Community economic development is a process that aids a community to garner and use resources to attract capital to increase commercial and business development and employment opportunities for its residents. The Community Economic Development (CED) program, under the U.S. Department of Health and Human Services (HHS), supports projects that build and expand local enterprises, create career opportunities with upward mobility for low-income individuals, and facilitate economic growth in communities that need it most.
Every year, the Office of Community Services (OCS), which administers the CED program, submits a report to Congress on the CED program identifying performance outputs, such as the number of grants made, businesses assisted, jobs created, and funds leveraged. Beyond the numbers, though, there are important stories to recount of the recipient organizations and their projects—stories that illuminate why some projects succeeded and others did not. The themes and lessons that emerge inform how the CED program will assess future community development efforts so that grant funds can be responsibly awarded to projects with innovative ideas and solid business plans. Lessons from the Field captures the stories of 10 projects implemented across the country, in both urban neighborhoods and rural areas.
Each of the 10 projects recently completed its grant cycle within the past two years, making fresh stories from which to learn. Not all of them succeeded as expected; some had to make changes and others were not able to make a long-term go of it.
Nonetheless, the stories put a human face to the numbers and address questions that cannot be answered by statistics. How did these nonprofit groups, for example, make connection with the private sector businesses to achieve the job growth expected by the program? What types of projects worked? Were the projects, typically small in comparison to the needs of the communities affected, able to pivot and make adjustments when larger trends, such as the national economic recession of 2007—2009, affected their local economies and partners? What can be learned from the successes—and failures—of the recipients?
Most of the 10 projects succeeded in creating the jobs originally proposed by the community development corporations (CDCs) that applied for the funds and in leveraging funds to implement the projects. The success of the CDC projects validates the early belief by the CED program that CDCs are uniquely placed at the intersection of community need and private sector ingenuity to bring jobs to low-income neighborhoods. For example, the Jamaica Plain Neighborhood Development Corporation in Boston was able to bring 500 new jobs to its community through a major historic preservation project. Milwaukee’s Northwest Side CDC assisted a defense contractor in improving an industrial facility within the CDC’s neighborhood, bringing new jobs to the community within that plant and created a new, spinoff incubator. The Lakota Fund in South Dakota’s Pine Ridge reservation, through its loan fund—the only private lender on the reservation— helped local entrepreneurs create jobs through several growing small businesses.
The CED Program
From its beginning, the CED program was highly targeted to help nonprofit, community-based organizations undertake job-oriented developments. This focus recognized the innovation and community commitment among the growing movement of CDCs. CDCs are community-based, private, nonprofit organizations with experience in planning, developing, or managing low- income housing or community development activities with the purpose of revitalizing urban and rural communities. The premise was that these organizations could effectively spur job growth in some of the lowest income, urban neighborhoods and rural areas by investing seed money in businesses or by providing real estate needed by businesses in these communities.
Community economic development is a crucial component to helping low-income families succeed in their communities. Unlike programs that support families by providing cash assistance or program services, community economic development strengthens families and communities by creating jobs that employ local low-income individuals and strengthen the community by growing revenue that stays within the community. The CED program does this through the support of CDCs.
The success of the CED program is due, in large measure, to partnerships with other public and private organizations that 1) also invest in the projects, 2) collaborate to refer and support potential employees, and 3) provide community support to CED development projects. The CED program is designed to leverage other private and public dollars, build community ownership and investment, and revitalize communities through physical improvements and increased income from business/ job creation. As a result, low-income individuals have more employment opportunities in the community and are able to better support their families and become more empowered and invested in the communities in which they live.
This page is a part of the CED Lessons from the Field resource. To learn more and explore the case study library, go to CED Lessons from the Field.