Community Development: Comprehensive Approaches Address Multiple Needs but Are Challenging to Implement
Released: 1995-02-22T00:00:00

Letter

Introduction

Despite overall economic growth in the United States during the 1980s, the economic and social health of many cities declined. While crime, poverty, and the physical and social deterioration of urban neighborhoods increased, intergovernmental aid to cities declined between 1980 and 1993 by about 19.4 percent in constant dollars. Meanwhile, the out-migration of many middle-income residents and businesses has caused city tax bases to shrink, hampering the ability of local governments to assist economically and socially distressed areas suffering from a mix of interrelated problems.

Over the past several decades, the public and private sectors have tried different strategies to assist people living in distressed communities. Some of these efforts have focused on improving the chances for individuals in these areas to obtain the education, social services, and other support they need to leave their neighborhoods. Others have focused on improving the neighborhood’s physical environment through affordable housing or economic development. Still others have combined aspects of both approaches by addressing the needs of residents and their environment. These latter efforts are referred to as comprehensive by community development experts because they consider the housing, social service, and economic development needs of the community. They are considered community-based because they focus on a specific geographic area and involve the residents in planning and implementing the effort. Comprehensive community-based efforts have often begun within a community in response to neighborhood conditions—rather than in response to a federal program—and are operated by local nonprofit organizations. While the structures of these organizations and the programs they provide vary, figure 1.1 illustrates a likely design for a comprehensive community-based development effort.

Major Community Development Initiatives

During the 1960s, as a part of its overall strategy to better serve the needs of the poor, the federal government supported broad comprehensive initiatives, such as the Community Action Program (CAP) and Model Cities. CAP established community action agencies (CAA) at the local level to combine and redirect a wide range of federal, state, local, and private resources to make a comprehensive attack on poverty. Participation by beneficiaries and decentralization of decision-making were also major elements of the program. As we reported in 1992, the program lacked sufficient authority and political support at the federal and local levels to influence agencies’ practices and improve service delivery.

Model Cities sought to rebuild deteriorated neighborhoods in selected cities by coordinating the array of resources from assistance programs at all levels of government, particularly in housing, education, health, and transportation. Like CAP, Model Cities attempted to unify these efforts into an interrelated system. The program was administered by city demonstration agencies that were an integral part of city administrations. In retrospect, according to our 1992 report, the results of the Model Cities program were mixed because the program lacked incentives to promote cooperation and consensus on priorities. The Model Cities program was terminated as of January 1975 by the Housing and Community Development Act of 1974. The act consolidated seven community development categorical grant programs into the Community Development Block Grant (CDBG) program. Federal support and sponsorship for comprehensive efforts slowed after this, and funding for many community development programs declined in the 1980s.

Meanwhile, the private sector, which had started its own comprehensive effort to revitalize distressed communities, continued to shape the comprehensive approach. The Ford Foundation, early in the 1960s, developed the Gray Areas Project in New Haven, Connecticut. Its purpose was to address the multiple needs of a distressed inner city neighborhood by rehabilitating existing housing, providing new affordable housing, and addressing residents’ social and economic needs.

Experiences from the private and the federal efforts of the 1960s led to the concept of the Community Development Corporation (CDC). CDCs are private nonprofit organizations that focus their efforts on specific distressed geographic areas. As originally envisioned, these groups emphasized economic and physical development as well as social service delivery. Their boards of directors were composed of residents from the area and representatives of concerned businesses and institutions. CDCs typically entered into partnerships with local governments and corporate entities and relied on both public and private funding. Since the early 1970s, the number of Community-Based Development Organizations—also known as CDCs—has more than tripled, according to a Fannie Mae Foundation study. Studies by the National Congress for Community Economic Development indicate that there are currently at least 2,500 CDCs around the country. However, many of these CDCs do not offer comprehensive services but focus primarily on housing production or economic development.

As federal involvement in community development declined and private participation grew, entities known as intermediaries evolved to provide CDCs with financial and technical assistance. In 1979, the Ford Foundation created the Local Initiatives Support Corporation (LISC), a national intermediary set up to provide grants, loans, and technical assistance to nonprofit community development organizations. Another prominent national intermediary—the Enterprise Foundation—has focused on strengthening nonprofit housing development groups, forging local housing partnerships, and helping local groups link needed services into housing, as well as on demonstrating creative approaches to community development.

The federal government also supported the use of national intermediaries. In 1978, the Congress chartered the Neighborhood Reinvestment Corporation (NRC) (42 U.S.C. 8101 et. seq.), a public nonprofit corporation. NRC’s mission included the revitalization of declining lower-income neighborhoods and the provision of affordable housing. NRC works with local organizations that are known collectively as NeighborWorks. There are several different types of NeighborWorks organizations, including Neighborhood Housing Services (NHS). NHSs are partnerships of local business leaders, local government officials, and neighborhood residents that function as NRC’s main vehicle for revitalizing distressed neighborhoods.

A major new federal initiative to assist urban and rural communities in their revitalization efforts—the Empowerment Zones and Enterprise Communities (EZ/EC) program—was adopted in 1993 under the Omnibus Budget Reconciliation Act. This program promotes the comprehensive revitalization of distressed communities by funding broad, community-based strategic plans. The bulk of the benefits under the program go to nine areas—six urban and three rural—designated as empowerment zones. Considerably fewer benefits are available to the 95 areas—65 urban and 30 rural—designated as enterprise communities.

Although the Department of Housing and Urban Development (HUD) and the Department of Agriculture were responsible for designating the areas, the President also established the Community Enterprise Board—a federal, Cabinet-level entity—to assist in implementing the EZ/EC program. The Board is composed of the Vice President, who serves as its Chair; the President’s assistants for domestic policy and economic policy, who each serve as vice chairs; the secretaries of 10 Cabinet departments; and the heads of several other agencies. In addition, the Board is tasked with advising the President on how federal programs can be better coordinated across agencies to respond to the needs of distressed communities.

Sources of Funding and Technical Support for Community Development Efforts

Community development initiatives typically rely on a patchwork of different funding and technical support sources from both the public and the private sectors. Federal funds generally flow through state and local governments in the form of block grants or go directly to community organizations in the form of categorical, or program-specific, funding. Additional funding—often to support specific programs or projects—is available directly from state and local governments. Private funding and technical assistance come from a myriad of sources, including intermediaries and foundations.

