Project Community
Center for Urban Policy Research
This section concerns the need for, and the expected impacts of, the Nonprofit Financial Assistance Fund.
Support for Community-based Nonprofit Organizations
Community-based housing and economic development organizations (CDCs) have become the state’s "third sector" alongside government and private industry trying to address New Jersey’s affordable housing and neighborhood revitalization needs. The number of such organizations in the state is over 150. They work to bring housing, support services, and new, job creating enterprises into local neighborhoods. The constituency served by community-based developers are people generally not served by the for-profit sector, such as low-income working households, single-parent families, the homeless, the elderly, the disabled, and other special needs populations. Their long-term goals are to promote individual empowerment and self-sufficiency among those they serve, as well as revitalize neighborhoods and communities.
In recognition of their accomplishments and to compensate for decreased federal spending for housing and economic development, many state and local governments looked to nonprofit organizations to meet their community development needs. CDCs have answered this call for help and their success mirrors the performance of their national counterparts. New Jersey’s CDCs have produced 10,000 affordable units in the past twenty-five years and their capacity is expanding. They are currently producing about one-third of the affordable housing built annually in New Jersey.47
The multiple needs for low-cost housing and stable well-paying jobs create a large agenda for CDCs, which must complete this work often with inadequate budgets and small staffs. Fund-raising is vital to the survival of these organizations but it often diverts organizational resources from development projects. Federal funding sources for many of the community revitalization programs on which CDCs depend, are threatened with severe cutbacks. Much of the funding CDCs receive does not finance routine operating expenses. CDCs need additional sources of financial assistance if they are to continue their success and help the state and municipalities achieve their goals of creating more affordable housing and economic opportunities.
Capacity building of nonprofit housing development and community economic development corporations is a priority. Revitalization of distressed neighborhoods depends on existence of these organizations. CDCs must be supported to enable them to operate efficiently, effectively, and be accessible to the populations they serve.
Nonprofit Financial Assistance Fund
The goal of the Nonprofit Financial Assistance Fund is to increase the capacity of nonprofit community development corporations (CDCs) to build on their track record in housing development and spur innovative economic development projects. This $9 million fund expects to support sixty community-based organizations engaged in affordable housing production and economic development with average annual grants of $50,000 for three years to bolster staffing and access professional support.
Impacts
The Nonprofit Financial Assistance Fund will have its greatest impact by operationally sustaining CDCs and allowing these organizations to expand their capacity to produce more housing and start additional economic revitalization projects. This Fund will build upon the CDCs proven track record for increasing affordable housing production and providing support for economic development projects in communities that need them. These community-based organizations utilize resident input in their mission to improve the economic and social conditions of the people in their neighborhoods. The following are examples of successful projects done by CDCs which could be sustained and expanded by this fund.
A national model of the CDC industry is based in Newark, New Jersey. The New Community Corporation has received widespread recognition for the economic development success it has achieved in that city, which contains some of the state’s poorest neighborhoods. A partial list of New Community’s accomplishments includes over 2,500 units of housing, several day-care centers, an extended-care nursing facility, the rehabilitation of a former church building for office and restaurant space, and a center for employment and training. Among its significant achievements has been to bring a Pathmark supermarket to Newark’s Central Ward, the first such opening since the 1960s. This supermarket employs many local residents and is considered to be one of the most profitable Pathmarks in the country.
Throughout the state, flourishing CDCs, producing housing and engaging in community revitalization, abound. Isles, Inc. is a CDC located in Trenton and has become a major actor in local revitalization efforts. This organization has produced seventy-two units of rental housing for low/moderate income households, operates sixty-five community gardens, rehabilitated a factory for office space and housing, and is currently conducting research for the state and the federal government on neighborhood-based abatement strategies for environmentally contaminated, or "brownfield," sites in Trenton.
Several other examples include the following. Moorestown Ecumenical Neighborhood Development, Inc. (MEND) in Moorestown has added over 200 affordable units to the area for seniors and low-income families by converting closed school and fire house buildings, rehabilitating deteriorated structures, and constructing new housing. Tri-County Community Action Agency in Bridgeton, which serves Cumberland, Gloucester, and Salem counties, has developed over eighty-four affordable units for low income families, is developing a 125-unit senior citizen complex and is converting a former YMCA and an old warehouse into a community and recreation center. Tri-County also runs an array of human services programs such as weatherization, a food bank, and child care. In New Brunswick, Renaissance Community Development Corporation, associated with the First Baptist Church, is working with area residents, state agency representatives, local officials from that city and neighboring Franklin Township, and business leaders and social services agencies from New Brunswick Tomorrow to implement a comprehensive planning effort known as Renaissance 2000 to revitalize distressed neighborhoods along the Rt. 27 corridor. Renaissance recently purchased the former Home News building to center its community economic development activities and has just executed a lease with St. Peter’s Medical Center, which will open an adult and pediatric clinic.
Assistance to CDCs through this fund would help these organizations to pursue development projects which could result in financial impacts beneficial to the local communities in which they operate and the state. Such impacts could include: new jobs, additional affordable housing units, restoring abandoned properties to local tax rolls, and increasing local and state revenues.
The state government plans to utilize the capacity, knowledge, and status CDCs have gained in communities in implementing the Governor’s Urban Strategy.48 Under this plan, the state would collaborate with CDCs and the private sector to develop coordinated and comprehensive community-based solutions to neighborhood problems. The fund could further this effort.
Support from the Nonprofit Financial Assistance Fund would meet some of the organizational needs of CDCs described by the Affordable Housing Network, such as trying to retain qualified staff and gain predictability in fundraising and budget planning.49Grant support would also enable CDCs to explore the development of new initiatives which normally are not compensated until the project qualifies for some form of development funding.
Grants from the Nonprofit Financial Assistance Fund would also help to meet some waiting list demand for capacity-building support from organizations seeking funding through DCA’s Performance Grant Program and the federal HOME program’s operating grants for community housing development organizations (CHDO). As of state fiscal year 1995, only 32 of more than 150 CDCs were funded by these two programs in New Jersey. This fund would more than triple the number of organizations served. It would also institutionalize a partnership between the state and its nonprofit community organizations.
Capacity building of nonprofit housing and economic development organizations will ensure that comprehensive programs can expand into communities that are underserved. This funding will also ensure that these programs are sustained in communities that need more than just housing. Nonprofits have proven effective in making a difference in communities. Building the capacity of such organizations will help to achieve both the short- and the long-term housing and economic development goals for all communities in the state of New Jersey.
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