Working 'against all odds' now and in the future
"I have always admired the ability to bite off more than one can chew and then chew it." — William DeMille
The same may be said of affordable housing and community development organizations, whose achievements in revitalizing America’s poorest neighborhoods have garnered the attention and admiration from public and private sectors alike.
What explains their “against all odds” success is the passion, conviction and perseverance they bring to their work.
Because of the focus on communities that the mainstream market has abandoned, community development work has always involved more than its fair share of risk. Managing these risks has remained challenging and tricky. And more recently, even the “against all odds” passion has not been enough to ensure success for a number of organizations.
In a recent ECP publication, Building Sustainable Organizations for Affordable Housing and Community Development Impact: Lessons and Recommendations from the Field, the authors examine the impact of the Great Recession on ten nonprofit affordable housing and community development organizations that either failed or otherwise experienced severe financial pressures. The goal of this analysis was to understand what happened and why, all in an effort to draw out common themes and lessons that might be helpful to other developers facing similar organizational issues.
Finding what's durable by looking at what's failed
An interesting companion reading is a paper produced by LISC 13 year ago. Building Durable CDCs is a summary of a three-day meeting focused on six episodes in which CDCs either closed or were forced to scale back significantly.
The idea was that an analysis of the severe threats to the health of these six organizations would enable LISC and other stakeholders to do better in assisting CDCs in overcoming similar challenges and building more durable organizations.
Both publications accurately point out that the rate of failure of community development organizations is quite low when compared to other industries.
But what about their sustainability going forward?
The old rules don't apply
These groups traditionally work with razor-thin margins and are highly dependent on government subsidies and developer fees. More important, however, is the fact that they are now facing an uncharted landscape that looks very different from what they are used to navigating. And the old rules don’t apply!
Both the current ECP publication and the older LISC publication are “must reads” for community development practitioners.
The recommendations put forth are many and varied, confirming a key conclusion from the earlier LISC publication that the kind of serious crises that jeopardize an organization’s survival are cumulative affairs in which individual problems — no one of which is fatal — gradually gain mass and momentum until the available forces for remedy are too little, too late.
The approach to ensuring the health and vitality of the community development delivery system involves multiple parties and strategies, summed up nicely in the ECP report as follows:
- funders and government can help build strong organizations,
- developers should focus on creating viable business models, and
- developers should make information transparent and useful.
Ginny Tranchik is the director of financial management assistance for the Local Initiatives Support Corp. (LISC).
She is participating in a webinar for LISC program officers -- "How Sustainable Is Your Lead Agency?" -- at 11 a.m. on Oct. 6. Click here for more information.
Posted in Leading, Thinking Out Loud