Public Funding and Support

Several federal block grant funding sources are available to community development organizations through state and local governments. Under HUD’s CDBG program, a wide range of neighborhood revitalization activities can be funded. For example, these grants may be used to rehabilitate housing, support economic revitalization projects, and provide public facilities. HUD also offers funding for housing development through the Home Investment Partnership (HOME) program to state and local governments, which may pass a portion of the funds on to eligible housing development organizations. The Department of Health and Human Services (HHS) makes funds available through the Community Services Block Grant (CSBG) and the Social Services Block Grant (SSBG). The CSBG funds can be used for a range of activities to provide social services, such as emergency assistance, employment assistance, and elderly care. The SSBG funds can also be used for a wide variety of social services, including preventing and treating drug and alcohol abuse and training and employing disadvantaged adults and youth in housing construction and rehabilitation.

The federal government also provides funding to community organizations through many separate programs operated across federal departments. This funding tends to be categorical—designated for specific activities—and must be applied for in accordance with specific program guidelines. For example, HUD offers funding for homeownership through the Housing Opportunities for People Everywhere (HOPE) program and for assistance to the homeless through the McKinney Act programs. HHS provides grants to local entities to develop and implement projects that create jobs for low-income people in distressed neighborhoods through its Community Initiatives Program. It also provides grants for substance abuse prevention and treatment demonstration projects, among other things. Other agencies—including the Departments of Commerce, Education, Justice, Labor, and Transportation; the Environmental Protection Agency; and the Small Business Administration—operate additional programs that are available to community organizations. In addition, various federal tax credit and loan guarantee programs are available to community organizations.

Some states and localities administer additional programs and provide grants or loans to community organizations for affordable housing, economic development, and social services. For example, a city government may have its own homeownership program that the community organizations can use. Sometimes, state or local governments provide other types of assistance by donating land or offering to work with lenders to negotiate lower interest rates. In addition, some states and localities provide financing—sometimes tax-exempt—for specific projects.

Private Funding and Support

National intermediaries provide grants and loans, technical assistance, and coordination with other organizations. These organizations possess advantages of scale that allow them to give local groups access to tax credits and corporate equity investments, secondary mortgage markets, and lenders’ commitments. For example, the National Equity Fund—a subsidiary of LISC—and the Enterprise Foundation use the federal low-income housing tax credit to raise capital for community organizations. In addition to raising funds, NRC’s Neighborhood Housing Service helps form local partnerships of residents, governments, and businesses. Local intermediaries also support community organizations by creating support systems, helping to arrange financing, and providing training and other technical assistance.

Foundations provide funding and assistance in a variety of ways. Several national and local foundations have formed direct partnerships with community development organizations. These foundations provide the organizations with funding and technical assistance for planning and executing projects. Other foundations provide grants for specific projects or as “seed” or “glue” money to be used in leveraging additional financing from other sources or to give a project already under way the resources necessary to continue.

Commercial banks, businesses, and insurance companies also provide assistance in varying forms to community-based development organizations. Some banks offer loan programs to promote housing, small business, and property development or make below-market-rate mortgage loans for low- and moderate-income housing. Some banks also invest in development projects and local businesses. Businesses and insurance companies have generally contributed to community-based organizations through donations to foundations and intermediaries. However, some businesses work directly with neighborhoods by providing technical support and by donating supplies or products for fund-raising or special events. Other businesses invest by locating their stores or plants in shopping centers or industrial parks within distressed communities.

Other organizations, such as universities, hospitals, and religious institutions, also support community-based organizations. In some cities, universities and medical centers have teamed up with community-based groups to sponsor neighborhood-based development activities, such as housing rehabilitation or child care. Many community-based development organizations began in church basements. Aside from providing financial support, some religious institutions provide technical assistance.

Objectives, Scope, and Methodology

The Subcommittee on Human Resources and Intergovernmental Relations, House Committee on Government Reform and Oversight, asked GAO to assess (1) the reasons why experts advocate a comprehensive approach to community revitalization, (2) the challenges to implementing these efforts, and (3) the ways the federal government might support comprehensive approaches.

To respond to this request, we conducted case studies of four comprehensive community revitalization efforts: (1) the Core City Neighborhoods in Detroit, Michigan, (2) the Dudley Street Neighborhood Initiative in Boston, Massachusetts, (3) the Marshall Heights Community Development Organization in Washington, D.C., and (4) the Neighborhood Housing Services in Pasadena, California. We neither evaluated these efforts to determine whether they were successful nor compared the comprehensive approach to single-focused approaches. Instead, we examined the history of each organization to find out why it chose a comprehensive approach and studied the major factors that helped and hindered its efforts. We judgmentally selected our case study sites through consultations with community development experts according to the following criteria: have at least 3 years’ experience; plan housing, social, and economic development; include residents in planning and decision-making; focus on a specific geographic area, and be located in an urban area.

These sites varied in their geographic location, style of management, origin (how the effort began and who started it), and evolution (how the effort incorporated housing, social, and economic development). They also varied in their demographic and economic profiles, differing, for example, in their rates of unemployment and poverty. Table 1.1 summarizes this information.

Profiles of Case Study Neighborhoods

The Core City neighborhood in southwest Detroit was once home to many of the city’s auto workers and was one of the city’s more elaborate business and shopping districts. The neighborhood declined rapidly after the 1967 riots as people and businesses moved out of the area and crime and drug trafficking increased. Now, it is largely vacant, in terms of both people and businesses. Burned-out, abandoned, and boarded-up buildings and vacant lots are scattered throughout the neighborhood. In 1984, a local Catholic parish began community outreach efforts that resulted in the establishment of a nonprofit organization—Core City Neighborhoods (CCN)—that collaborates with other local organizations to provide comprehensive services to the neighborhood (see app. II).

