Essays on People, Place & Purpose

Investing in What Works for America's Communities

Crossing Over to an Improved Era of Community Development

by Eric Belsky and Jennifer Fauth

This approach is similar to the one taken by BSC. Perhaps the city pilot that combines the most elements of this approach is the one now underway in Newark. This tests the idea of a “wellness economy” as a way to organize thinking about and planning investments. A central aim is to address the land and real estate needs for fresh foods, health care, and decent affordable housing. But it also features a municipal mechanism to align education, health, and social services planning with residential development.

Although the Integration Initiative does not focus as much on early childhood intervention and childhood education as others, it is clearly a place- and people-based strategy that emphasizes coordination, evaluation, and data-driven decisions about how to deploy resources over time.

NEXT Award Winners

The Wachovia Wells Fargo NEXT Awards for Opportunity Finance support innovative and effective CDFIs. Its winners underscore the growing number of CDFIs driving the kind of integrated, results-oriented approach to community development discussed in this paper as well as efforts to build capacity in areas where it is weaker.

The NEXT award program shows the extent to which the field is moving toward an integrative approach based on measurable impacts and results. The award winners underscore that the most important community issues and solutions vary from place to place but nevertheless offer models others can adapt and replicate. Take the Charter School Development Corporation in Michigan, which received an award for devising innovative ways to help charter schools fund their facilities in tough economic times, a model other communities in difficult economic straits can follow.

An award in 2011 also went to the Neighborhood Development Center in Minneapolis to recognize its important work in both bringing about economic development and measuring the results of its work. An award to the Progress Fund was made to support a regional partnership in Pennsylvania around small business development. And on the policy front, the Alternatives Federal Credit Union won an award for convincing the City of Ithaca and Tompkins County in New York to require any firm receiving funds from them to provide a living wage for all its employees. Like the work of the other awardees, their work establishes models others can follow.

Finally, Coastal Enterprises Inc. (CEI) won an award to support its national Working Partner Initiative aimed at partnering with organizations in rural regions to use NMTCs to fund projects with community benefit agreements. The latter are agreements that engage the community in determining the community outcomes that project sponsors must meet. CEI’s award reflects the increased focus on local capacity through partnerships with stronger regional players and to extend community development activities to the schools, clinics, and other nonhousing activities that NMTCs support. CEI, like several past recipients, lends to a range of investments including in community facilities to support education and health, affordable housing, and business development.

Harlem Children’s Zone

Harlem Children’s Zone (HCZ) has helped improve the communities in which it operates while also closing residents’ educational achievement and well-being gaps. It has measurable results to date. HCZ has been proclaimed as a “shining example of what is possible.”26 Credited with reducing the negative impacts of poverty in a part of Harlem, HCZ expanded from a purely educational program to a comprehensive community development strategy to address the deficiencies of a neighborhood block by block. Led by Geoffrey Canada since 1990, HCZ served more than 11,000 children and 10,000 adults in 2010.27 With a focus on early intervention and breaking the cycle of poverty, HCZ started with a single-block focus but now works in a 97-block area in Harlem.

Although HCZ is clearly a place-based strategy focused on a part of Harlem, the program is really a marriage of a people-focused and place-based antipoverty strategy. As Canada explains:

What we’re doing is not some kind of brilliant, eureka moment that we had when we figured out how to do this. We have been talking about these issues, providing comprehensive, integrated services to poor children since I was in graduate school…. So we just simply did it. We just decided that the time had come to actually put together all that the social scientists and the educators had been talking about for decades in approaching this problem.28

The initiative involves charter schools and some physical redevelopment of dilapidated housing and provision of affordable housing but centers on prenatal education, parent education, early learning, and education.

