September 30, 1996 - From the September, 1996 issue

A National Effort To Leverage CDC’s And Renew Urban Center Cities

Peter Goldmark, the distinguished president of The Rockefeller Foundation, is a respected and thoughtful voice in shaping America’s urban policy. He is familiar with the Southern California urban landscape—he was senior vice president of the Times Mirror Company from 1985 to 1988. Anita Landecker is the Western Region vice President of the Local Initiative Support Corporation (LISC), which has provided financial and technical assistance to community development corporations throughout the nation. Both are involved with the National Community Development Initiative (NCDI).

Los Angeles’ LISC has recently received accolades for its ability to leverage a $5.5 million investment from NCDI, a collaboration of philanthropic and corporate investors, into $198 million in grants, loans and equity. NCDI has invested $150 million in Urban Communities throughout the United States. TPR is pleased to present an interview with Peter Goldmark Jr., and Anita Landecker. 


Anita Landecker: “I do think the successes we have seen from CDCs are a real lesson. They have a practical way of looking at problems—a focus on tangible results and in the best of cases, an accountability to the community they are serving.”

Mr. Goldmark, what are foundations—such The Rockefeller Foundation—trying to accomplish through investing in the National Community Development Initiative (NCDI)? Arresting urban blight, community capacity building and neighborhood renewal are the terms associated with NCDI, but please elaborate for our readers your foundation's understanding of NCDI's mission. 

Peter Goldmark: It is a very clear concept, and I am going to put it in very stark terms to distinguish it from a number of the other important programs the foundation supports. NCDI's purpose is to take a concept that has already proven itself as a powerful force for renewal in our central cities and help mobilize the resources to take it to scale. It is not an attempt to invent a better mousetrap. 

Often, a foundation supports a demonstration, environmental project or pioneering activity. Foundations are really vehicles of social venture capital. However, I feel that foundations also have an obligation to help make sure that what has already been proven effective has an impact. That means taking it to scale. 

The NCDI was formed by a group of funders. After looking around the urban landscape, we find that community development corporations (CDCs) have taken root, and are affecting change. CDCs have become vital instruments for neighborhood renewal. We want to see more of them, and we want to see them become more effective. 

We do not want to get into doctrinal disputes about the "right" approach to addressing urban blight. Rather, we want to help this existing movement, which has proven to be durable and effective, go to the next level. 

As the foundations which gathered together in Southern California this summer consider a third round of investment in NCDI, what constitutes success for them? For example, have model CDCs arisen that you would like to see replicated?

Peter Goldmark: If I define the task as increasing the scale of the CDCs, the first model of success is helping CDCs extend themselves in our inner cities. That means more CDCs, particularly in places where the traditional sources of assistance and economic development have had trouble taking root. 

The second major milepost would be helping CDCs become more effective. In 1996, that means increasing their capacity to handle capital acquisition and renewal tasks, such as housing and commercial shopping, day care centers, etc. This effectiveness also means helping the CDCs forge the link that many of them are now building with social service agencies, job training agencies, and in some cases, even anti­crime networks. 

The key is extension—helping the idea spread to places where it has not yet taken root and helping the existing or newly-created CDC become more effective. 

Since NCDI has been working nationally with just two intermediaries, LISC and the Enterprise Foundation, share with us the particular approach that LISC has been employing to carry out the objectives of NCDI funders? 

Anita Landecker: Different places respond in different ways. In L.A., we started by using the initial loan money to help finance affordable housing in a collaborative way. We helped it leverage eleven other funders in this city to form the Los Angeles Collaborative for Community Development to provide operating support and training for CDCs. 

The Collaborative started with seven CDCs and we now have fourteen. LISC was able to raise $7 million locally, the largest amount of money ever raised in L.A., to provide operating support for CDCs. If you track the groups over time, they have produced over 2,000 units of housing. LISC’s ability to provide operating support, and loan money with advantageous terms, makes this healthy development. 

In the beginning L.A. LISC focused primarily on affordable housing. Through the second round of NCDI funding, CDCs were able to expand their effectiveness and reach in the community. The new program involved both the creation of new jobs and better delivery of services. It came as a part of LISC's response to the civil unrest. We worked with CDCs and industry leaders to identify economic sectors that showed potential growth and job opportunities for their constituencies. Through a sectoral analysis of growth industries, the Health Sector Initiative (HSI) was born. 

