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Conference Board - Report Number 1079-94-RR
Serving Business and Society Since 1996 Corporations as Partners in Strengthening Urban Communities
Case studies of corporate-community partnerships show:
Founded in 1916, The Conference Board's twofold purpose is to improve the business enterprise system and to enhance the contribution of business to society. To accomplish this, The Conference Board strives to be the leading global business membership organization that enables senior executives from all industries to explore and exchange ideas of impact on business policy and practices. To support this activity, The Conference Board provides a variety of forums and a professionally managed research program that identifies and reports objectively on key areas of changing management concern, opportunity and action. The Conference Board
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Copyright 1994 by The Conference Board, Inc,
ISBN No. 0-8237-0526-9 CONTENTS FROM THE PRESIDENT EXECUTIVE SUMMARY WHAT IS COMPREHENSIVE COMMUNITY DEVELOPMENT? DIRECT INVOLVEMENT OF CORPORATIONS IN COMMUNITIES
Hallmark Cards, Inc., Kansas City, Missouri and The Upjohn Company, Kalamazoo, Michigan
United Services Automobile Association (USAA) and USAA Federal Savings Bank (USAA FSB), San Antonio, Texas
The Atlanta Project, Atlanta, Georgia
Pathmark Stores, Inc. And Newark New Community Corporation, Newark, New Jersey
Huntington National Bank And Paul Taylor Associates, Columbus, Ohio
Ben & Jerry's Homemade, Inc. And Harlem Ark Of Freedom, New York, New York
J.P. Morgan Community Development Corporation, New York, New York
The Cleveland Community-Building Initiative, Cleveland, Ohio
The Local Initiatives Support Corporation (LISC), United States
RLA (Formerly Rebuild La.), Los Angeles, California FROM THE PRESIDENT Crises in education, crime and the economy have resulted in growing alarm among both executives and community leaders. One effect has been a reexamination of corporate philanthropy, and a shift toward innovative corporate giving programs. Recent Board publications, for example, have looked at changes in the United Way and other donee organizations, and examined the effectiveness of corporate volunteer programs. With this report, The Conference Board turns an eye toward America's troubled inner cities, where companies are partnering with members of the community in order to achieve results. Such programs, while recent, have met with some success. In-depth case studies look at the effectiveness of urban community-building and highlight corporate experiences that will guide other companies undertaking such efforts. This study was launched through the efforts of the Research Committee of The Conference Board's Contributions Council, and other companies and foundations. The Conference Board is grateful to these organizations and to the Urban Institute, whose staff researched and wrote the report. PRESTON TOWNLEY President and CEO EXECUTIVE SUMMARY The poverty neighborhoods of U.S. central cities contain within their boundaries the most concentrated, difficult social problems that the country has to face. Corporate commitments to help rebuild these communities are relatively new (see box on p. 8 for a summary of corporate initiatives by type of strategy). Until recently, corporations have largely avoided involvement in the inner city. The scale of problems has seemed to doom corporate initiatives to failure, threatening to open the way for unlimited claims on corporate resources. Now, however, many corporations are joining with government and community groups as partners in rebuilding strategies. In part, this commitment acknowledges that business is a stakeholder in the success or failure of an entire urban reason) A corporation's headquarters can be jeopardized by deterioration of surrounding neighborhoods, and the productivity of its work force threatened when youths are subjected to poor schooling or drawn into criminal activity. Corporations have found that, though they cannot replace government or community organizations, either as funders or policy designers, they can bring special capacities to a partnership. They possess a focused energy and goal orientation that can help galvanize the other partners. Key Lessons This report examines the experience of corporations as partners in central-city community-building. For the most part, it is very recent experience, so more than ordinary caution is called for in interpreting it. Nonetheless, some common lessons emerge: Community-building must adopt "comprehensive" strategies but must stay focused to maximize resources. Corporations in the past have concentrated their efforts on activities that have the most direct payoff to business, such as improving school performance or work-force training. Changing the role of a few institutions, even critical ones such as schools, however, does not effectively reach house- holds in all the ways that are needed. There is need for a simultaneous assault on job access, housing availability, social services, and the capacity of community groups to plan for their own future. Limited resources, however, may warrant a focus on something more defined such as a geo- graphic region, or a set of cross-cutting issues (capacity- building, system reform). Community initiatives work best when there is a strong sense of community ownership. At the outset, residents can become "owners" of their community by owning their homes. Many corporate programs set home ownership as their first goal, believing that once residents are owners they will see themselves as having a greater stake in community success. Beyond this literal form of ownership, the community needs to buy into the strategy of community change and take ownership of the planning and priority-setting process. Short-term tangible successes help communities fully commit to a strategic plan. Skepticism abounds in most poverty neighborhoods sufficiently trust the planning process or the staying power of their government and business partners to throw themselves into long-term strategy design until the partnership has produced some tangible results. Action has to precede and lay the groundwork for planning. Corporations are most likely to stay the course as partners when they see themselves as benefiting from the partnership. Philanthropy and social vision play a role in every inner- city partnership. The most enduring partnerships, how- ever, are those where the corporation itself is also gaining. These benefits can come in many forms: from corporate interest in the stability of an adjoining community to financial interest in entering an inner-city market to concern for the social stability of an urban region or the quality of the regional work-force. Difficulties and Risks Neighborhood development projects involve special difficulties and risks that should be recognized up front. Underestimating barriers leads to frustration on all sides. Stabilizing a community requires long-term commitment. Based on corporate experiences to date, a decade is an appropriate time frame in which to expect results. There is little that corporations can do to accelerate this process. Residents must be won over as participants, set realistic goals and priorities for change, and then implement projects with future payoffs. The start-up process can be particularly frustrating for corporations that are eager to begin work but encounter a community held back by skepticism or indifference. The chances for ultimate success are unknown. The track record for the new generation of corporate partnerships is being compiled now. With little historical data, it is hard to assess whether a particular partnership is accomplishing as much as it should. The record of urban renewal and government urban programs, however, demonstrates how difficult it is to turn around entire communities. Except in a few areas, such as housing construction, it has proved difficult to establish reliable yardsticks to measure progress, especially in the early years of a plan. This places greater weight on informal, Qualitative assessment of programs to sustain momentum. Projects are likely to have high political exposure and may become entangled in political disputes. Communities, unlike many corporations, do not have clearly defined missions. Different groups will have different goals for the community and different strategies for achieving their goals. Corporations that join with community groups as partners may be drawn into local political disputes that they do not fully understand, and which may escalate in unpredictable ways. Strategies The risks involved make it critical for a corporation to choose its partnership strategy carefully. This report weighs three basic strategies: A direct partnership between a