HCZ’s accomplishments are extensive and listed on its website, so we highlight only a few here.29 Its Baby College for training parents was successful in getting 86 percent of parents who read to their children fewer than five times a week to read to them more often. All third graders in its Promise Academy tested at or above grade level on the math exam, and they outperformed peers throughout the state. In 2008, 93 percent of ninth graders in its Promise High School passed the statewide algebra exam. In 2010–11, all 284 students in its high school afterschool program stayed in school, and 254 (90 percent) of its high school seniors were accepted into college. And its asthma initiative, which has served nearly 1,500 children, showed striking improvements 42 months after enrollment, with the share of emergency room visits of enrollees with a prior three-month period dropping from 46 percent to 15 percent.

A major factor contributing to the success of the HCZ is its commitment to people and focus on outcomes. As one of the first major nonprofits to establish a 10-year business plan, it has demonstrated empirical results and has adjusted programming and funding as needed to maintain and improve outcomes for participants. From these proven results, HCZ has been able to solicit funding from major foundations such as Goldman Sachs Gives and Google to expand its agenda and increase its impact. As President Obama said, “It’s an all-encompassing, all-hands-on-deck effort that’s turning around the lives of New York City’s children, block by block.”30 Moving beyond just a purely educational campaign, HCZ has expanded to include job training and computer workshops, nutrition classes and health clinics, and homeownership classes. Its current scope has many similarities with traditional community developers, despite very different roots.

Although acclaimed by many, HCZ is not without those who urge caution in interpreting its results. They have pointed out that the improvement in test scores in HCZ charter schools is only about average for other charter schools in New York City, even after adjusting for differences in student population. In addition, students attending HCZ charter schools but living outside the zone had test results that were on par with students living in the zone.31 Although this suggests that the many other community services provided in the HCZ had little or no effect on educational attainment, these services have produced other benefits for residents.32 Also, by trying to fight the systemic nature of poverty in Harlem, monitoring results, and adjusting its strategy, HCZ has shown that there is a different path than the status quo, giving the field a transformative example of how to approach community development.

Some have also questioned whether HCZ is too costly to be widely replicated and whether capital will be available to cover the costs of the high-touch approach part of its success. HCZ relied on a specialized source of capital (wealthy New York– based philanthropists) to pick up these costs. But pioneering efforts often are more costly than later replications because they involve much more trial and error. In addition, the social outcomes achieved in each case are impressive and just the sorts of outcomes social investors want to take to scale. On average, helping a child go on to college means hundreds of thousands of extra dollars earned over hers or his lifetime. In addition, it remains to be seen how much programs like these may save in the long run on other public expenditures like unemployment insurance payments, incarceration, remedial education, and health care for avoidable chronic disease. These public savings are bound to be substantial.

Purpose Built Communities

Similar to HCZ, Purpose Built Communities (PBC) envisions a “cradle-through-college” model that aims at closing the achievement gap in the East Lake neighborhood in Atlanta. Its aim is also to redevelop troubled real estate and offer community services and facilities to support the full range of needs of people in the community. Again, the data show it has succeeded in doing so. Originally started in 1995 as part of a HOPE VI public housing redevelopment project, PBC has expanded to eight cities and its network continues to grow. Its success suggests that a replicable model for closing the achievement gap is to redevelop rundown properties, mix moderate-income housing with low-income housing, and provide high-quality education and early learning programs.

The public housing in East Lake was a notorious haven for crime, drugs, and underachievement. Of 650 units, only 260 were actually occupied, with the rest boarded up or uninhabitable. Only 5 percent of fifth graders met state math standards and the school was last out of 67 in the City of Atlanta. Violent crime was at an all time high, and 87 percent of East Lake’s residents did not work. Fifteen years later, violent crime has dropped by 90 percent and 70 percent of the residents are now working. And kids are learning: 98 percent of fifth graders now meet or exceed state math standards, and the school now ranks fourth in the Atlanta public school system, despite the fact that nearly 80 percent of its students are sufficiently low-income to qualify for the free/reduced price lunch program. In 2009, more than 85 percent of eighth graders at the Drew Charter School in 2005 had graduated from high school.33 By 2011, 99 percent of the local school’s students met or exceeded state reading standards, and 94 percent met or exceeded math standards.

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