The Dudley Street neighborhood—located about 2 miles south of Boston’s major financial and cultural districts—was once a thriving business and residential district. Over a period of nearly 30 years, the neighborhood was effectively isolated from the rest of the city and experienced financial disinvestment, arson, influxes of poor residents, and illegal garbage dumping. Twenty-seven percent of the households in the neighborhood receive public assistance, compared with 12 percent in Boston as a whole. The Dudley Street Neighborhood Initiative (DSNI) began in 1984 as a nonprofit community organizing and planning entity. It collaborates with neighborhood residents, nonprofit organizations, foundations, and city agencies to meet its planned housing, economic, and social service objectives (see app. III).

Located in the northeast/southeast area of Washington, D.C., the Marshall Heights neighborhood was once a thriving African-American middle-class residential and business area. However, since the 1970s the community has suffered as its middle-class residents and businesses have moved out of the area. The community is cut off from the rest of the city by the Anacostia River and Interstate 295. It is home to one-third of the city’s public housing units, yet 38 percent of its residents are homeowners. The Marshall Heights Community Development Organization (MHCDO) is a nonprofit CDC begun in 1978 to concentrate on economic development projects that would lead to self-sufficiency for the area’s residents. The organization has since expanded into housing development and social services (see app. IV).

Northwest Pasadena is a residential community that consists of older single-family and multifamily units in need of rehabilitation. The majority of the community’s small businesses are unstable, marginally profitable, and undercapitalized. The area has the city’s highest living density and lowest household income. Until recently, the Pasadena city government played a limited role in the community, which, for the last 50 years has been socially isolated from the rest of the city. Adding to the sense of isolation, a highway was constructed in the early 1970s, displacing many residents and creating a shortage of affordable housing. The Pasadena Neighborhood Housing Services (PNHS) was formed in 1979 as a nonprofit organization after the city asked for help from the federally chartered NRC. PNHS’ initial efforts centered around organizing the community and rehabilitating its housing. However, the organization has since expanded its efforts into economic development and social services (see app. V).

Methodology

To determine why community development experts advocate a comprehensive approach to community revitalization, we convened three expert panels (see app. VII) to obtain the views of researchers; national intermediaries; government officials; and public interest groups representing community development organizations, social services organizations, and state and local governments. We also reviewed pertinent literature and interviewed leading researchers, foundation representatives, and federal agency officials. In conducting our case studies, we gathered data and interviewed community officials about their choice of a comprehensive approach. We developed information on the structure of the revitalization efforts, the nature of the collaborations the organizations had developed with public and private groups, and the range of funding sources used by the organizations. In addition, we collected demographic and economic data from the Bureau of the Census for our case study cities and for the census tracts that make up the case study neighborhoods.

To determine the challenges involved in a comprehensive approach to improving the conditions in the four neighborhoods, we relied primarily on our case studies. We interviewed individuals involved in or having knowledge of the revitalization effort about the primary factors that had promoted or impeded these organizations’ success. Persons interviewed included the executive director and primary staff of the organizations, members of each board of directors, neighborhood residents, state and local government officials, and representatives of major funding organizations and local nonprofit organizations. To the extent possible, we corroborated this evidence by reviewing studies and publications.

To identify ways for the federal government to support comprehensive approaches, we discussed the federal role with neighborhood organizations, members of our expert panels, and federal and local government officials. We also reviewed previous GAO reports on community development issues and on social service integration. In addition, we reviewed relevant studies, including the National Performance Review’s reports on reinventing government and the National Academy of Public Administration’s report on HUD.

We conducted our work between October 1993 and January 1995 in accordance with generally accepted government auditing standards. We discussed the findings in this report with HUD officials, including the Director of the Office of Affordable Housing within the Community Planning and Development Division, who generally agreed with the information presented in the report. We also discussed our findings with the Director of the Office of Community Services within HHS’ Administration for Children and Families, who stated that local communities should be the focus of program decision-making to improve housing, economic, and social conditions in distressed urban neighborhoods. He noted that the experience and participation of the people most directly involved in the neighborhood improvement process—members of the community—are of paramount importance in the effort.

Comprehensive Approaches Address the Multiple Needs of Distressed Communities

The problems in distressed urban neighborhoods are severe and growing worse. Nonetheless, community-based organizations that use a comprehensive approach hold promise for significant, long-term neighborhood improvement, according to experts from government agencies, foundations, and community development programs. Researchers said that such an approach is feasible because community organizations and an infrastructure to support them have evolved over the last several decades. Although comprehensive efforts—including those we reviewed—are diverse, they often share certain characteristics. Typically, they are community-based—focusing on a specific geographic area and actively involving residents—address physical and social needs, and are initiated and sustained through collaborations with both the public and the private sectors. The organizations we studied evolved their comprehensive approach as they matured to respond to neighborhood needs. However, the variety of programs offered by these groups and the inability to quantify some of their results make it difficult to measure their impact. In addition, community development experts emphasize that many of these neighborhoods have suffered decades of disinvestment that cannot be quickly reversed. They cautioned that significant improvements in conditions in these neighborhoods may take a generation or longer to achieve.

Problems in Distressed Communities Are Severe and Growing Worse

Across the country, distressed communities face an array of escalating physical, social, and economic problems. The number of people in poverty has climbed from 29 million in 1980 to 39 million in 1993. Many of these poor are concentrated in distressed urban communities where poverty and neighborhood distress—as indicated by the rates of poverty and joblessness and the numbers of female-headed households, welfare recipients, and teenage school dropouts—worsened between 1980 and 1990, according to a 1993 study.

Studies suggest that these problems are complex and interrelated. For example, a 1989 study reported that 81 percent of the families in poverty face two or more obstacles to achieving self-sufficiency. Such obstacles include joblessness, poor education, reliance on welfare, or poor health.

Furthermore, over half of the families face three or more obstacles. According to an Annie E. Casey Foundation study, the vast assortment of interconnected problems, unmet needs, and disinvestment combine to produce dysfunctional and socially isolated neighborhoods. Another study by the Local Initiatives Support Corporation states that problems in low-income communities such as escalating crime, drug trafficking, joblessness, teen pregnancy and school dropout rates are both the causes and the effects of social disorganization.

