DECEMBER 2005
Preface

Across the country, there is a growing recognition of the impact that community economic development has on families and communities. This knowledge has spurred an increased interest on how to develop community economic development programs and organizations. While these thoughts and actions differ in scale, scope and design, developing and sustaining these interests and efforts require significant planning.

This brief is a part of a series of tools and technical assistance resources. It focuses on developing and sustaining community development corporations and other community economic development entities. The brief is developed by NCCED with support from the U.S. Department of Health and Human Services, Administration for Children & Families, Office of Community Service.

Introduction

Community development is the economic, physical and social revitalization of a community, led by the people who live in and around designated geographic areas of that community. Community development emerged as a field about forty years ago, as a grassroots movement to improve the quality of life for residents who most often live in low-income communities.

Community development has an unusual and challenging three-pronged mission.

1. Improve the economy of a community by increasing the income and wealth of the residents and stimulating private investments. Usually, there is significant emphasis on placing the assets and the economic fate of the community within the control of the residents.

2. Enhance the physical nature of the neighborhood, from its housing to its shopping areas, transportation, public spaces, and environment.

3. Strengthen the social bonds among the people in the neighborhood – their neighborliness; their readiness to collaborate; their willingness to support initiatives that would increase job opportunities; and to socialize with one another.

What is a CDC?

The term CDC refers to a type of non-profit entity known as a "community development corporation". Although there is no established legal definition for CDCs, they are characterized by their community-based leadership and their work primarily in housing production and/or job creation. This is what differentiates them from other types of non-profit groups.

CDCs are formed by residents, small business owners, congregations and other local stakeholders to revitalize a low- and/or moderate-income community. CDCs typically produce affordable housing and create jobs for community residents. Jobs are often created through small or micro business lending or commercial development projects. Some CDCs also provide a variety of social services to their target area.

According to a national census of CDCs conducted by NCCED in 1998, there are an estimated 3,600 such groups across the United States. Data from this census noted that since the emergence of the first CDCs in the late 1960s, they have produced 247,000 private sector jobs and 550,000 units of affordable housing.

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