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

Still, community developers and CDFIs will have to continue to innovate and further develop, refine, and disseminate promising models like those discussed in this paper. Indeed, many of the most important sources of finance for community development emerged from successful experiments at the local level. Initiatives that sprung up spontaneously in local communities were later supported by the foundations, and several led to important federal policies, programs, or the emergence of national intermediaries. Examples include the CRA, which was modeled after ordinances in Chicago; the creation of NeighborWorks, which started with Federal Home Loan Bank officials taking notice on a field trip of the first Neighborhood Housing Services; the CDFI Fund, which was created to support CDFIs that sprung spontaneously in response to local problems; and Enterprise and LISC, which grew out of foundation support of successful local initiatives.

In all cases, the field can benefit from drawing on lessons learned from successful efforts. As detailed above, early childhood interventions can have dramatic impacts, and while the evidence of the value of job training and other employment-related services is less compelling, when it is combined with housing assistance, it seems to make a real difference. And daily we can see the value of improving schools, rehabilitating substandard housing, reducing housing costs, providing access to health care and job training, and improving public safety. Although it is less clear how much elements like these may work together to create synergies, there are reasons to believe that they do and the Integration Initiative and others are hunting to find and quantify them if they do.

Although the goal of comprehensive community development remains elusive, several organizations and initiatives have made significant progress in identifying the features most likely to lead to successful outcomes. In some cases, the successes have been spectacular, as in the rebuilding of the South Bronx and the turnarounds in East Lake and the Harlem Children’s Zone. These successes demonstrate the value of concentrated public investment when administered by strong lead organizations and supported by national intermediaries, foundations, and state and local agencies. Success requires the very active participation of the community and coordination among multiple nonprofit service providers, community developers, government agencies, the business sector and financial institutions.

Nevertheless, launching truly multi-focused, integrative initiatives is costly, and the road map for doing it right does not yet exist. This is why LISC, Enterprise, Living Cities, and others are all investing now in pilot projects to understand what makes integration strategies effective and efficient.

Although actively pursuing and integrating both people- and place-based interventions is the aim, achieving it will usually require smaller first steps. It is impractical, and probably ultimately undesirable, to try to devise extensive plans initially rather than strategically make choices about initial areas of focus that can later serve as the foundation for other work. For example, Harlem’s Children Zone started with a strong community center that was placed in a public school. It then branched to supporting the classroom experience of the school during the day and then launched a truly integrated approach but on a single block. As they gained experience and documented success, they were able to expand the zone beyond that block. Likewise, Purpose Built Communities started with a vision of what it takes to spark community development focused deliberately on both people and place.

It makes sense to take a page from these two playbooks and focus on two or three important initiatives first to anchor future efforts. Nonetheless, although community development can start from different entry points, ultimately it must attend to a broad range of community needs, from physical redevelopment to public safety, from community organizing to improving resident access to quality schools, child care, job training, health clinics, and elder care.

Finally, ensuring that the community’s voice is heard and incorporated into plans and activities is critical. As holistic approaches increasingly emerge and as efforts to create replicable models gain momentum, there is a risk that the voice of the community itself will get lost in the cacophony of partners, as well as in an evolving confidence among practitioners that they have settled on the interventions that matter most. Although successes provide direction and guidance on tough issues, the field must avoid a one-size-fits-all approach to addressing poverty. Instead, it is critical not to lose sight of the importance of crafting strategies that address the political realities, institutional capacities, and specific needs and wants of widely varying communities.


The authors would like to thank Nancy Andrews, David Erickson, and Ellen Seidman for their thoughtful comments and their dedication to community development. They embody the best the field has to offer. We would also like to thank Mark Pinsky and David Wood for their review and comments.