We found that despite the progress made by the organizations we studied, these same problems exist in our case study neighborhoods. Each of these neighborhoods has significantly higher rates of poverty and unemployment and higher proportions of welfare recipients and school dropouts than the city as a whole (see app. I). In addition, the physical condition of these neighborhoods has deteriorated and crime rates are high. For example, the Core City neighborhood has a high percentage of vacant land on which burned-out or dilapidated homes stand. A study by the city of Pasadena found a high concentration of violent crimes, neighborhood disturbances, and trafficking in narcotics. In the Marshall Heights neighborhood, most units are vacant in two public housing complexes that are awaiting demolition or renovation. Figure 2.1 shows the conditions that exist in these neighborhoods.

Experts Advocate a Comprehensive Approach to Community Revitalization

Given the conditions in these neighborhoods, community development experts cautioned us that significant improvements may take a generation or longer to achieve. Nonetheless, experts from government agencies, foundations, public interest groups, and community development programs believe that community-based organizations that use a comprehensive approach enhance the chances of significant, long-term neighborhood improvements because they address multiple neighborhood needs. They told us that the conditions in the neighborhoods are interrelated and need to be addressed in tandem if long-lasting results are to be achieved.

An expert on comprehensive approaches does not believe that the comprehensive initiatives were begun in response to research or theory but were rather inspired by the logical appeal of the approach. She said that there has been an increasing recognition of the limits of narrowly defined, categorical strategies. For example, new housing has been built in many distressed communities without much attention having been given to the social problems facing its occupants. Social services have been carried out as if in a vacuum, separate from the conditions in the neighborhood. The expert said that each intervention was governed by a separate bureaucracy without any sense of coordination. In contrast, she said, a comprehensive approach recognizes that the problems in distressed communities are interrelated, and it tries to begin change in a number of areas. For example, she said, rather than addressing just one of a family’s needs, such as housing, a comprehensive organization would also attempt to meet the family’s needs for employment, education, child care, training in parenting skills, or treatment for substance abuse.

The need to address the interrelated problems in distressed areas through a multifaceted approach is also recognized by researchers, HUD, and HHS. The appeal of the comprehensive approach is that it ensures attention to the interrelationships among the needs of the community by linking human services, physical revitalization, and economic development in a concerted effort, according to a University of Chicago study. A study by the New School for Social Research reported that the problems in distressed communities are “complex and multidimensional and require long-term integrative approaches to their solution.” In addition, HUD endorsed the comprehensive approach in its March 1994 publication entitled Strategies for Community Change in which the Secretary wrote, “We believe the best strategy to community empowerment is a community-driven comprehensive approach which coordinates economic, physical, environmental, community, and human needs.” July 1994 initiatives by HHS’ Administration for Children and Families are also intended to make it easier for community organizations to use HHS programs to meet community needs.

Dissatisfied with the results of previous single-focused approaches to community revitalization, national organizations and foundations are also emphasizing a comprehensive approach. While they recognize that the comprehensive approach is not new, they said that such approaches are more feasible now than in the past because community organizations have gained experience and an infrastructure for providing funding and technical assistance has evolved. According to the Director of Field Services for the Neighborhood Reinvestment Corporation (NRC), many programs supported by NRC in the past were developed with a housing rehabilitation focus. Over the years, however, the organization has learned that community needs extend beyond housing. As a result, NRC is encouraging its community organizations to make their programs more comprehensive. The Ford Foundation’s Neighborhood and Family Initiative—a multiyear program—uses the comprehensive approach because the foundation believes single-focused approaches to neighborhood problems are not effective in providing for the range of interrelated needs in poor neighborhoods. Additionally, the Annie E. Casey Foundation found that efforts to assist low-income children at risk were insufficient and needed to be augmented with social and economic initiatives that target the whole community. To encourage comprehensive revitalization, the foundation has provided $160,000 in planning grants and is willing to commit up to $3 million to each of five comprehensive organizations that attempt to improve conditions in their neighborhoods, including two of our case study organizations. Finally, the Enterprise Foundation—an intermediary that formerly focused primarily on housing—has begun a Transforming Neighborhoods demonstration in the Sandtown-Winchester neighborhood of Baltimore that brings community residents together with public and private agencies to plan and undertake comprehensive strategies.

Comprehensive Efforts Share Common Characteristics

Although comprehensive efforts are diverse, researchers have found that many—including the four we reviewed—share certain characteristics. Typically, they are community-based, focusing on a specific geographic area, and actively involving residents. Although they may evolve differently, they consider the needs of the community holistically so that their efforts confront the range of problems facing the community. Finally, they are frequently initiated and sustained through collaborations with many other organizations.

Comprehensive Efforts Are Community-Based

Community-based efforts focus on a specific neighborhood and involve those affected by the problems in shaping strategies to improve conditions in the neighborhood. Several studies have concluded that what distinguishes these efforts from their predecessors—Community Action Programs, Model Cities, and many single-focused efforts—is the extent of residential support for the community organization and its agenda. For instance, a study by the University of Chicago suggests that many of the earlier community efforts did not achieve their goals because they were initiated by outside organizations and did not involve the residents. A study conducted by Rainbow Research stated that significant community development takes place only when residents are committed to investing themselves and their resources in the effort. When residents identify their own needs and take advantage of skills already available in the community to foster their goals, a sense of ownership and community pride develops that allows a change in community conditions, according to community development experts. The experts also said that without residents’ involvement, results were often short-lived.

The four organizations we reviewed cited several benefits of residents’ participation in their community-based efforts. First, residents’ participation ensures that an organization’s activities support the real needs of the community. In addition, they said residents’ support and participation gives the organization social and political legitimacy as a voice of the community. Residents’ participation also gives the organization a source of support in the form of volunteers to sit on the board of directors, to fill staff positions in the organization, or to assist with specific events or activities. Community leaders said they have also noticed that participation instills a greater sense of pride and hope in the residents.

Comprehensive Efforts Often Evolve to Address Multiple Needs

Another common characteristic of these efforts is that they attempt to consider the multiple needs of the residents. According to a study prepared for the Ford Foundation, most comprehensive approaches fit one of three patterns. First, some focus on better coordinating the delivery of existing services toward a more comprehensive approach. Second, some efforts begin with a single focus—such as housing development—but evolve over time to encompass a variety of services and projects. Finally, according to the study, a few efforts begin with a comprehensive agenda. These efforts typically take on the most pressing issue first. They add to their activities in accordance with their overall plan as their organizational capacity grows.

