive and negative – and they all have short term and long term impacts. This is especially true in the community development field where we are trying to have an impact on individuals and families as well as the broader community. I believe that having multiple stakeholders at the table helps to ensure that all of these impacts are considered, and that negotiating these competing interests results in more balanced, creative and effective solutions.

MACDC hopes to promote this framework through our campaign to enact the Community Development Partnership Act. (read summary.) This bill, co-sponsored by Rep. Linda Dorcena Forry and Senator Sal DiDomenico and 46 other legislators, (and modeled after similar programs in other states) would use tax credits to leverage private donations to genuine and authentic community based development organizations, i.e. CDCs. Rather than creating static, rigid, or one-dimensional outcome metrics for the program, the CDPA will use three levels of accountability to ensure the program’s success while maintaining local flexibility and driving innovation.

  • -  First, and foremost, community members would have a voice because only those organizations with meaningful community representation on their board of directors would be eligible to compete for the tax credits. This helps to ensure that programs and activities funded are relevant and appropriate to the particular local community.
  • -  Second, state government will have oversight because they will review each application and determine which groups receive an allocation of tax credits. Those applications will specify how the CDC will evaluate and measure success. The state will then collect data and reports to measure progress and outcomes.
  • -  Third, the CDCs will need to convince private sector donors – corporate and individual – to make donations with the tax credit creating an incentive, but no guarantee, that funds will be provided.

We believe that having three levels of accountability increases the likelihood that the CDPA will be successful as compared to a program that is designed to simply meet the needs of a specific funder or stakeholder.  To be successful, CDCs will need to innovate, partner, measure, learn, and adapt. CDCs that don’t will surely lose the support of at least one of their key stakeholder groups – if not all of them – and fall out of the program.

Performance and ensure accountability are core values for MACDC. Look for future blog posts about other ways that MACDC, its members and our partners are seeking to advance those values. And, please, share your own!

Posted in Community Development, Innovation, Joe Kriesberg, Massachusetts, State Policy | No Comments »

Will Social Impact Bonds Really Improve Nonprofit Performance?


March 2nd, 2011 by Joe Kriesberg

The Obama Administration has appropriately placed a high priority on driving better performance in both the public and nonprofit sectors as they seek to tackle serious social and economic challenges. This includes a heightened emphasis on research, evaluation and funding “programs that work.”  All of this is certainly welcome news. Unfortunately, as part of this effort, the Administration has embraced a new idea that I fear could take us in the wrong direction.

In the FY 2012 budget, President Obama has proposed  $100 million to fund co-called Social Impact Bonds. The purpose of the Social Impact Bond is to create a new capital market that will encourage private, profit-motivated investors to fund social programs that “work.”  Essentially, an investor would front the money to pay for a particular program. If and when the program achieved the designated benchmarks, the government would pay the investor for the cost of the program plus enough to cover their risk and earn a profit. The theory is to create a market where investors can make money by investing in effective social programs.

Sounds good right? The government only pays if the program works. Taxpayer money is no longer wasted on ineffective programs. Private sector discipline and oversight is brought to bear on the nonprofit sector!    But wait! Is this really going to work? Is creating a Wall Street-like investment market the best way to strengthen nonprofit performance? Judging from the performance of Wall Street in recent years (have you read The Big Short?), one has to at least ask the question!

While I understand the appeal of this idea – and would welcome new sources of funding for high performing social programs – we need to carefully examine the implications of this approach to funding non-profit social service programs.  I see many serious questions that advocates of these bonds need to answer before tax dollars are invested.

First, Social Impact Bonds are likely to encourage functional specialization and silo-thinking. Money will flow to programs that can hit a single key benchmark so programs will be designed to do just one thing – achieve that benchmark. This will take the idea of “teaching to the test” to an entirely new level. Programs with multiple positive social impacts will be undervalued (like housing which provides economic, educational, health, public safety, and quality of life benefits) while programs with high externalities will be overvalued  just as they are in the private economy (i.e. programs that improve outcomes in some areas at the expense of others.) What makes this all the more puzzling is that in other programs, the Obama Administration is promoting comprehensive, placed based approaches that seek multiple quantitative and qualitative outcomes through multiple interventions. I don’t understand why they would support a new funding scheme that drives in the opposite direction.

