Real Estate Initiatives foster both ownership and leadership opportunities for low-income people. They may be for housing, business, commercial, or industrial uses. Legal structures, like community land trusts or limited equity cooperatives, are used to balance asset ownership and ongoing decision-making. Tenants often develop their own assets and participate in governance. The larger community benefits from a productive asset and enhanced civic participation. Typically, permanent affordability is maintained for future tenants and an organizational forum is built for a diverse group of community leaders.
Business Incubators and Marketplaces provide a facility and ongoing support for small business development. They bring low-income entrepreneurs into a peer group relationship for the purposes of developing and operating their businesses. The member-businesses may reflect the local culture of the respective community. All businesses benefit from shared services that create efficiency in both planning and operations. Incubator businesses work together until they have reached a level of stability that allows them to leave the facility. Marketplaces rely on peer support and may also incubate businesses, but here, the emphasis is on developing a growing base of customers in one shared location.
Community Development Financial Institutions, such as community development credit unions, loan funds, and community banks—commonly known as CDFIs—help low-income people, community-based organizations, and businesses by providing financing for community development. These organizations also often provide technical assistance to help borrowers prepare for loans and maintain their timely repayment.
Social Purpose and Training Businesses combine on-the-job training with the operation of a profit-making enterprise. These EDIs provide employees with good income and opportunities to develop assets. Their focus is on the development of a business that has an integral, on-the-job training component that may open up the possibility of placement in other mainstream businesses once workers have acquired certain skills. Community-based organizations that work with disadvantaged populations experiencing multiple barriers to employment may develop these businesses to promote participatory control and decision-making.
Worker-Owned and Community-Owned Businesses have ownership and organizational structures that create both income and assets for low-income people. Ownership may be held by workers, a community-based organization, or in a form that combines both. Over the past ten years, most of the applications received by CCHD for this EDI type have focused on paraprofessional healthcare, child care, cleaning, and craft production. In recent years, an increasing number of applications have been presented for temporary employment businesses.
The program has two main goals:
1. to support low-income people as they empower themselves through the creation and operation of economic development institutions
2. to develop alternative economic structures that effect equitable access to income and a just balance of individual- and community-held assets.
To be considered for funding by CCHD, an applicant organization must demonstrate that it is committed to both goals. Priority will be given to eligible applicants that address one or more of the following four priorities:
1. to advance economic development models that enhance the scale of impact through replication or the transformation of an established model
2. to encourage collaboration that generates cooperation and solidarity among diverse groups in the interest of a more integrated and mutually understanding society
3. to link economic development with community organizing so that beneficiaries work together and with others on additional efforts to effect institutional change
4. to facilitate the development of information systems in organizations that enhance planning, accountability and mutual learning by organizations and by CCHD.
CCHD has developed criteria and guidelines to ensure that the goals and priorities of its Economic Development Program will be respected and fulfilled through its funding efforts. The criteria are used on a required basis to evaluate whether an applicant is committed to both of the EDP goals and therefore can be considered for CCHD funding. The guidelines are used on a recommended basis to assess the strength of an Economic Development Institution presented by an applicant organization.
▪ Members of the poverty group must have a strong voice in the leadership of the applicant organization. At least one-third of those who plan, implement, and make policy for the applicant organization (usually the board of directors) are low-income.
▪ The application must focus on an Economic Development Institution that will create income and/or assets for low-income people and communities.
▪ At least one-half of the intended beneficiaries from the EDI must be low-income.
▪ The applicant has a complete plan for the EDI that documents all three of the components listed below:
1) An assessment and analysis of pertinent community needs, resources and regional economic conditions that establish the EDI's strategic direction
2) A clear, comprehensive, and detailed strategic plan that establishes how the EDI will develop and operate over the next three to five years. This component must include
▪ Program description with goals, objectives, and the anticipated outcomes for job creation and/or asset development (see Guidelines, below)
▪ An EDI ownership structure that results in asset ownership within the low income community
▪ A multi-year financial strategy for the start-up and ongoing viability of the EDI.
3) A commitment and strategy for ongoing leadership development on the EDI Board of Directors, at least one-third of whose membership is composed of low-income people.
▪ Matching funds—in addition to any in-kind contributions—are committed to the EDI at a level at least equal to the request for CCHD funds.
CCHD has established the following threshold outcomes to ensure its funding will be directed to EDIs that have the potential for substantial job creation and/or asset development within their communities.EDIs in underserved or distressed areas of the country (e.g., some rural and reservation communities) may receive special consideration, determined by regional standards.
EDIs must create ten or more new jobs that pay a living wage as determined by regional standards, or must develop asset ownership for more than ten individuals or families while also benefiting the larger community.
The EDI plan needs to relate the anticipated outcomes for asset development to the specific economic conditions of the EDI's community.
An application should establish that its EDI team—staff, consultants, institutional partners, and board—has the organizational capacity needed to ensure implementation.
An applicant organization should demonstrate a growing base of support (both financial and/or in-kind resources) that reflects valuable relationships in the community.
Priority to encourage collaboration
An applicant organization should describe how it collaborates or plans to collaborate with other organizations in the course of implementation.
An applicant organization should demonstrate a willingness to participate in CCHD's education and promotion efforts.
Priority to link economic development with community organizing
An applicant organization should describe how it will use or promote community organizing among the EDI's beneficiaries so they could work together and with others on additional efforts to effect institutional change.
Priority to facilitate the development of information systems in organizations
An applicant organization should develop and regularly use a monitoring and evaluation system that relies on the active participation of beneficiaries and leads to increased EDI capacity and performance.
An applicant organization should establish an interest in sharing data with other organizations (including CCHD) for the purposes of peer support and mutual learning.
Eligible Use of Funds
CCHD funds may be used for general operating expenses, including staff salaries/training, procurement of technical assistance, board development costs and other overhead costs.
For business development, CCHD funds may be used as part of a financing package for start-up or expansion, including start-up costs or working capital.
For real estate development, CCHD funds may be used for pre-development or continuing operating expenses.
Funds may not be used for capital expenditures (e.g., real estate, vehicles, equipment).
Not Eligible for Funding
Economic Development Institutions structured without opportunities for participatory control and ownership by low income people
EDIs structured without opportunities to develop community-held assets (e.g., sole proprietorships, simple partnerships, or fee-simple housing projects are not eligible)
EDIs owned or controlled by governmental agencies (federal, state, or local), educational, or ecclesiastical bodies
EDIs whose primary focus is direct service (e.g. job training, business consulting, financial literacy, savings programs, or homeownership education programs by themselves are not eligible). Such services may complement an eligible EDI, but they cannot be the EDI's primary focus.
EDIs not structured to stand on their own as sustainable institutions
EDIs that intend to re-grant CCHD monies to other organizations.