Although the four organizations we studied were unique in terms of structure and services, two of the four organizations began with a single focus and evolved a more comprehensive approach as needs were identified. For example, in Pasadena, housing services officials began with a housing rehabilitation program and later expanded into community development activities, child care, and economic development. The Marshall Heights community group initially focused on economic development. Although its first project was the renovation of a shopping center, the group soon recognized that this effort alone would not make residents self-sufficient. Over the next decade, the group expanded into housing rehabilitation, drug abuse prevention and treatment, emergency services, and job training.

Core City Neighborhoods in Detroit began, in contrast, with a community organizing effort to identify residents’ needs. The organization established a comprehensive approach to address the identified needs, which included improved housing conditions, crime prevention, business development and improved job opportunities, and enhancement of the neighborhood’s physical appearance. Also, the fourth organization—Dudley Street—identified the development of a comprehensive plan as one of its first objectives. Concurrently, the organization began a campaign to stop the illegal dumping of trash as a mechanism for showing results and gaining community support. As the organization acquired more political power, funding, and staff support, it began addressing the other issues—housing, social services, and economic development—identified in its comprehensive plan.

Comprehensive Efforts Involve Collaborations With Other Organizations

Finally, comprehensive community organizations often collaborate with other local public and private organizations to help use resources more efficiently and to meet residents’ needs. These collaborations may include foundations, schools, social service agencies, and other nonprofit organizations. According to a Ford Foundation study, collaborations can range from a few to several participants and can have either formal agreements of cooperation or informal agreements that include the occasional sharing of information, personnel, supplies, or materials. In addition, these arrangements can be structured through a local institution or government, a consortium of existing institutions, or a specially created independent organization.

The four organizations we studied collaborated with other groups to expand their resources and address areas that they would not otherwise have been able to take on. For example, Core City Neighborhoods collaborated with other groups extensively. They networked with six other groups to provide social services, such as a parenting skills program and an after-school and summer program for youth. They also collaborated with a local foundation that provides publicity and funding for the organization and with a bank that funds other efforts and provides volunteers.

Organizations Cited Multiple Benefits Derived From a Comprehensive Approach

In all four locations we visited, key stakeholders agreed that the comprehensive approach has benefited the community and holds promise for long-term results because the approach has enabled them to provide multiple services and to make these services accessible to community residents. In addition, residents and community leaders from all four locations cited an improvement in the physical appearance of the neighborhood and the attitudes of some of the residents. For example, the Marshall Heights community organization believes that it has improved the quality of life for many residents by bringing services to the community. Residents no longer have to take several buses to obtain emergency services or housing assistance outside the community. From one organization, they can obtain emergency food, temporary housing, homeownership assistance, employment referrals, drug abuse prevention and treatment services, advice on starting a small business, and assistance in cleaning up and organizing the neighborhood. Some of these services were not previously available in the community but were developed by the organization over the last decade as it evolved and recognized the many needs of the community. For example, a lack of services for treating drug-addicted residents prompted the organization to create its own treatment center. The center takes a holistic approach and provides a framework for a wide range of prevention, intervention, treatment, and follow-up services and programs (see app. IV).

The Dudley Street organization emphasized the value of being able to help people improve themselves from whatever level they begin. For example, one person may need access to elderly care only, while another may need assistance in finding affordable housing and child care. Dudley Street’s goal is to help residents organize to gain access to services the community needs, according to the organization’s executive director (see app. III). In Pasadena, the director of a program for potential small business owners described a number of outcomes from the program that go beyond the acquisition of business skills. Some participants reassess and replace their initial business ideas, others succeed in getting jobs, while some return to school. The director believes that for many of the participants, the motivational benefits gained from learning to organize efforts in pursuit of a goal are often more important than the economic benefits (see app. V).

However, each organization stressed that its efforts would require a sustained commitment over a long period of time because of the magnitude of the problems being addressed. The Core City organization in Detroit has developed a 50-year strategic plan, anticipating that the neighborhood’s revitalization will take a considerable amount of time (see app. II). The executive director of the Pasadena organization pointed out that because the housing stock is older and the population transient, the need for housing rehabilitation and social services will be ongoing.

Figure 2.2 depicts conditions before and after cleanup and/or renovation in our four case study neighborhoods. The photographs on the first page of the figure, taken during the mid-1980s, illustrate the effects of illegal dumping on vacant lots in the Dudley Street neighborhood. The photographs on the facing page show the results of the Dudley Street organization’s efforts—housing, offices, a restored park, and a mural. On the third page, contrasting pairs of photographs depict a shopping center in the Marshall Heights neighborhood before and after rehabilitation, as well as a vacant building that the neighborhood organization converted into a community resource center. The photographs on the final page illustrate improvements in housing and commercial areas achieved through the efforts of three neighborhood organizations.

Evaluations Supporting the Long-Term Impact of Comprehensive Efforts Are Limited

Few empirical studies have been completed that are able to capture the long-term impact of groups carrying out a comprehensive approach. According to community development researchers, there are several reasons for the lack of empirical research. First, because these organizations have evolved to respond to the specific needs of their community, each organization is different from its counterparts. Such diversity makes generalization difficult. Second, the results of much of the work these groups do—community outreach, counseling, and referral—are difficult to measure or quantify. According to a University of Chicago study, traditional evaluations are rarely designed to measure the depth and complexity of factors occurring at the neighborhood level or to relate the cause and effect of changes over time. As a result, existing evaluations of these efforts generally focus on tangible benefits, such as the number of goods and services produced, rather than intangible benefits, such as building self-esteem, pride, and hope within the community.

The few formal evaluations that have been completed for the four organizations we reviewed were requested and funded by outside organizations. For example, as a prerequisite for participating in an operating support initiative, LISC required and funded an evaluation of the Marshall Heights organization by a consulting firm in 1992. The evaluation pointed out success factors (holistic vision, strong leadership) and weaknesses (inability to integrate programs) and made several recommendations to the organization. The Pasadena organization is evaluated quarterly by its parent organization, the Neighborhood Reinvestment Corporation. These evaluations focus on financial and program performance. The Annie E. Casey Foundation is developing an evaluation framework for its Rebuilding Communities Initiative. This framework will be applied to the Dudley Street and Marshall Heights organizations to meet a requirement for participation in the foundation’s community revitalization effort.