Second, will these bonds discourage collaboration because this funding approach places much more emphasis on which nonprofit should “get the credit” for the “success?  If a student’s test scores improve, who should get the credit and therefore the money? The school? The tutor? The afterschool program? The social worker who helped the student deal with early life traumas? The parents? The next door neighbor who helped with math homework? The Little League that gave her an opportunity to grow and mature and have fun? The library where she did her homework and used a computer? How much time and money do we want to spend sorting through all the possible reasons and their relative impact on the child so we can sort out who gets how much money?  Does that create a collaborative culture?

A third potential problem with this approach is that it may over-estimate our ability to identify the correct metrics and to measure them correctly. Long term data is very difficult to secure and causal relationships can be very hard to discern. In our quest for market clarity, we are certain to over simplify and choose metrics that are easy to collect, count and standardize, even if they don’t tell us the full story or even an accurate story.  This is particularly true when attacking complex, systemic problems such as educational and health disparities, environmental justice, or land use development.

A fourth problem is likely to be cream skimming. Organizations will have a powerful financial incentive to cherry pick the best clients that maximize their chances for hitting performance benchmarks. Supporters say that they can guard against this, but history shows that powerful financial incentives work – they will motivate performance but they will also motivate people to “screen” clients before enrolling them in programs.  And now we will have powerful investors pushing in this direction!

Fifth, advocates say these bonds will promote innovation, but I think it is much more likely that investment dollars will flow to safe, well-known, programs. New, untested ideas, will have a very hard time attracting investors – and those who are attracted may seek returns that taxpayers cannot afford.

I also wonder whether a Bond Market can really think about long term solutions. Will investors be willing to wait 5, 10 or even 20 years to see transformative impact? Or will they only be interested in programs that can achieve benchmarks within 1 or 2 years.  And if we are looking at long term impacts, do we have the ability to measure impact and causation sufficiently well to ensure that the right programs are getting paid? And how would we control for macro economic impacts that may cloud our ability to see the impact of individual programs?

Finally, a Social Impact Bond Market will undoubtedly become a massively complicated system as investors seek to bundle investments, guard against losses, shift risk to other parties, scale up, and otherwise replicate traditional investment markets. Lawyers, accountants, advisors and intermediaries will be needed and they will all need to be paid (handsomely, no doubt.) A program designed to save taxpayer money could easily end up costing far more. Remember, this program will leverage private capital, but at the end of the day, the taxpayer must pay for all the costs plus the profit or return. There is no free lunch and if investors start to lose money the bond market will dry up very quickly.

Everyone wants to fund “what works” and no one wants to pay for programs that don’t achieve real outcomes. But the world is complicated and it does not help to pretend otherwise. Positive social outcomes are usually the result of multiple interventions, programs and causes – including some that operate at the macroeconomic level that is far beyond the scope of a single nonprofit program. And performance metrics can only capture so much. When a new playground opens it may significantly improve the quality of life for children and families nearby. But will a new playground translate into measurable and statistically significant reductions in obesity? Or increases in family incomes? Or improved educational attainment?  Probably not. Does that mean we should stop ”wasting” money on playgrounds because the “don’t work?”

We absolutely need to fund programs that work. But my concern is that program evaluation is too important for us to dumb it down into numerical measures that Wall Street investors can understand but don’t tell us the true story of what is happening in our communities.  Instead, we need to build capacity in the nonprofit sector to conduct robust and meaningful program evaluation and to take advantage of new information technology that can improve our understanding of program impacts.  And we need to fully fund those activities. I fully support public-private partnerships and programs that leverage private investment (MACDC has filed its own legislation designed to do just that) but we have to be very careful how we design these programs less we suffer serious unintended consequences.

Posted in Innovation, Joe Kriesberg, Social Enterprise | 2 Comments »

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 | No Comments »

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 | No Comments »

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