Social surplus remains in the private sector, but it can fuel community development in target areas. In addition to lending money, they provide technical assistance and management training. State legislatures can be called upon to provide loan reserves, thus leveraging public funds for the sake of economic development. For-profit corporations engage in philanthropic activity as well. Local officials can encourage local corporations to support community development projects.
Contributions lower the firm's tax bill, while social surplus flows to local public uses.
Nonprofit Corporations Nonprofit corporations can serve as vehicles for collective action for delivery of social services not provided by government. Care should be taken to assure that boards of directors represent the corporations' constituencies and function democratically. Nonprofit corporations deliver essential services, are locally controlled, and create jobs within communities. They build capital locally with positive implications for community development. Poor communities exist because resources and income are largely absent.