Although this was new initiative for LISC, CDCs were interested in the health sector even before the health crisis in L.A. County. The second round of NCDI funding focused on developing health clinics and training programs in four selected communities with four CDCs that are ready to move to the next level by working in a different area and expanding their activities. 

The CDCs were already beginning to do something in the health care arena. HSI, with NCDI funds, helped them finance their work. We provided, in this case, operating support through grant money and loan money for facility development. 

The New York Times has been running a series of articles and editorials this summer critiquing the concept of enterprise zones as a successful urban economic incentive program. Would you comment on the success to date of federal urban policies and strategics and how the foundations and NCDI are either building upon governmental efforts to date or pursuing a new or different programmatic approach? 

Peter Goldmark: At this point it is difficult to say. Essentially, the enterprise zone policy and program really has to prove itself. We have a history in this country of demonstrations or geographically-focused intensification efforts from the federal levels. When looked at together, over the past several decades, enterprise zones have a mixed record at best. 

The opportunity for CDCs, given that money is going to begin to flow, is to take advantage of these zones, which are the biggest game in many cities in the U.S. for years to come. 

The smart and able CDCs will get into that game and play it in ways that support their particular values and take advantage of their particular comparative strengths. 

After six years of NCDI investment in urban economic growth, have the foundations been able to influence or impact federal urban policy. For example, do the programs of HUD reflect the successes of the CDCs helped by NCDI funds?

Peter Goldmark: The biggest single connection between CDCs and national policy has evolved in two forms. First, and for the first time, the federal government, through HUD, has actually become a member of a National Community Development Initiative. 

Henry Cisneros said that this collaboration makes sense and he wants to be a part of it. He has told us that it is the only forum he knows of where HUD sits as part of a partnership which together makes specific funding decisions. HUD does not have any level of influence over the specific programs or the funding. 

The other major intersection in terms of national policy and the federal government was the renewal of the Low Income Housing Tax Credit. That was severely influenced by the community development movement and the two national intermediaries, USC and the Enterprise Foundation. 

That represented a realization by many members of Congress that this is a successful process of change and the CDCs are vehicles of local initiative and investment that we cannot afford to leave without support. To continue the low income tax credit may be one of the single highest leverage tools at our disposal. 

Anita, can you address the issue of how difficult a paradigm shift it is for LISC to move from primarily focusing on non-profit housing development to the seemingly more complex programmatic focus of community empowerment, capacity building, and economic development? 

Anita Landecker: LISC works with CDCs to foster development in their neighborhoods. One component is housing. LISC is, however, involved in community building activities like child care, retail development, community safety, leadership training and other efforts to build healthy communities.

The perspective you and I see most often is L.A.; however we also work in other places. Our perspective is quite different in other geographic locations. In Phoenix, for example, we are working with several community-empowered neighborhood organizations that are trying to develop housing. In some places we were just focused on commercial development. 

In L.A., housing development is a vehicle that CDCs use to improve their communities and also have the financial support to accomplish their mission. In housing we were able to use tax credits and development fees to support their operating costs.

As I mentioned, we are able to use NCDI money to help support CDC efforts to improve the health care delivery system in their neighborhoods. The strategies vary from developing primary care facilities in partnership with local hospitals to training community health care workers. 

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In terms of jobs, LISC has focused on a few areas. We do not try to solve the whole problem. Rather, we take a few areas and work with interested CDCs to see if we can be successful in those areas. 

We have a relationship with the Center for Employment Training in L.A. We are talking to Rebuild Los Angeles about how CDCs can participate in their manufacturing network.

In the next round, when we apply for NCDI money, or money from any other foundation, we will focus on helping CDCs broaden their reach. We have to create a market and show how CDCs can be a benefit in a variety of different areas. There is no magic solution. The hardest part is figuring out how CDCs can make money from these ventures to support themselves rather than being completely reliant on foundations.

What are your thoughts Mr. Goldmark on the state of civic life in our local communities nationwide? Increasingly, the common perception is that there is a withering away or civic participation and civic leadership. Have the globalization of our economy and the information revolution doomed the role of all intermediaries in the civic life of our cities?

Peter Goldmark: We are coming out of an old social contract in the U.S. that was forged at the time of the New Deal under President Roosevelt and fundamentally amended by the civil rights revolution in the sixties. We learned during the Reagan years that a social contract no longer serves us very well. Most people see disfunction and inadequacy. 