Officials from all four organizations we studied said that they do not formally evaluate their own programs. These officials told us that self-evaluations have not been done because of resource constraints. However, all four community organizations have assessed their activities informally. Some have reviewed their accomplishments each year to ensure that they are meeting the objectives laid out in a strategic planning document. Others have compared their current program offerings with the results of ongoing community needs assessments. The organizations also maintained records of results, such as the number of housing units produced, clients served, or participants involved. They told us that this information is often required by funders.

Conclusions

In response to the interrelated problems in distressed communities and out of dissatisfaction with the results of community development efforts over the past several decades, community development experts, foundations, government agencies, and community development organizations are turning to the comprehensive approach. While they recognize that this approach is not new, they believe that it is more feasible now than it was in the past because community organizations are more experienced and an infrastructure to support them has developed. They emphasize that the conditions in these neighborhoods cannot be quickly reversed. In addition, the diversity of these efforts and the difficulty in quantifying some of their results make it difficult to measure outcomes. Nonetheless, experts and organizations believe that community-based efforts that involve the residents and consider their needs holistically are promising because these efforts recognize the intertwined nature of the problems confronting these communities and the people who live there.

Comprehensive Approaches Are Difficult to Implement

Many challenges confronted the four organizations we studied as they attempted to improve conditions in their neighborhoods. Because many residents were skeptical, a substantial challenge to each organization was gaining the trust of residents and ensuring their involvement in the revitalization effort. In addition, the organizations had to piece together a complex web of funding from several private and public sources—often with restrictions on use—to cover both their program and their administrative costs. They also faced the daunting task of concurrently managing a diverse set of programs to address housing, economic development, and social service needs. These challenges required persistent efforts over many years to build sufficient technical and management skills to operate effectively. Leaders of these organizations said that, to sustain their organization, they have concentrated on building support among diverse groups of residents, gaining access to multiple funding sources, collaborating with other organizations, and developing a cadre of experienced staff.

Community-Based Organizations Face the Challenge of Ensuring Residents’ Participation in the Effort

According to officials representing the organizations we studied, involving residents was a challenge because some of them were skeptical, fearful, or apathetic. For example, in one community, the executive director remembered shouting to residents through their front doors and trying to communicate with them through peep holes. He said that residents who opened their doors talked about how nothing they could do would make a difference in the neighborhood. A resident in one of the communities we studied said that people were afraid to speak up in community meetings about problems such as drug dealing in their neighborhoods because they were afraid of retaliation.

According to these officials, neighborhood conditions and the failures of past community development efforts to address the needs of residents were largely to blame for residents’ feelings. At each case study location, conditions had declined as many middle-class residents and the businesses that served them moved out. Subsequently, poverty increased and related problems grew in these areas (see app. I). Physical isolation from the rest of the city and reductions in both private and public services also affected several locations. Disinvestment, from cuts in police protection to insurance and home mortgage redlining, had been taking place for years. One of the locations contained 2,995 public housing units—one-third of the city’s total units—784 of which were vacant as of January 1994. In addition, many residents remembered previous promises that were broken when budgets were cut or displacements occurred instead of neighborhood improvements.

The organizations used a variety of methods to gain the trust of community residents and involve them in the organization. Each organization cited visible accomplishments—rehabilitated housing and economic development projects—as a factor in gaining the trust of residents and reducing their skepticism about the revitalization effort. For example, in one case, residents did not begin to trust the organization until they noticed the development of apartment complexes and the establishment of youth activities. In another case, residents said that the redevelopment of the local shopping center was a visible sign that the organization was serious about improving neighborhood conditions. In addition, the organizations we studied conducted extensive neighborhood outreach and organizing campaigns, involved the residents in developing plans to address neighborhood concerns, formed boards of directors with seats designated for residents, hired residents for staff and management positions in the organization, and revisited their plans periodically to obtain residents’ input and to make sure that the plans still met the community’s needs.

One of the organizations said that it has yet to involve sufficient numbers of the neighborhood’s public housing residents in the effort. The executive director said that under an Annie E. Casey grant, the organization had begun to plan ways to involve more public housing residents. However, he said that without reducing the concentration of public housing units by creating mixed-income developments, it would be hard to end the feelings of isolation experienced by public housing residents. Community development experts we interviewed agreed. They said that public policy contributes to the isolation of public housing residents by concentrating low-income families in one place and by creating a bureaucratic structure—the public housing authority—that is typically not involved in community development activities.

The Need to Fund and Manage Multiple, Diverse Programs Poses a Challenge to Comprehensive Approaches

Each of the four efforts we studied was faced with the challenge of funding and managing multiple social service, housing, and economic development programs to address community needs. The four organizations relied on multiple public and private sources, such as federal block grants and program-specific grants, foundation grants, and corporate donations. Identifying and soliciting additional funding sources and establishing collaborations to provide services posed a major challenge for each group. Once the funds were obtained and the collaborations were established, the groups were faced with the challenge of concurrently managing multiple programs, each with separate funding sources, application requirements, and reporting expectations.

Organizations Relied on a Complex Web of Funding Sources

The four organizations found that obtaining funding to meet the diverse needs of the community was difficult and time-consuming. In general, they said that their primary problem with public funding sources could be traced to the proliferation of categorical programs and the programs’ many different application and reporting requirements. For example, one organization said that applying for a $725,000 HUD McKinney Act grant and tracking the program’s reporting requirements demanded one staff member’s full-time attention. Representatives from this organization also said that the reporting requirements for the program tend to focus more on processes and expenditures than on results. Another organization was reluctant to apply for a HUD neighborhood development program because the cost of hiring someone to write a proposal was too high compared with the likelihood of being funded.

Representatives from three of the organizations said that they have turned down funding from certain federal programs or have chosen not to apply for some federal grants because the programs were not flexible enough to be used to address community needs. For example, one organization decided not to apply for a community development initiative loan from HUD because it did not believe that the repayment term was realistic for the planned project. Another organization does not use federal funding for some of its programs because beneficiaries would be required to meet stricter eligibility standards than the organization deems reasonable. A third organization intended to use funds from HUD’s Nehemiah Grants program to support its development of new homes in the community.However, since mortgages supported by a program grant could not be assumed by future homebuyers, the organization could not ensure that the housing would be kept affordable for future homebuyers. Because of this restriction, the organization decided not to accept the funding.