  1. Ronda Kotelchuck, Daniel Lowenstein, and Jonathan N. Tobin, “Community Health Centers and Community Development Financial Institutions: Joining Forces to Address Determinants of Health,” Health Affairs 30 (2011): 2090, 2093.
  2. Annie Donovan, “Subsidy and the Charter School Facilities Finance Market.” In Smart Subsidy for Community Development (Boston: Federal Reserve Bank of Boston, 2011), p. 57 n9.
  3. Community Development Financial Institutions Fund, “Certified CDFIs as of June, 30 2012,” available at
  4. See CDP Publication Committee, “Fiscal Year 2007 Data.” (Philadelphia: CDFI Data Project, 2007), available at Just 508 CDFIs surveyed for the OFN’s CDFI Data Project reported total asset of $25.5 billion in 2007. The capitalization of the CDFI has surely increased significantly since then and there are at least several hundred CDFIs that were not surveyed. A recent report by the CDFI Fund and the Carsey Institute found that loan funds they surveyed doubled their assets from 2006 to 2009, credit union CDFI median assets soared by 38 percent from 2005 to 2010, and bank CDFI median assets of 8 percent from 2006 to 2010. Michael Swack, Jack Northrup, and Eric Hangen, CDFI Industry Analysis: Summary Report (Durham, NH: Carsey Institute, Spring 2011), available at
  5. See Alexander von Hofmann’s piece in this collection.
  6. Crittenton Women’s Union, available at, and Harlem Children’s Zone, available at
  7. For an excellent summary of the history of CDCs, spanning back to their inception with an effort led by Robert Kennedy to create and fund them through amendment of the Economic Opportunity Act, see Alexander von Hoffman’s piece in this volume.
  8. Christopher Walker, Community Development Corporations and their Changing Support Systems (Washington, DC: Urban Institute, 2002), available at
  9. Nancy Andrews and Chris Kramer, “Coming out as a Human Capitalist,” Community Development Investment Review 5 (3) (2009): 47-65, available at
  10. Health Affairs 30 (11) (November 2011), available at
  11. See Jens Ludwig et al., “Neighborhoods, Obesity, and Diabetes — A Randomized Social Experiment,” New England Journal of Medicine 365 (2011):1509–1519. The study found about a reduction of about one-fifth among women with children with vouchers that moved to lower poverty communities under HUD’s Moving to Opportunity program when compared to women who were not randomly assigned to this group.
  12. In fact countless studies over the past several decades have demonstrated the correlation of poverty, housing instability, crime, low-performing schools, chronic health problems, environmental concerns, and limited access to nutritious foods. See S.C. Saegert et al., “Healthy Housing: A Structured Review of Published Evaluations of US Interventions to Improve Health by Modifying Housing in the U.S., 1990-2000,” American Journal of Public Health 93 (2003): 1471–1477. See also Dolores Acevedo-Garcia, “Housing as a Platform for Health,” paper presented at How Housing Matters Conference, November 2, 2011. See also Alice Park, “Change Your Neighborhood, Improve Your Health,” Time, October 20, 2011. Available at; Jens Ludwig et al., “Neighborhoods, Obesity, and Diabetes: A Randomized Social Experiment,” New England Journal of Medicine 365: 1509–1519, available at; MacArthur Foundation, “How Housing Matters,” available at
  13. Leslie J. Calman and Linda Tarr-Whelan, Early Education for All: A Wise Investment (New York: April 2005), available at
  14. Howard S. Bloom et al., Public Housing: The Effectiveness of Jobs-Plus (New York: MDRC, March 2005), available at
  15. A 2011 report sponsored by the Rockefeller Foundation, “Impact Investing: A Framework for Policy Design and Analysis,” found that government and foundation support alone will be insufficient to fund all of the needed community programs in the future, but that “[p]olicy in impact investing catalyzes viable private markets for social goods.”
  16. A 2009 Monitor Institute report estimates that even a 1 percent share of total investment by 2020 “would create a market of about $500 billion. Such scale would create an important supplement to philanthropy, nearly doubling the amount given away in the U.S. alone.” Jessica Freireich and Katherine Fulton, Investing for Social and Environmental Impact: A Design for Catalyzing an Emerging Industry (New York: Monitor Institute, 2009), available at
  17. See David Erickson, The Housing Policy Revolution: Networks and Neighborhoods (Washington, DC: Urban Institute Press, 2009), Chapter 2, and Alexander von Hofmann, House by House, Block by Block: The Rebirth of America’s Urban Neighborhoods (New York: Oxford University Press, 2004).
  18. For more information see
  19. They are doing this, for example, by coordinating activities through the National Community Stabilization Trust and working together on the Mortgage Resolution Fund which is aimed a purchasing distressed notes and modifying loans to keep owners in their homes.
  20. Community Development Financial Institutions Fund, “Certified CDFIs as of June, 30 2012,” available at
  21. As Living Cities argued “[w]hat [is] needed in the neighborhoods [to] marry national and local funding with technical competence and neighborhood enterprise and responsiveness— something that mount[s] a broad assault on the multiple interlocking problems of these neighborhoods.” Living Cities: The National Community Development Initiative, 2001.
  22. New York Acquisition Fund, available at
  23. See for example John F. Sugg, “From Public Housing to Private Enterprise,” Urban Land (March/April 2011): 90–93.
  24. LISC, “Our Work: Building Sustainable Communities.” Available at
  25. Building Sustainable Communities: A Progress Report on Meeting LISC’s Next Generation of Challenges and Fulfilling the Promise of Community Development (Chicago: LISC, 2009), p. 3.
  26. Nicholas D. Kristof, “Escaping from Poverty,” New York Times, March 24, 2010. Available at
  27. Harlem Children’s Zone, 2010-2011 Annual Report.
  28. “Harlem Children’s Zone Breaks Poverty Pattern,” National Public Radio, July 28, 2009. Available at
  29. Harlem Children’s Zone, “Our Results.” Available at
  30. Barack Obama, “Remarks by the President at Urban and Metropolitan Roundtable,” July 13, 2009. Available at
  31. Grover J. Whitehurst and Michelle Croft, “The Harlem Children’s Zone, Promise Neighborhoods, and the Broader, Bolder Approach to Education.” (Washington, DC: Brookings Institution, 2010), available at
  32. The report produced by the Brookings Institute also found that educational advantages of the HCZ end in middle school and that the complementary community services.
  33. East Lake Foundation, “East Lake Then & Now.” Available at
  34. Bayou District Foundation, “Education.” Available at
  35. Tim Evans, “Buffet Tackles Urban Redevelopment Challenge,” USA Today, September 30, 2011. Available at
  36. See David Erickson, “Advancing Social Impact Investments through Measurement Conference: Summary and Themes,” Community Development Investment Review 7 (2) (2011), available at
  37. See Thomas A. Bledsoe and Paul Weech, “International Housing Partner Exchange,” Community Development Investment Review, 7 (1) (2011), available at

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