We have not yet found a new social contract. What is the new set of obligations and responsibilities about how we work, how we make our schools work and how we assure the safety of our neighborhood? One of the things that we will have to find, as part of that new social contract, is what the very local institution is, so that we citizens can tum to it to work out some of these fundamental questions. 

Is the forum only the Internet and talk show radio? I doubt it. We are going to need face to face contact and communication. In some areas you see the rebirth of things like the town meetings. 

Although we hear much talk about the decline and disappearance of local civic institutions, one positive emerging institution is the local church. In the long run that is a hopeful sign. 

The new institutions are going to be found increasingly often in our workplace. Americans are getting more of their support systems from work than they ever have before. Many of the things that the family, friends or communities used to do are now directly or indirectly provided at work. 

The family is smaller and has less of an extended support system than it once did. Many people live alone. Many of the health care functions that were once provided on a community basis are now provided at work. Others are going to be geographically based at some sort of local level. 

One of the most interesting movements in this country in the past few years is civic journalism. There is an effort by some of the most thoughtful people in the field of journalism to refocus journalism. This efforts is based on an awareness that journalism has gotten too far away from real people and their concerns. 

There has to be a way for the institutions of journalism to be useful to people, to help people connect and decide jointly how to go at their problems. They must do this in addition to their classic functions of reporting the news, telling the difficult story when it has to be told and getting people to understand what is going on around them.

I can take you to neighborhoods in this country such as Seversville, in Charlotte, North Carolina, where a process of neighborhood revitalization was triggered in part by the local newspaper.

Many in Southern California have asserted that national foundations avoid investment in the L.A. metropolitan area. Is it possibly the size of the region; or its ad hoc leadership patterns; or the lack of a hierarchical organizational structure which frightens off the East Coast establishment?

Peter Goldmark: It doesn't frighten us in the least. I think a lot of the things that go on in L.A. are warning bells for what is going to go on in the future, in other parts of the country.

We do a lot of things in L.A. We do not organize our activities by geographic location; we are organized around community development—it is one of our themes. There is a lot of our money, for example, going into LISC in L.A. 

Anita, as a Los Angelean with national responsibilities, would you like to pick up on that question: how the national funders approached L.A. and what the difficulties are of making a match? 

Anita Landecker: My experience has been that other major national foundations have come to L.A., and asked for a tour, but little else. This has gone on for years. Some foundations felt Los Angeles was simply too complicated.

Recently, a major foundation was going to do some intensive HUD efforts in neighborhoods. Their reason for not coming to Los Angeles was that they did not sense civic leadership. Our hierarchy is not understood because power is more diffused. My sense is that it is farther away and not as understandable.

I do not know what there is about July, 1996, but last month I had  two calls asking for names for new billion dollar L.A.-based foundations. There is a lot of wealth in this country and a lot of it is in California.

L.A. is going to be more prominent in philanthropic funding not only in terms of what existing foundations are willing to take a risk on but in terms of their own power and their own institutions that part of the country brings to the picture.

As a last, open-ended question, have we learned any lessons over the past thirty years that are going to be incorporated into new public strategics/ programs, or are we just going to rehash the old politically accepted bromides as a way of coalescing around ideas that people are familiar with? In short, have we learned anything since the 1960s about dealing with urban economics in America that can be applied in the 90s?

Peter Goldmark: The problems that we identify as urban are not going to go away. They are the critical problems that the United States faces. What are the three biggest agonizing problems? They are jobs, making the public school system work and crime. All three of them are hallmark central city problems. 

What we have learned is not to organize the political response to those problems exclusively around cities, but to rely on the political support of our national political landscape. Voter turnout and political contributions from inner-city areas are low; the suburbs rule. A serious, sustained national policy that addresses our urban problems must address suburban problems as well—and these problems are growing, and are directly related to the classic urban syndrome.

Carter learned it; Reagan did not want to learn it but knew it; both Bush and Jack Kemp, when he was head of HUD, learned it; and Bill Clinton learned it. The approach is going to have to transcend the classic jurisdictional boundaries between inner city and suburban.

Anita Landecker: I do think the successes we have seen from CDCs are a real lesson. They have a practical way of looking at problems—a focus on tangible results and in the best of cases, an accountability to the community they are serving. That seem to works well beyond housing.

The CDCs are bringing together corporate money to buy computers for schools, for example. The two are linking-up together in a way that has not happened before. I see the partnerships as a beacon of hope.

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