In response to these problems, each of the four organizations we reviewed developed diverse funding sources to support its programs. All four organizations used funding from federal, state, and local programs and received support from foundations and corporations. Overall, the organizations relied on public funding for about 30 to 60 percent of their budgets. Much of this funding was obtained through CDBG or CSBG—two relatively flexible federal grant programs. The organizations credited these programs with providing a long-term stream of funding for a wide range of services. Total organizational budgets for 1993 ranged from about $500,000 to about $2,600,000. Table 3.1 lists the major funding sources used by the four organizations.

The four organizations said that they were able to develop multiple funding sources more easily after they had accumulated a record of accomplishments and small amounts of funding—seed money—that they could use to leverage more resources. For example, a city official in one case study location informed us that the city continues to provide funds because of the effort’s established history and effective use of funding for viable projects. Similarly, two foundations involved with another case study organization described the effort as a good investment because of the organization’s proven track record and strong leadership. The Marshall Heights organization cited its use of $25,000 in CDBG funding to leverage $3.2 million in private funds to rehabilitate its shopping center.

Each of the organizations we reviewed also increased its capacity to address community needs by collaborating with other organizations, such as housing developers, churches, local governments, private corporations, and other nonprofit organizations. Representatives from the organizations said that collaborating—while difficult and time-consuming—allowed them to use the skills and expertise of other organizations without necessarily developing the same capacity themselves. Two of the organizations relied on collaborations with other organizations to expand their network of services. The other two organizations provided most of the services themselves but relied on collaborations to supplement their programs. In both instances, the collaborations increased the resources available to the organization. For example, one organization established a collaboration with an existing nonprofit housing developer who agreed to complete the housing development portion of the organization’s comprehensive plan. The other organization worked with a local fund-raising organization that helped raise over $133,000 over a 4-year period and provided an attorney to untangle building titles, architects to handle redesigns, and many volunteer hours and consultations with other professionals.

The Need to Manage and Integrate Multiple Programs Challenges Comprehensive Efforts

Each of the groups we studied also faced the challenge of managing an organization that operates—or facilitates the delivery of services through—multiple, concurrent, and diverse programs. All of the organizations said that the number of programs they operated had increased over the last 10 years in response to community needs. In each case, increases in the number of programs created a strain on the organization’s managerial and administrative capacity. For example, during a 4-year period, the staff of one of the organizations we studied doubled in size and the operating budget nearly tripled with the addition of major programs to produce affordable housing and provide social services. According to an organizational assessment prepared for the group, the expansion in programs put a strain on the existing management systems, staff, and finances. The different funding sources needed to support the organization’s many programs created a strain on the financial system because each program had a different set of expenditure definitions and reporting requirements and, therefore, had to be tracked separately.

In addition, the collaborations developed by these organizations sometimes caused management strains because they were time-consuming and occasionally created competition. One organization said that a great deal of time had to be spent on building consensus before collaboration could occur because the groups were used to competing for funding. Another organization said that collaboration can be costly and difficult because it requires bringing together many different groups that have to cooperate and share power. In another neighborhood, an organization official cautioned that the executive director can be perceived as a political threat to city officials who believe that, as a recognized leader in the community, the executive director may run for office one day.

Each organization said that these management challenges required persistent efforts over many years to build sufficient capacity to operate effectively. They said that one way they build such capacity was to develop a cadre of experienced staff members—both from within the community and from outside it. For example, one organization has received assistance in maintaining its staff levels by obtaining administrative funding from foundations. Another responded by hiring long-time board members—who were also neighborhood residents—as staff. Two organizations also developed leadership below the executive director position by creating deputy director positions. In addition, the charisma and enthusiasm of staff and leaders were cited by each organization as key ingredients that helped them through difficult times.

Conclusions

Organizations using a comprehensive approach face multiple challenges. Community skepticism caused by declining neighborhood conditions and the failures of some previous programs makes involving residents difficult. The need to fund multiple programs and to manage them once funding is secured also poses challenges. The number and diversity of funding sources these organizations use create demands on staff time because the organizations must concurrently manage multiple programs, each of which has separate application requirements and reporting expectations. Despite such challenges, the organizations we studied have managed to sustain their comprehensive approach by employing several strategies, including ensuring residents’ participation in the revitalization effort, developing consistent and diverse funding sources and collaborations with other organizations, and making organizational changes where necessary to respond to an increasing number of programs.

Recent Federal Initiatives May Aid Communities Taking a Comprehensive Approach

Historically, coordination has been limited across and within the federal departments and agencies that have responsibility for programs intended to assist distressed communities. Agencies have tended not to collaborate with each other for a variety of reasons, including concerns about losing control over program resources. Recently, the federal government has taken steps to improve interagency coordination and reduce fragmentation by consolidating and streamlining some of the federal programs intended to assist distressed communities. If fully implemented, these efforts could help the federal government become more supportive of comprehensive revitalization efforts.

Fragmented Programs Limit Interagency Coordination

The federal government assists distressed urban communities and their residents through a complex system involving at least 12 federal departments and agencies. Together, these agencies administer hundreds of programs in the areas of housing, economic development, and social services. For example, in previous work we reported that there are at least 154 employment and training assistance programs, 59 programs that could be used for substance abuse prevention, and over 90 early childhood development programs. A guidebook to federal programs available for the Empowerment Zones and Enterprise Communities program identified over 50 programs as a “sample” of the universe of federal programs that agencies could consider in developing their revitalization plans. Considered individually, many of these categorical programs make sense. But together, they often work against the purposes for which they were established, according to a National Performance Review (NPR) report.

According to Office of Management and Budget (OMB) officials we interviewed, one reason for limited coordination among the many federal programs with similar goals and objectives is that federal agencies have become more protective of their programs as resources have grown scarcer. These officials and a community development expert also believe that agencies are concerned that collaboration and coordination could lead to a loss of control over program resources. Moreover, the OMB officials believe that federal efforts to maintain program structures and funding levels have constrained opportunities to identify and resolve instances of programmatic overlap, regulatory burden, and limited access to funds.

