Continued...

Slow Decline of NCCED and Growth of Niche Networks and Associations

Several important developments in the mid to late 1990s started the slow decline of NCCED. In the search for funding, NCCED started placing greater emphasis on special projects and initiatives that were outside its core mission, shifting, in the words of Opportunity Finance Network president Mark Pinsky, from an entrepreneurial spirit to chasing government money. This made NCCED’s array of services less relevant to its members, causing membership numbers to drop. This exacerbated NCCED’s financial challenges, causing it to pursue funding that led it further afield.

A growing number of Latino and Asian American community development organizations, many immigrant focused or led, felt they were not being well represented by NCCED and either became less active or dropped out. These organizations formed their own associations, including Coalition for Asian Pacific American Community Development (CAPACD) and the National Association of Latino Community Asset Builders (NALCAB). Roberto Barragan, a founder of NALCAB and long-time director of Valley Economic Development Corporation, says NALCAB “focuses on asset-building activities that create wealth and build on the strengths of Latino communities in a culturally relevant way.”

At the same time, there was continued growth in the number of state and local CDC associations, often aided by NCCED, and an increasing number of CDCs participating in these state and local associations. None of these associations were in direct competition with NCCED, but the cumulative effect was the weakening of NCCED. NCCED was dissolved in 2006, and there was no apparent successor.

After NCCED’s demise, state association leaders formed the National Alliance of Community Economic Development Associations (NACEDA) with initial support from the former Fannie Mae Foundation. As its name suggests, NACEDA is an association of associations, and its bylaws stipulate that the 3,200 members of its members are also members of NACEDA. Focusing on capacity building initiatives to strengthen CDC infrastructure, Jane DeMarines, NACEDA’s immediate past executive director, sees one of the major challenges for the future to be the willingness of philanthropy to continue to support CDC infrastructure.

Also throughout the last decade, specialized network organizations began to emerge to represent the interests of the new, larger housing producers. The Housing Partnership Network (HPN), composed of about 90 large metropolitan and regional housing development organizations, was formed to provide peer exchange opportunities among senior leadership for organizations that shared a business model that was distinct from CDCs.

Sustained Excellence Alliance Corporation (SEA Corp) is a group of 10 advanced CDCs that participated in the Fannie Mae Sustained Excellence Initiative. It incorporated in 2001, with the mission of providing peer learning and access to capital. According to Board President Barbara McCormick, the smallness of the group is an advantage in that there is a high level of trust and frankness that allows for sharp and focused learning.
Another small association, but with a much different membership profile, is Stewards of Affordable Housing for the Future (SAHF), which is composed of nine of the largest nonprofit housing organizations in the country. President Bill Kelly says that SAHF was formed in 2003 to create a peer group for nonprofit housing organizations that worked across several jurisdictions.

These “peer networking” organizations were created because their members found that neither the intermediaries nor NCCED could provide them with the level of peer exchange and support that they sought.

By 2006, the funding scene began to shift for the national intermediaries. Both Enterprise and LISC, which had derived much of their pass-through funding from Living Cities, were given notice that the Living Cities money was being reprogrammed for other purposes. The financial crisis in 2008 also greatly reduced their philanthropic contributions from corporations, specifically financial institutions, and their earned income through the proceeds of their housing financing programs. These changes contributed to a shift in strategic direction. Bill Frey, executive vice president for Enterprise Community Partners, believes that intermediaries and funders are still committed to a strong and effective nonprofit housing sector; however, he predicts that there won’t be resources from either to support as many groups in the future.

The trickle-down implications of these resource reductions mean that many of the nation’s nonprofit housing organizations, especially small CDCs, who have come to rely on both operating support from the intermediaries and development fees from real estate projects, are in real financial trouble, with no one entity to turn to for help.