corporation and particular neighborhoods works best when the corporation has a large and stable presence in the community. It then can be a predictable partner, working toward its own goals as well as the community's. The Atlanta Project, initiated by former President Jimmy Carter and one of the most ambitious community projects, is now experimenting with a generalization of this approach, where individual corporations are matched with different neighborhoods under a supportive central structure. This pilot program deserves close observation as it moves into the middle- and end-stages of its multi-year strategy. A corporation entering the inner-city markets can facilitate entry by designating a community organization as its partner. Corporations have discovered that the inner city provides a viable market for such operations as grocery chains or mortgage lending. However, marketing has to take into account community customs. A community partner can help introduce a corporation to the local market, while using the new business activity as a leverage point to accomplish its broader agenda of community development. In this model, each partner specializes in what it does best-the corporation in providing economic services, and the community development group in ensuring that resources are rein- vested in the community. For many corporations, it is prudent to begin inner-city community-building through specialized intermediary organizations. Over the last decade, a number of specialized intermediaries have emerged. These pool corporate resources-both financial and human resources-and connect the corporate world to local community groups. No single corporation has to get too far out front. Successful intermediaries have one foot in the communities and the other in the corporate world; they bridge the two cultures in a way that encourages mutual trust. Monitoring Experience Community-building is a new field for corporations. Corporate experience is being accumulated at a rapid rate, often in conjunction with parallel programs sponsored by private foundations or public agencies. If this abundance of local experienced myriad of local pilot programs-is monitored carefully, it can greatly accelerate the corporate sector's learning curve. WHAT IS COMPREHENSIVE COMMUNITY DEVELOPMENT? The poverty neighborhoods of U.S. cities are a weight on the national conscience. Persistent poverty and violence have suppressed opportunities traditionally open to youth. One recent study found that in the poorest neighborhoods of Philadelphia, more than 94 percent of males between ages 20 and 29 have been taken to a hospital emergency room at least once, almost half for gunshot wounds. In many central cities, nearly half of all students drop out before they graduate from high school. Corporate employers, with reason, question the value of diplomas for those who do make it through the public school system. Society is quickly learning that the problems of central- city impoverished neighborhoods cannot be tackled discretely. Even where successful, attacks on housing blight alone have not been able to greatly change community conditions or the life chances of residents. School reform as an isolated strategy is similarly limited. In competing for youths' attention, schools must do battle with street gangs, peer pressure, lack of structured after-school activities, the income-earning attractions of crime or drug-dealing, as well as family poverty, and few perceived avenues to legitimate work. As John Jenkins, senior vice president of Marriott and corporate adviser to The Atlanta Project notes, corporate support of education reform is a critical piece of any revitalization effort and "an area where business can make a significant difference, [but] companies that believe they can effect substantive change by improving math education are fooling themselves." A comprehensive strategy for neighborhood intervention is necessary to make significant and lasting change. This view has been built into the federal Empowerment Zone demonstration program, which would grant a combination of tax incentives and employment credits for businesses, increased human service and job training dollars, and other incentives for six urban and three rural areas to undertake redevelopment efforts. Part of the 1993 Budget Act, the program requires community groups, businesses, and government to frame a coordinated development plan for each proposed zone. Most of the community-building efforts supported by foundations now emphasize human services coordination on the neighbor-hood level, coupled with nongovernmental family support activities and jobs access. Business is coming to a similar conclusion through its own experience. Corporations are becoming convinced that they must move beyond single-sector initiatives if they want to change communities. "Comprehensive" community strategies can take different forms, but they have in common two fundamental traits:
Why Business Is Concerned Is it reasonable for corporations to make the kind of commitment to neighborhood building that is necessary to stabilize a community? After all, corporations, like most middle class households, can simply move away from poverty neighborhoods and their problems. The companies that have made long-term commitments to individual communities usually have had special reasons for doing so. They may have large investments in a particular area, so that it is more cost effective to protect the investment by strengthening the community than to retreat to another location. Or, a corporation may draw a large proportion of its labor force from a particular area, and be concerned that deterioration of the community will cause a deterioration of its work force. Marriott in Atlanta, for example, draws almost half of its local work force from areas targeted by The Atlanta Project. Other corporations become involved in community development as part of their normal business activity. Supermarkets, retail outlets, and mortgage lenders all offer products that low- income communities often lack. They can profit from expansion into the central-city market, but only if done in a style that the community supports. These companies increasingly have sought out institutional partners in the community. On the one hand, the community partner paves the way for local acceptance and can help a company screen for a responsible labor force. On the other, its participation ensures that some of the benefits of economic activity will be reinvested in the neighborhood for long-term community development. Not all companies, of course, wish to have personal exposure to central-city poverty areas. Many prefer to work through specialized intermediary institutions (see box, "Business for Social Responsibility"). Most of the corporations that have made commitments to community-building, whether direct or indirect, however, have community service as part of their corporate mission statement. In the long run, profit maximization and community-building are fully compatible. In the short run, there are bound to be conflicts that can be solved by compromise only if both goals are part of the corporate mission. Risks and Costs in Community Partnerships Comprehensive involvement in a community can pose difficult challenges for a corporation. These should be recognized and planned for at the outset. Need for long-term commitment. A minimum commitment of 8 to 10 years is likely to be necessary to make a substantial impact on community conditions. As one corporate participant states, "The problems did not happen overnight and to think that they will be solved overnight is a big mistake. " It takes time to win community trust, design an effective intervention strategy that comes from the community, and wade through the bureaucracy to initiate projects. The pay-off comes years later. Most corporations enter into community partnerships recognizing that a long-term commitment is needed. Even so, they typically underestimate the gestation period. The Atlanta Project signed on corporate partners for a five-year commitment. It now appears that that time frame will not be long enough to accomplish the changes program designers hoped would occur. Community skepticism to corporate intervention. Most neighborhoods carry a legacy of distrust that can be overcome only by continuing personal presence in the community. For hands-on projects, corporations will need to designate one or two permanent contact people to interact with the community, and, from time to time, will have to muster large numbers of volunteer workers. The community's own involvement in self-help projects or in strategy design may be meager, especially at the beginning. Companies that expect to launch their community partnership with a "big bang" and to leave follow- up to the community are likely to be disappointed. Potential controversy. Most communities are more diverse, even splintered, than may be apparent at first inspection. Different ethnic and economic groups may come to the table with conflicting priorities, aspirations and plans for action. A corporation entering the community development field is likely at some point to be drawn into these local controversies. By collaborating with one neighborhood group it may antagonize another. By endorsing one program of action it may be seen as rejecting the needs of other residents. The losers in local struggles for power may find it convenient to blame an outside corporation, no matter what has happened in reality. Such community disputes may easily escalate to city-wide attention through newspaper articles or television broadcasts. Potential for success is unknown and actual success hard to measure. Corporations have completed few long-term, development programs. Therefore, there is little empirical basis for projecting the chances of success. We do know that only a handful of communities have been turned around by public programs, so the odds are formidable. Even the standards to be used to measure "success" are likely to be unclear and controversial. In fact, one of the most difficult steps in all partnerships has been to convince the community of the desirability of specifying objectives in such a way that progress towards them can actually be measured. Selecting a Strategy for Community Involvement By weighing the risks involved in community development programs and the length of commitment required, corporations can choose the right intervention strategy for them. This report considers three broad models of intervention. Direct corporate involvement. Direct corporate partnership with a community carries the highest risks and the highest potential rewards. It is a strategy that is appropriate only when a company is willing to commit substantial human resources to community collaboration and believes that there is value to itself as well as to the community from partner- ship. Corporate involvement on this scale is most likely to make sense when a corporation has a large presence in the community. It can then be seen as a stable partner, and can benefit fully from the goodwill its participation generates. When a corporation's headquarters is located adjacent to the neighborhood(s) it is trying to help, the identity of interests may be easier to see. According to Bill Hall, president of Hall Family Foundation/Hallmark, "Mere is a parallel interest between business and communities because they have the same goals-low crime, higher property values, educated population, improved physical conditions-and will both benefit from reaching those goals. You need to understand that what is good for the community is also good for business." Community partnership around a business core. A second strategy builds more directly on corporations' business strengths, while relying on community partners to take responsibility for comprehensive development. Companies like Ben & Jerry's Homemade, Inc., Pathmark Stores Inc., Huntington National Bank, and J.P. Morgan have found it possible (and profitable) to integrate community development objectives into their normal business operations. The company pursues its profit-making activities, but takes on a comprehensive community organization as its partner. The partner may be the co- owner of an enterprise or a planning partner that helps direct the company's activities to benefit the community. The growth potential for this model is large. An expanding number of companies have demonstrated that it is possible to pursue business profitably in the central city with a community partner. As suburban markets in some industries (like the grocery business) become saturated, or as government regulations (like the Community Reinvestment Act) require firms to devote more attention to the special needs of inner-city customers, the demand for community partners of this kind is likely to grow. Reaching communities through intermediary institutions. A third model of partnership uses intermediary institutions to reduce time and staff communities and diminish political visibility of individual companies. The intermediaries assemble financial and technical support from a number of different corporations. They are staffed by professionals who take on he primary responsibility for contact with community organizations. Typically, most of the neighborhood work is decentralized to these community organizations. The intermediary may be a local foundation like the Cleveland Foundation and its Community-Building Initiative (see p. 35); a specialized institution set up to bridge the distance between business and community groups, such as the Local Initiatives Support Corporation (LISC) (see p. 37); or an organization put together to meet the needs of a specific community by targeting business resources in a certain way, Eke the East Bay Funders Collaborative (see p. 36). All of these organizations are vehicles for mounting a collective business response. A corporation wishing to enter a community partnership does not have to select one of these "pure" models. It can combine direct involvement in a neighborhood with the use of a specialized intermediary for activities where it has had little experience of its own. It can modify its strategy as it gains experience--opting for direct involvement in certain areas after it acquires familiarity with neighborhood organizations and problems, or moving from business involvement only to broader neighborhood participation as its identification with the community grows. Following are in-depth case studies of the three models of company intervention in community development. DIRECT INVOLVEMENT OF CORPORATIONS IN COMMUNITIES Corporations have long been involved in the communities where they have headquarters or branch operations. They have supported the arts, contributed to revitalization of downtown business districts, and fostered city-wide school reforms. Direct partnerships with poor neighborhoods have been rarer. Until recently, corporations have not seen much similarity of interests among themselves and poverty neighborhoods. They have left social welfare functions to government or nonprofit organizations, supported by corporate financial contributions to United Way or similar umbrella groups. The impetus for direct involvement has largely come from a greater sense of risk. Corporations' large central-city investments can see these jeopardized by the deterioration of adjoining neighborhoods. Companies with production plants often hire directly from nearby neighborhoods. As the quality of schooling deteriorates, and youths' self-discipline gives way to street values, the repercussions are felt in corporate labor productivity. Companies that have engaged in "hands- on" neighborhood partnerships report guiding principles that can improve the chances of success: Work closely with the community. Corporations should enter partnerships ready to roll up their sleeves. Short-term results help communities build their confidence in longer- term strategies. Permanent personal contacts with a corporation also help build trust and day-to-day communication. Be prepared for a long-term commitment. Community change is a demanding process that takes a long time. A decade is Rely to be the time frame needed. Corporations have discovered that there is not a great deal that they can do to accelerate this process. Communities have to become ready to take over leadership, and all the corporate energy in the world cannot substitute for a community's own learning. View residents as equals, but be realistic about what they can and cannot do. In every collaboration, both partners have a unique set of resources and skills. Corporations need to acknowledge that the community has its own goals and its own assets, even though it may not be able to immediately articulate these. It may or may not have the kernel of a plan for changing local conditions. It almost certainly lacks the 'know-how' and resources to implement plans effectively. Demand results, but do not expect miracles. One of the greatest contributions that corporations can make to a partnership is the insistence that plans get translated into reality. Measurable results are important. However, it is equally important to set modest initial goals, so that the partnership sees some early successes. Establish expectations early. A frank discussion of what each partner is willing to contribute, what responsibilities each is willing to assume, and what goals and expectations each has can help avoid misunderstandings later. A similar discussion between the corporate officials responsible for community projects and top management is desirable. Corporate executives may have unrealistic timetables for how fast things will change. Expect failures, both big and small. Events canceled at the last minute, only two people showing up for a meeting, and disagreement about priorities are all part of the process and an important part of its evolution. One of the corporate partners noted, "It is important to give the community enough rope to spend money, prioritize, and execute plans, even if they hang themselves once in a while." Future success often comes from lessons learned from past failures. Have CEO leadership support. Support from the top is critical to success. It will facilitate mobilization of the resources needed to carry through corporate commitments. Recognition of community volunteer activities in performance appraisals can help institutionalize these values. Investing In The Community: Corporate Responsibility And Self-Interest Hallmark Cards, Inc., Kansas City, Missouri The Upjohn Company, Kalamazoo, Michigan Two companies with long histories of commitment to community development are Hallmark Cards, Inc. and The Upjohn Company. Their experiences provide perspective on the evolution of business-community partnerships. Both Hallmark and Upjohn initially were drawn to community investment to protect their headquarters locations. Both supported what might be called corporate-led urban renewal. Their involvement subsequently has spread into other activities necessary to strengthen the downtown community-first, housing restoration and home ownership pro- grains, then human and social services, and finally comprehensive programs to stabilize entire neighborhoods. Hallmark has given priority to the neighborhoods that are closest to its headquarters. Kalamazoo is small enough to qualify the entire county as a single community, though Upjohn is now giving special attention to the poverty neighborhoods within it. Corporate investment in both cases began because of the special ties between the companies and their communities. Hallmark Cards has been an integral player in the development and redevelopment of Kansas City for almost a century. Founder Joyce C. Hall believed that the atmosphere of Kansas City was in part responsible for his company's success and made giving something back to the city a personal and corporate mission, reflected in the mission statement (see box, "This Is Hallmark"). According to Bill Hall, president of the Hall Family Foundation, the company operates with "enlightened self-interest," the realization that what is good for the community is also good for business. Upjohn's commitment to the Kalamazoo area likewise is "rooted in a history of blending civic philanthropy with protecting the bottom line." As Upjohn must compete with other corporations to recruit highly skilled scientists, it gives high priority to upgrading and maintaining the community's quality of life-making community development a fundamental corporate interest. Downtown Redevelopment At the time Hallmark embarked on downtown redevelopment, its corporate headquarters was becoming surrounded by abandoned buildings and garbage-strewn lots. Crown Center Redevelopment Corp., a wholly owned Hallmark subsidiary, was formed to help alleviate urban blight and create a central place where people could live and work. Twenty-five years after ground was broken, Hallmark's half- billion dollar experiment in urban renewal is the centerpiece of Hallmark's redevelopment efforts in Kansas City and is considered to be the "jewel" left by founder Joyce Hall to Kansas City. The complex contains hotels, offices, retail out- lets, cultural venues and housing. It was one of the first mixed-used (housing, office space, retail space) urban redevelopment projects in the United States, and has been emulated in many other cities. Crown Center has been important to Kansas City's identity. It has kept Hallmark in its downtown location, and has been moderately successful in retaining and re-attracting middle-class households to the area. It also has been instrumental in the city's overall effort to stimulate tourism, convention business, and downtown commercial/retail development. Since Hallmark is a privately owned company, it has been able to accept a level of return on its Crown Center investment that might not have been acceptable to others. However, the Crown Center complex continues to expand and the corporation continues to buy and manage property with the intention of revitalizing surrounding blighted areas. Hallmark's long-term plan is to acquire property and help reactivate the market for development in midtown Kansas City. Through lending grants, land banking, and general sup- port, Crown Center has helped stimulate development, including a very successful Residence Inn, in the Union Hill neighborhood, newly built low- to moderate-income housing, and a Ronald McDonald House for sick children. In Kalamazoo, Upjohn and community leaders for years sought to revitalize the downtown area near Arcadia Creek, an area that borders on the city's fragile Northside. A major downtown facility, the Kalamazoo Center (a hotel and conference center) had fallen into serious disrepair and was contributing to the area's decline. Upjohn stepped in to "rescue" the property, investing over $17 million in renovations beyond the purchase price. Upjohn's commitment was the catalyst for others considering development in the area and has resulted in approximately a $ 100 million downtown renovation project called Arcadia Commons, which now includes a downtown campus of Kalamazoo Valley Community College designed to attract more than 5,000 students to the area; The New Museum, a public museum being built primarily through private donations; the West Michigan Cancer Center; and the First Bank of America Corporate Office. Like Hallmark, Upjohn is unlikely to see a competitive return on its real estate investment. Nonetheless, it views the project as a "successful business decision, not charity." With a $300 million research complex in the area, Upjohn has a big stake in maintaining the economic and physical stability of the region. Investing in Neighborhoods Moving beyond the city core, both Upjohn and Hallmark have sought to stabilize neighborhoods by restoring housing and increasing home-ownership rates. "Citizen ownership" of the community, evidenced first by homeowning, is considered to be critical in convincing residents that they have a stake in the neighborhood. Upjohn's experience in addressing the city's low- and moderate-income housing stock illustrates one strategy of entry into a new field. Since the company knew that housing was out of its range of expertise, it hired the Local Initiatives Support Corporation (LISC) in 1987 to conduct an initial survey of the housing stock and to make recommendations about what the company and community could do. The survey showed relatively strong potential for redevelopment, including good physical quality of housing, a strong and active network of community organizations, and a supportive lending community. Though initially unwilling to set up operations in a small city, LISC was swayed by the strength of community resources and a three-year start-up grant of $885,000 from Upjohn. Kalamazoo LISC has been able to leverage $11 for every donated dollar from lending institutions, the LISC National Equity Fund, and a variety of federal, state and local government sources. As it does for every project in which it is involved, the company set several specific objectives against which to measure progress toward the organization's goals. Philip Carra, corporate vice president for public relations and chair of the local LISC Advisory Panel, is the first to admit that "standard corporate measurements don't work in these situations, but outcomes and planning are very critical." As a corporation, Upjohn sets internal goals for every project. According to Carra, Upjohn's first priority for their affiliation with LISC was to involve a minimum of 90 percent of the local lending community in support of LISC's activities-a goal they have exceeded. Their second priority was to meet the production goal of 150 new or rehabilitated units within two to three years. In that time frame more than 400 units were produced; to date, more than 620 units have been built or rehabilitated expressly for low-income families.-Two representatives of Upjohn serve on the LISC Advisory Committee responsible for reviewing applications and providing general guidance. Hallmark Cards has similarly supported housing investment in its targeted neighborhoods. It has been a silent investor in the development of both low- and moderate- income housing and in the restoration of more expensive units designed to attract young professionals back to the urban core. One issue that has united neighborhood groups and the corporation is the over-concentration of group homes in the area. Currently, there are 18 group homes within the 30 blocks surrounding Hallmark's production plant. The company assists the neighborhoods in lobbying state and local governments to change the siting process so as to disperse group homes more evenly. Hallmark has also provided support to individual homeowners for redevelopment, support for removal of drug houses and support for the neighborhood school. Human Services The third leg of a comprehensive community strategy has been human services, including both education and social services. In 1986, Upjohn established the Kalamazoo Area Math & Science Center (KAMSC) with a $2 million donation as its centennial celebration gift to the community. KAMSC was the result of several years of research and consensus-building to create a program to address the problems of reduced school funding, shortage of qualified madi/science teachers, and declining enrollments in rnath/science courses. Upjohn worked closely with school administrators, teachers and the community to investigate similar programs elsewhere, identify the major issues, and design a program that meets the needs of the community. Now administered by a consortium of local school districts, KAMSC operates by way of an unusual, creative partnership between the public and private sectors. Though under the control of the schools, the Center continues to, draw on the resources and counsel of private industry. Upjohn continues to support KAMSC through equipment donations, selected staff support, scholarships and mentoring. Upjohn also played a key role in the formation of The Family Institute, a human services agency that offers local residents a conduit to social services in the county, including child care, health care and counseling. Dr. Theodore Cooper, late chairman and CEO of Upjohn, worked closely with a coalition of community/religious organizations, who had come up with the original plan, and public agencies to design and implement a highly integrated community family support system for families with children up to the age of six. Upjohn provided not only leadership and some "muscle" to convene key players, but also provided funding and administrative support for the planning process. Designed as a one-stop center for social services, the Institute helps overcome the bureaucratic hurdles that prevent families from accessing needed services. Upjohn continues to con- tribute to the development of the Institute through the volunteer efforts of employees. Improving Institutional Infrastructure The final step in a neighborhood strategy is to support or create self-sustaining institutions that can carry on the work without close corporate involvement. Hallmark works closely with the neighborhood associations in Union Hill, Longfellow, and other target neighborhoods. Its philosophy is to serve as an expediter of community-identified priori- ties. Hallmark and other Kansas City companies helped create the Kansas City Neighborhood Alliance (KCNA). A respected and powerful force in many of the city's neighborhoods, KCNA provides direct assistance to a number of neighborhood associations. In addition, it is the leading nonprofit developer/facilitator for the production of low- and moderate-income housing in the city and an advocate for the needs and concerns of neighborhood groups. Colleen Hernandez, president of KCNA, describes Hallmark as "a good corporate neighbor and partner in the problem-solving process. They don't try to sell the neighborhoods on their own game plan, rather they respond to the plans and ideas the neighborhood generates." The company has evolved into a significant funder of many social service programs in Kansas City involved in the betterment of the inner city, contributing more than $10 million since 1986. A Multifaceted Approach To Revitalization United Services Automobile Association (USAA) USAA Federal Savings Bank (FSB) San Antonio, Texas USAA and its subsidiary USAA Federal Savings Bank numerous approaches to community involvement and support. The bank has formally adopted four priorities for its community work: affordable housing, human services, education, medical research and economic development programs-in addition to providing traditional banking services to communities in need. USAA FSB views these areas as inextricably linked, believing that just renovating housing or just mentoring students will not lead to self- sufficiency or a significantly improved environment. To this end, USAA FSB "keeps its fingers in many pots." It both operates neighborhood-specific programs in two low- income San Antonio neighborhoods--one primarily Hispanic and the other African-American-and maintains county-wide activities. There are few formal linkages between individual programs, but each is selected to con- tribute to the overall goal of "total" community development and to build coalitions among those involved in the redevelopment process. USAA FSB sees its role as that of an advisor, funder, and facilitator, rather than as a work-direction leader. It works closely with community groups and non- profit organizations to build their capacities and to support their goals. Generally, it does not bring its own agenda to the table, but defers to the goals and objectives set by the individual projects. The one exception is the mentor program, which was initiated by USAA but has since been formalized within the city's Educational Affairs Department. Establishing a Mentoring Program According to Silvia Pena, community outreach administrator, "one of the best ways to get to the roots of the community is to go through the schools." For this reason and because of concern about the implications of low educational achievement for business and the community generally, USAA and USAA FSB are actively trying to improve and supplement the educational system in San Antonio. One of their most successful endeavors has been the Mentor Program, initiated in 1988 at the request of then USAA Chairman and CEO General Robert F. McDermott. A survey to assess community needs determined that a mentoring pro- grain would be the most useful contribution the company could make. The goals of the programs are to reduce the dropout rate, improve basic skills, and alleviate some of the social problems that affect educational achievement. The program was piloted with 60 volunteers divided between an innercity elementary and junior high school. Today, the pro- gram has more than 1,000 employee volunteers in 8 elementary, 3 junior high, and 2 high schools. The Educational Affairs Department administers the program. From the beginning, the company insisted that formal evaluation be done to track student progress. The Educational Affairs Department developed a system to monitor improvement in grades, attendance, behavior and attitudes. Results thus far have been positive at all grade levels -with students showing increased academic performance, less absenteeism, better behavior and more positive outlooks on school and their future. The program's recent five-year plan hopes to follow students over a five-year period through high school to determine what impact mentoring and other related activities have on the students' performance. It seeks to expand laterally, eventually encompassing all the elementary and junior highs that feed into the two high schools to ensure the continuity of support needed to begin to make a measurable difference. Increasing Self Sufficiency and Building Bridges USAA FSB is also an active participant in housing development in San Antonio's Eastside (mostly African- American) and Westside (mostly Hispanic) neighborhoods. They have partnered with Neighborhood Housing Services (NHS), Habitat for Humanity of San Antonio, and the San Antonio Housing Authority to both increase home owner- ship and facilitate working partnerships between the public and private sectors. Recently, Judy McCormick, Regulatory Affairs and Community Reinvestment Act (CRA) assistant vice president and chair of the NHS Board of Directors, helped NHS put together the First-Time Homebuyer Pro- gram. The program pooled HOME moneys, a grant from the Federal Home Loan Bank, and mortgage loans from five local lenders including USAA FSB. The cooperation among the five banks in support of this program marks one of the first collaborative efforts they have undertaken. The Homebuyer Program will provide 30 families with an opportunity to buy homes at a substantially reduced cost. According to Pena, "building houses is important, but if the people living in the houses don't understand how to pay the mortgage or the responsibilities of owning a home, then the benefit is not as large." To provide additional services to new homeowners, USAA FSB was instrumental in creating the Family Self-Sufficiency Program (FSSP) based at the San Antonio Housing Authority. The program was initiated to meet new federal requirements mandating that organizations receiving Community Development Block Grants had to create programs to make welfare a temporary state, rather than a way of life. Pena describes the program as an "opportunity to shift paradigms." USAA FSB brought the key players to the table including representatives from the housing authority, school district, department of human services, city and county governments, and the private sector. FSSP is designed to break the cycle of poverty by pro- viding families with affordable housing, teaching basic living skills (budgeting, home repairs), and assigning teams of volunteers to act as mentors. Currently there are 143 families in the program; 56 are located in one of the city's most notorious housing projects. They are able to move into better housing, and gain access to an array of services to get them into school or into a job. In return, however, the families must make a significant commitment to the project. Parents have to commit to being in school or at work and to take responsibility for their children's school attendance as well. After about two years in operation, the program is seeing the beginnings of success. A formal evaluation is scheduled within the next few years. (For another example of a comprehensive commitment to a low-income neighborhood, see box, "Community-Building in Puerto Rico," on p. 19). Multiple Corporate And Community Partnerships The Atlanta Project, Atlanta, Georgia The Atlanta Project (TAP), announced by former President Jimmy Carter in October 1991, is the logical culmination of the model of direct corporate partnerships, and one of the most ambitious community projects ever taken on by the corporate sector. The project matches 20 "cluster" neighborhoods in the city with corporate partners (see list of corporations involved in the project) within a supportive central structure. The project's goal is to empower citizens to solve problems they identify in their neighborhoods and to foster lasting connections between the neighborhoods and government agencies, nonprofit service organizations and the business community. TAP's comprehensive approach focuses on six major areas: community development, economic development, education, housing, health and public safety. TAP has hired cluster coordinators who reside in the neighborhoods to encourage a true "bottom-up" approach to problem solving. The corporate partner of each neighborhood is responsible for helping the community prepare a strategic development plan that reflects the community's priorities and capitalizes on its assets. Each corporation has loaned an executive who will work with the cluster coordinator and the neighborhood steering committee for five years. The long-term commitment is an essential feature of the project. Another is the intense level of involvement expected from the corporate partners. The project relies heavily on corporate volunteers, but also looks to the corporate partners as strategic implementers who can take vaguely defined community aspirations and translate them into a feasible work program. Mobilization of Corporate Support President Carter had always planned to involve corporations in the project, mostly through cash donations and volunteers. During a meeting with Bill Marriott, Carter found him supportive, but unwilling to make a simple financial commitment. Instead, Marriott wanted to have some input into the process of community change and contribute the expertise and strengths of his organization. Thus, the idea for the corporate partnerships was born. Executives from all the corporations interviewed cited similar reasons for getting involved: (1) to preserve the economic stability of Atlanta and, therefore, protect their own investments in the city; (2) to ensure that a competent, healthy and educated work-force will be available to them in the future; (3) to have a more directed outlet for their philanthropic dollars; and (4) to "do the right thing for the city that has done right by us." To support the project, 22 corporations agreed to provide an executive for five years. Some have provided additional in-kind donations and other support to the clusters and the project generally. In return for their investment, the corporate partners expect results. While they do not envision the eradication of poverty and urban decay, they do expect to see measurable progress toward neighborhood goals. The corporate focus on tangible progress toward clearly defined objectives has sometimes collided with neighborhood reality. For example, the Marriott Corporation arrived for its first meeting in the Crim Cluster with a neighborhood development plan it had constructed on its own. It quickly became apparent that the community did not want to buy into a corporate-designed strategy. Marriott's plan was dropped from the agenda. However, putting together an alternative plan with specific objectives, measurable outputs, and an underlying strategy that the different segments of the community can endorse has proved difficult. The Corporate Role The exact role of the corporate partners has been defined differently in each TAP neighborhood. In some ways the project is structured to encourage corporations to serve as technical staff for the community, but other forces often propel them into more of a leadership position. In some clusters the corporate partners "run" with projects on their own, while other corporations let communities take the lead. Either mode of operation can be successful as long as both parties have agreed to the strategy. One partner cautioned that "while you opt to take a back seat in generating ideas or suggesting solutions, you don't want to get so far out of the loop that all you do is pay for things ... [still] you don't want to get into a position where the community becomes too dependent on you to take action and initiate ideas." Marriott and the Crim Cluster have settled on a middle ground where Marriott does develop ideas on its own, but always supports the objectives of the cluster. In conjunction with Crim leaders it was decided that they would focus on the development of human capital-to build leaders, educators and productive citizens. AU of the programs and activities they have been supporting in the cluster revolve around this goal. Marriott has initiated two very successful programs in the Cluster. The first placed 26 cluster high school students in eight-week summer internships with law firms throughout the city. In addition, Marriott matched students with a mentor and ran a program to teach basic business skills, office decorum, responsibility, and what to expect on the job. None of the participants dropped out of the program; 25 percent of the participants were retained by their firms through the school year. The program hopes to place more students in the summer of 1994 as well as to expand into accounting and business. Marriott also initiated a program through a cluster magnet school that focuses on business. To provide a hands-on supplement to their curriculum, Marriott donated all of the usable furnishings from a recently renovated property so that the students could set up a small business. A group of students set up a store and sold furniture to local residents and community groups at low prices. The students got hands-on lessons in entrepreneurship, accounting, inventory control, and sales, and more than $7,000 in profits were directed to school programs. All of the corporations mobilized volunteers en masse to canvass homes during the Immunization/Children's Health Initiative and have been on hand for renovation campaigns and other projects. Though the corporations have had no trouble mobilizing volunteers from their own ranks, all have had difficulty mobilizing broad community support and keeping people interested over the long term. One of the primary goals of each of the clusters is to get residents to take responsibility for creating and nurturing the whole community, not just their street or their school. Many of the corporate partners report that their communities as a whole have not really come on board yet. Sometimes it has been difficult to sustain support from one event to the next. According to a cluster coordinator, "It is relatively easy to get a group to work on an issue that directly concerns them, but difficult to keep them interested if the next project doesn't directly impact their lives." Unlike corporations, communities are rarely united around a single mission. Part of the cluster coordinators' charge is to get the various groups in the community to view themselves as parts of a whole. The difficulty clusters are having in generating wide- spread recognition and support points to one of the major problems faced by TAP: How can you create a community strategy for long-term change with input from only a few members of the community? While still committed to the idea of seeding long-term projects, Arthur Andersen, another of the corporate partners, has recognized the need to change its own expectations and strategy and is working with the cluster on a few short-term events to stimulate interest and familiarize people with the project. Comprehensive planning will begin once they have more community support and input. (See box, "Mobilizing Resources and In-Kind Contributions."on p. 22) All the corporate partners in TAP agree that the project remains far from its goal of effecting comprehensive change. Most of the successful neighborhood initiatives have been stand-alone projects. It is hoped these are building the base for more strategic cooperation in the future, but this remains to be seen. BUSINESS-ORIENTED PARTNERSHIPS WITH COMMUNITIES Business-oriented partnerships, where companies concentrate on what they do best-running a business- are increasing in number due to the growing recognition that doing business in inner-city areas can be profitable and empowering for the community. Successful partnerships require interaction with the community and a clear business focus. Company experiences reveal some general rules for success: Treat partnership opportunities with communities as you would any other. When exploring the possibility of a partnership with the Newark New Community Corporation (NCC), Pathmark Stores, Inc. undertook an extensive feasibility study and checked out NCC thoroughly as it would any prospective partner. While a corporation may choose to make some concessions to facilitate the partnership arrangement, involvement with a partner or a project that is unstable is not to anyone's benefit. The corporation will suffer a loss of time and money and the community will suffer from another round of broken promises. Interact with community. Whether it is done directly or - through an intermediary community group, it is important to communicate with the community. The corporation needs to secure buy-in from the community so that implementation can move forward. It also needs to follow through in monitoring to make sure the services provided are meeting customers' demands. Modify instead of overhaul. Inner-city business ventures will require some special modifications to suit the clientele. They do not, however, require an entirely new way of doing business. Paul Taylor, president of Paul Taylor Associates, a for-profit community development consulting firm, explained, "People are people. Poor people want the same things as everyone else. While they may need some additional help in achieving their goals, they don't want to be, nor do they need to be, treated differently." Be realistic about time delays. Urban projects, especially those involving complex financing packages and construction, are notorious for their long delays. "Be prepared," warns John Marquees, director of finance at Pathmark. "Things will not go smoothly. It is to your benefit to get a strong partner on your side." Understand and endorse, but do not dictate community goals. Community development organizations often have quite simplistic, even idiosyncratic, development strategies. A corporation forming a partnership should understand these strategies and make certain that it can endorse them. Once this is confirmed, the corporation can provide help when asked. Building A Supermarket In The Inner City Pathmark Stores, Inc. Newark New Community Corporation Newark, New Jersey Pathmark Stores, Inc.'s (formerly Supermarkets General) partnership with the Newark New Community Corporation (NCC) brought together the diverse experiences and resources of two established groups to attack the problems of the inner city and stimulate economic development through the construction of a shopping center anchored by a supermarket. It allowed both partners to "do what they- do best" in pursuit of a common goal. Like many community development groups, NCC began by building housing and then expanded its focus to create a comprehensive development agenda encompassing three critical areas-housing, social services and economic development. NCC has developed and currently manages over 2,500 low-income housing units. It also provides a wide range of social services including six day-care centers, a domestic violence shelter, transitional housing for homeless families, numerous educational programs for youth, home health care and medical day care programs, an extended care facility for Medicaid patients, and transportation service. In the area of economic development, NCC has had a good deal of success in creating jobs and keeping money in the community. NCC has created over 1,200 jobs through seven for-profit businesses and maintenance/security forces for the housing units. NCC began planning the project in 1980 and approached New Jersey-based Pathmark Stores, Inc. in 1984 as a potential joint-venture partner. They were attracted by Pathmark's previous experience as a joint-venture partner with the Bedford-Stuyvesant Restoration Corporation to build a supermarket in a distressed section of Brooklyn. Because of this experience and the solid foundation that NCC had established in the community, Pathmark became interested in the partnership. Not only did they see an opportunity to service an underserved market with no competition, but also to do something good for the city where they had their start. There were a number of financial incentives to locate in Newark: (1) state urban enterprise zone benefits, which would allow the store to charge half the state sales tax on nonfood items and eliminate sales tax on equipment purchases, and (2) a $1,500 = credit for each Newark hiree who had been unemployed for three months. The partners worked out the management agreement early on and then tackled the arduous task of assembling the land and coordinating the financing package. The New Community Neighborhood Shopping Center opened in July 1990, anchored by a 43,000-square-foot Pathmark. Under the agreement with NCC, Pathmark Stores, Inc. owns one- third of the supermarket and NCC the remainder, which is "held in trust for the community"; the same ratio applies to the seats on the Board of Directors who oversee store operations and are accountable to both the corporation and the community. Pathmark operates the store under a management contract. NCC is the sole developer and full owner of the adjoining shopping center. The supermarket has made a noticeable difference in the community. There has been a 38 percent reduction in food prices compared to existing neighborhood markets (though prices are still higher than in suburban stores) and a vast improvement in quality and selection of foods. Almost 300 full- and part-time jobs have been created. Local employees are being trained for management-level positions and learn from experienced managers brought in to run the store. Pathmark also sponsors a vocational program in a local high school to prepare youth for employment with the company. The store is one of the few in Newark licensed for the federal Women, Infants, and Children (WIC) program, stocking many items on the WIC list. Since NCC retains two-thirds of the store's profits, they are able to ensure that profits from the store stay within the community. What the partners contributed The partnership provides an excellent example of the benefits of building a community development project around a business core (see box, "Measuring Success"). In this case both Pathmark and NCC had interrelated goals-NCC wanted to increase job opportunities and stimulate economic development; Pathmark wanted to build a store that made a profit. NCC wanted a financially solid, established super- market chain with some experience. Pathmark examined NCC's record of putting together projects of this scale, and conducted their own rigorous feasibility study. They found in NCC a strong record in commercial housing development, a history of accessing capital, and working with city governments, as well as an experienced staff willing to commit to the project. According to John Marquees, director of finance for Pathmark Stores, Inc., the company did "nothing substantially different in evaluating the potential for this partnership than it would in evaluating a for-profit partner." The fact that the partners were well-matched contributed to the project's success. Pathmark Stores, Inc. contributed one-third of the working capital, management expertise to operate a well-merchandised and customer-driven store, and employment and training opportunities for local residents. To complement the management expertise of Pathmark, NCC provided community expertise. Their long-term relationship with the neighborhood and their familiarity with local politics were essential in getting the project under way and accomplished. According to Marquees, "It would have been much tougher to accomplish this on our own. They really put out the welcome mat and eased us into a productive relationship with the community." NCC drummed up community support by conveying a sense of ownership to residents. From the beginning, it has helped attract and screen local workers. NCC was also instrumental in assembling the financing package. Its status as a nonprofit organization made the project eligible for city, state and federal subsidies for which Pathmark alone could not qualify. Perhaps NCC's biggest contribution was the commitment of time and staff to land acquisition. NCC's nonprofit status allowed access to city- owned sites, which would have been difficult for Pathmark to secure on its own. Pathmark's Operations in Newark Pathmark has not had to alter the way it does business to serve an inner-city market. The major differences between this store and a suburban store are the emphasis on security and the marketing mix. Because of high crime rates, security precautions include a camera surveillance system and a fenced-in parking lot equipped with extra outdoor lighting and monitored by NCC security guards. Community resi- dents work hard to maintain a safe and secure environment. As Pathmark was creating the prototype for the store, ' they solicited input from community residents. Because of the input from two community committees, African- American and Latino, the store is merchandised distinctive- ly, with a wider selection of ethnic health and beauty aids, more generic products, more specials at the beginning of the month when government checks are issued, a pharmacy, florist and small appliance center. To ensure customers' continued satisfaction with the store and to acknowledge "community ownership," Pathmark routinely conducts "exit" interviews with customers. Though they do this in all of their stores, it is done more frequently here. Lessons Learned Both NCC and Pathmark believe that their close cooperation has been integral to the store's success. From the beginning, Pathmark has made it a point to interact with the community. Pathmark Stores, Inc. believes that the store's image as a community-oriented business is important to its long- term profitability. Management works hard at community relations and has made a concerted effort to let community residents know that Pathmark is their store and that the profits will ultimately go back into the community. Community Banking and Churches Huntington National Bank Paul Taylor Associates Columbus, Ohio Huntington National Bank began its community-centered banking program as part of its obligation to meet Community Reinvestment Act requirements. After several months, however, they realized the program was not making inroads into targeted inner-city neighbor- hoods. Research showed that many residents distrusted banks and were unfamiliar with the financial services they offered. Others were afraid to approach die banks because of bad credit, late payments of bills, and other past problems. Bank leaders decided the best way to win the trust of the community was to work with them to meet their needs and work through an institution that people did trust-die church. Huntington had been collaborating with Paul Taylor Associates (PTA), a for-profit local community-based consulting group (and the seventh largest minority-owned enterprise in the United States) since 1987, giving them assistance in developing better financial structures for three inner-city churches. The partnership with churches is the backbone of PTA's eight-point community development initiative. PTA uses the reputation the churches have in the community and the institutions they have already established to gain visibility and the trust of residents. Huntington’s program started in 1991 in PTA's home- town of Columbus, Ohio. The bank saw opportunities to do profitable business in the inner cities, but was unsuccessful in finding a structure that was able to take advantage of the market. The church-based Community Banking Program offered an opportunity to penetrate difficult and, to them, relatively "new" markets. The program started as a pilot in three churches and has grown to provide more than 700 mortgage loan commitments totaling more than $25 million in booked loans and $65 million in pre-qualified loan commitments in two cities served by Huntington. PTA's ties to the community helped them isolate the factors keeping residents from utilizing services. According to Paul Taylor, the president, it took some convincing to get Huntington to accept that what was needed to make these services accessible to low- to moderate-income people was "a redesigned product, not a new banking system." Once Huntington realized that inner-city customers were not so different from regular customers, they were able to work with PTA to develop a package of services that would meet the communities' needs. The major features of the community- centered banking program, all of which are specially designed in response to the needs of this market, are:
To "show faith" in potential applicants, Huntington makes front-end commitments of how much will be loaned (up to $57,000), regardless of past credit problems, lack of down payment, or even lack of a house to buy. No one is turned away. When people meet the set objectives, the loan will go through. To help people meet these objectives, Huntington and FITA offer a variety of counseling and other services. The redesigned mortgage product addresses the major hurdles low- to moderate-income homebuyers face: the down payment, past credit problems and high debt-to-income ratios. The special features of the Huntington mortgage are:
According to Walters, PTA has been a "good interpreter" and has provided excellent balance to the partner- ship because of its strong links to the community and its understanding of business. However, the banking program is only part of PTA's total commitment to bring about community ownership and achieve community empowerment. Taylor believes that it is not until you give people the opportunity to "hold a piece of the American dream" that the community will be willing to initiate what needs to be done to turn the community around. Home owner- ship is seen as the first step. The banking project has been so successful that there are plans to implement it in all of Huntington's locations in Ohio, Michigan, Indiana, West Virginia and Kentucky. Additionally, PTA is currently involved in implementing the model with Community Build in South Central Los Angeles as well as in other locations. PTA is active in 11 cities and associated with 75 inner-city churches, in what is considered the "pilot" phase of the project. PTA uses its relationships with the churches and the banks as a springboard for other activities. In Indianapolis, they are working with local banks to encourage hiring through churches. They have also worked through the churches to put on the first Black College Employment Fair which yielded 100 full-time positions. Organizers hope to have 500 positions available at each fair within the next few years. In Columbus, they anticipate starting construction on an ambitious project to build a community health center focusing on substance abuse treatment. The 12,000 square foot facility, funded by PTA and some private sources with the church as the joint venture partner, will be constructed on church-owned land. Because PTA is a for-profit company and puts financing together from private, rather than government, sources, they can move quickly on projects. The health care center has taken less than a year to move from an idea to the first phase of construction. Integrating Social Action Into Business Decission Ben & Jerry's Homemade, Inc. Harlem Ark of Freedom New York, New York Almost since its creation in 1978, Ben & Jerry's a two-part bottom line, seeking to be a successful business and a force for social change at the same time. One of the standard business transactions that Ben & Jerry's has turned into a vehicle for facilitating community development is franchising. Instead of selling the franchise outright, as it does to entrepreneurs, the company partners with nonprofit organizations whose missions benefit from running a small business. For example, Ben & Jerry's is working with the Larkin Street Youth Center in San Francisco to open an ice-cream shop that would provide job training to youth ages 12-17 (mostly runaways). Because most of the youths have unfinished educations, minimal work experience and little self- esteem, the store will help the center provide the critical job skills to facilitate transition into the mainstream work force. The overwhelming demand for social partnerships has led to the creation of a dedicated partnership division of the financing office. