December 19, 2012 – The North Carolina Community Development Initiative invested more than $5 million in nonprofit community organizations and small businesses across the state in 2012, helping catalyze economic growth in the communities they serve and strengthen their operations for the future.
“These are challenging but dynamic times,” Initiative CEO Abdul Rasheed said. “Our organization and our partners in community economic development across the state are innovating to create new approaches and solutions that help working families and struggling North Carolina communities build a vibrant, sustainable economic future.”
The Initiative and its lending arm, Initiative Capital, promotes economic growth in low-income and distressed communities by investing in local nonprofits and businesses that serve those areas; identifying new, sustainable strategies for community economic growth; and developing effective community economic development leaders.
The Initiative’s work is made possible by major funding provided by the State of North Carolina, Z. Smith Reynolds Foundation and BB&T Corp., donations from public, private and nonprofit sources, and revenues generated from enterprises created by the Initiative, Initiative Capital and its grantees to sustain their community economic development work.
Financial investments fund sustainable development
The Initiative awarded $2.2 million in grants during 2012 to 33 organizations that promote economic growth in low-income and traditionally underserved communities across North Carolina.
Twenty-seven received grants to fund operations, which they leveraged with funds from other public and private sources to fund their community economic development programs.
Seven received grants from the Initiative’s new Innovation Fund, launched in 2012, that provides seed capital for projects with the potential to create significant economic impact and be replicated by other communities. The projects promote job creation, the green economy, leadership development and sustainable development.
By the end of 2012, Initiative Capital’s initial investment of $3.5 million in Neighborhood Stabilization Program loans resulted in 30 renovated foreclosed homes, 25 of which have been sold at affordable prices to low-income families.
Initiative Capital reinvested $2.1 million of the NSP program funds for another round of funding in 2012, with an additional 15 homes already purchased or under contract for renovation by six partner organizations: Cape Fear Regional Community Development Corp., Center for Empowerment and Economic Development, Habitat for Humanity of Catawba County, Kingdom Community Development Corp., N.C. Indian Housing Authority and Prosperity Unlimited.
Among highlights of the Initiative’s grant-funded projects in 2012:
- In Nags Head, Outer Banks Community Development Corp. in April celebrated the opening of a nonprofit office center and apartment building. The center houses the CDC and four other nonprofits. The six apartments provide transitional and emergency housing in a community where high property values and rents make it difficult for low-income residents to find affordable homes.
- In Raleigh, StepUp Ministry used an Innovation Fund grant to launch an entrepreneurship program that is helping 130 ex-offenders develop businesses. The program aims to promote long-term economic development by improving the career pathways and earning potential of participants.
- In Hendersonville, Housing Assistance Corp. celebrated the grand opening of Oak Haven Apartments in September. The 56-unit apartment community provides affordable housing for seniors ages 55 and older. The one- and two-bedroom apartments include safety features designed to prevent dangerous falls. The community includes picnic shelters, a screened porch, two community rooms, a computer room and laundry facilities. It is one part of Housing Assistance Corp.’s work to meet the needs of Henderson County’s significant elder population, which is 65 percent larger than the national average.
- In Rocky Mount, Rocky Mount/Edgecombe Community Development Corp. celebrated the grand opening of its new Bojangles’ Famous Chicken ’n Biscuits restaurant in August – the first business to open in the CDC’s 85-acre mixed-use development, Crossing at 64. The restaurant created 40 full-time jobs in an area that continues to suffer high unemployment.
- In Wilmington, Southeastern N.C. Food Systems Program, Feast Down East, used an Innovation Fund grant to grow its public-private economic development partnership. Organizations across 11 counties are responding to local job losses by promoting new markets for local farm products. The program provides healthy, affordable food for low-income consumers and opens new markets for small local farming operations across the region.
- In Asheville, a partnership between Eagle Market Streets Development Corp. and Mountain Housing Opportunities has secured funding for an $11.1 million, 90,000-square-foot mixed-use development with affordable rental housing, commercial space and community facilities. The community revitalization effort has been 23 years in the making and includes the renovation of three historic buildings and construction of one new building in the historically African American neighborhood known as Asheville’s “Black Wall Street.”
- In Jacksonville, East Carolina Community Development Inc. is nearing completion on its largest multi-family project to date – the 88-unit Wellington Grove Apartments. The property has large open areas for recreation and family-friendly amenities, such as picnic pavilions and separate playgrounds for children and toddlers. The project is funded largely by tax credits from the N.C. Housing Finance Agency and addresses the community’s need for affordable rental housing.
Innovations create solutions for a new economy
The Initiative finalized a new investment strategy in 2012 to respond to critical needs and devastating budget cuts emerging from the global financial crisis and take advantage of new economic opportunities.
“North Carolina’s economy is increasingly entrepreneurial, green and technology-driven, which provides us with new opportunities to revitalize our communities,” said Meena Ahuja, senior program officer, who manages the Initiative’s diverse programs. “Our new investment strategy is designed to encourage and develop that innovative culture of entrepreneurship among the state’s community economic development organizations.”
Two major grant programs launched as a result. The Initiative’s new Innovation Fund awarded seed funding to eight nonprofits in June to implement innovative, replicable projects. Grants from the new Community Enterprise Fund will be announced in January.
The Community Enterprise Fund replaces the Initiative’s Core Operating Grant program. It will invest up to $100,000 for as many as three years to help high-impact nonprofit organizations implement strategic economic development plans that yield significant impact in the communities they serve.
“The Community Enterprise Fund is a strategy for us to invest in what’s working to stabilize low-resource communities and build new partnerships that will be successful in this new economic environment,” said Millie Brobston, the Initiative’s program officer for grant investments, who directs the new program.
Meanwhile, the Initiative tapped veteran community reinvestment banker Kevin Harris from RBC Bank to develop and lead a new strategic direction for Initiative Capital.
Harris has worked with lending partners to develop new products and services that can meet the changing capital needs of North Carolina’s community economic development sector and small businesses.
Among the Initiative-led innovations in 2012:
- Initiative Capital launched a pilot program to make equity investments in early-stage companies that create jobs and economic growth in low-income communities in North Carolina. It is being implemented in partnership with the N.C. chapter of the Investor’s Circle, a national organization of angel investors that provides patient capital to early-stage companies with a social impact mission. Initiative Capital made its first $20,000 equity investment to School House, a North Carolina business that manufactures college apparel.
- Initiative Capital began making loans to small businesses that operate in or serve low- and moderate-income communities and need capital to grow and create jobs. It also began making construction loans in response to pent-up demand from the recession, which limited the supply of capital for such projects. In 2012, Initiative Capital invested $746,000 in new loans to nonprofit and private developers in low-income communities.
- Three community development corporations (CDCs) and two community action program (CAP) agencies collaborated in a pilot project to test how to pool their resources and work together to serve their low-income communities. They partnered to weatherize homes using federal stimulus funding. The project not only improved the energy efficiency of the homes but yielded a new model for how such agencies can collaborate to create a new line of green-economy business services that can help these nonprofits sustain their operations. A $75,000 grant from the N.C. Rural Economic Development Center funded the project.
- Green Opportunities in Asheville expanded its energy efficiency services project to train at-risk young adults for green jobs and developed a teachable model for replicating its programs elsewhere. GO and the Initiative hosted a three-day retreat in April where teams from nonprofits across the state learned how to implement the model successfully in their communities. Future retreats are planned.
- Initiative Capital’s Envirosteel pilot project is drawing to a close in Kinston and Sanford, with sale completed on all but three of its 17 energy-efficient, steel-framed houses. Initiative Capital is testing lease-to-purchase contracts on the remaining homes as a potential model to help community development organizations generate revenue while providing affordable housing options in a housing market that continues to struggle.
Trainings and conferences develop sector leaders
The Initiative’s leadership development activities in 2012 focused on helping the sector think strategically about ensuring its long-term sustainability and meeting the changing needs of low-income communities.
The Initiative and its partners responded in several key ways:
- A spring retreat for 27 Initiative-funded organizations focused on business planning, fundraising, communications and community engagement. Keynote speaker Anita Brown-Graham, director of the Institute for Emerging Issues, challenged leaders to develop new models of doing business to serve their communities, create jobs and sustain their work.
- The fifth class of high school seniors participated in the Initiative’s Summer Youth Leadership Program. The eight-week program included leadership seminars provided by the Initiative and community economic development projects in the interns’ own communities hosted by nonprofits across the state. The youth program is part of the Initiative’s long-term strategy to develop state leaders who understand the unique needs of low-income communities and can help strengthen their economies. One student, Wendy Alvarado of Lexington, developed her own youth leadership program to convey what she had learned to other students in her community.
- The Initiative tapped real estate development officer LaVett Saddler as its new program officer for innovations, responsible for developing plans for leadership development and technical assistance that promote sector innovation. Plans are under way for a comprehensive program of technical assistance to launch in early 2013 for organizations that receive grant funding from the Initiative and some key training and resources for the public.
The N.C. Community Development Initiative leads North Carolina’s collaborative community economic development effort, driving innovation, investment and action to create prosperous, sustainable communities. For more information or to get involved, visit www.ncinitiative.org or call (919) 828-5655.