In addition, previous efforts at coordination have generally been unsuccessful. In earlier work, for example, we found that the federal government had set up a patchwork of parallel administrative structures to deliver an estimated $25 billion annually in employment and training services. Many of these programs target the same population, yet despite decades of attempts to improve coordination, conflicting program requirements continue to hamper administrators’ efforts to coordinate activities and share resources. In the area of social service delivery, evaluations of previous coordination efforts have found that such initiatives were unable to coordinate different categorical programs at the federal level and have had only limited success at the local level.

Even within federal agencies, programs are sometimes fragmented and uncoordinated. For example, in fiscal year 1993 HUD’s Office of Community Planning and Development administered several programs that provided about $5.4 billion to states, local governments, and public and private nonprofit groups for (1) affordable housing, (2) community and economic development, (3) assistance to the homeless, (4) infrastructure, and (5) social services. Until HUD recently began efforts to consolidate four of these programs, applicants had to complete four different applications and prepare two plans. In addition, each program operated on its own schedule and required lengthy progress reports that included little information on the program’s accomplishments. HUD reported that these requirements were pushing communities away from comprehensive planning and toward compartmentalized thinking.

The proliferation of federal programs imposes a burden on local organizations that attempt to piece together programs to serve their communities. As we mentioned in chapter 3, the neighborhood organizations we studied found it burdensome to manage multiple programs with individual funding streams, application requirements, and reporting expectations. In addition, one organization reported that it had strained its managerial and financial systems to meet federal record-keeping and accounting standards for several funding sources.

While the organization implemented the necessary procedures to comply with the standards, officials said that the administrative burdens nearly forced the organization to reduce the scope of its services.

Some Recent Federal Initiatives May Help Communities Implement a Comprehensive Approach to Revitalization

Recently, in response to recommendations by NPR to reduce the administrative burden of federal programs and make federal programs more responsive, a number of initiatives have been undertaken. Some of these initiatives may eventually aid communities currently taking or planning to take a comprehensive revitalization approach. These initiatives include (1) governmentwide programmatic and managerial changes intended to “reinvent” federal departments and agencies, (2) program consolidation and streamlining measures designed to reduce fragmentation among some federal programs and reduce administrative burdens on recipients of federal funding, and (3) the establishment of the Community Enterprise Board.

Created in 1993, NPR undertook a broad review of the federal government’s management and operations in an attempt to “reinvent” the way departments and agencies do their work. Among its emphases were recommendations on how major government programs could improve their operations by enhancing their responsiveness to customers’ needs. To implement these recommendations, Executive Order 12862 was issued, requiring executive branch departments and agencies to establish and implement customer service standards. As an initial step in this process, for example, HHS identified its partners, direct and indirect customers, and stakeholders. HHS plans to set standards for its partners—most often state and local governments—and then establish standards for its “ultimate customers,” such as substance abuse clients, Head Start families, and children in foster care. To achieve its customer service goals, HHS intends to consult with state and local governments and service providers when it formulates new policies and regulations that affect its partners and the individuals and families who receive services.

To reduce the level of fragmentation among federal programs used to assist distressed communities and their residents, the federal government has also taken steps to streamline application processes and consolidate some programs. For example, HUD recently issued a proposed rule to consolidate into a single submission the planning and application requirements for several formula grant programs administered by its Office of Community Planning and Development. These include CDBG, Emergency Shelter Grants, HOME Investment Partnerships, and Housing Opportunities for People With AIDS. The proposed rule would also consolidate the reporting requirements for these programs, requiring one performance report instead of several program-specific reports. Other agencies that have taken steps to consolidate programs include HHS, Education, and Labor. However, according to OMB officials and public policy researchers, a significant reduction in the level of program fragmentation has historically been difficult to achieve because of the congressional subcommittee structure, the protectiveness of agencies toward their programs, and the strong support of constituent groups for particular programs. Nonetheless, HUD has announced plans, pending congressional approval, to consolidate 60 of its major programs into 3 flexible performance-based funds. The funds would be designed to give state and local governments the flexibility to develop local plans for community and housing needs that, by their nature, would vary from jurisdiction to jurisdiction and change from year to year.

The Community Enterprise Board was established by executive order in September 1993 to assist with the implementation of the Empowerment Zones and Enterprise Communities program and to advise the President on how the federal programs available to assist distressed communities can be better coordinated across agencies. To improve such coordination, the Board has been tasked with (1) developing an inventory of all programs providing physical, social, and economic assistance to distressed communities and their residents, (2) identifying programs or policies that overlap and/or conflict, and (3) developing innovative strategies to collaborate on ways to accomplish common program objectives. While the experts we interviewed agreed that an entity such as the Board is needed to coordinate the federal programs available to assist distressed communities, they also said that in the past such efforts have not been very successful. If the Board is to fulfill this mission, it will require high-level departmental commitment and open dialogue, according to the experts.

According to a recent study on HUD by the National Academy of Public Administration (NAPA), flexibility should be a primary criterion in any decision on consolidation reached by the Congress and the administration or in any of the programmatic changes undertaken in the interim. Among the ways to ensure this flexibility are (1) to build in appropriate waiver provisions (statutory or regulatory) for new or demonstration programs so that communities can quickly get them under way or make community-specific changes, (2) to provide sufficient flexibility in funding major program areas so that the Secretary of HUD has a range of options for addressing the varied and changing needs of communities, and (3) to limit the number of competitive awards by providing more funds through block grants.

Conclusions and Observations

The federal government’s approach to assisting economically and socially distressed communities has led to the creation of numerous individual programs intended to address specific needs faced by these communities. Considered individually, many of these categorical programs make sense. But together, as the NPR report noted, they often work against the purposes for which they were established. Because previous federal efforts to consolidate or streamline programs have had only limited success, local organizations must still piece together programs to serve their communities. Although past efforts to coordinate and consolidate programs across agencies have had limited success, we believe that consolidation measures such as those HUD has proposed, if fully implemented, could make it easier for communities to plan and undertake a comprehensive approach to neighborhood improvement.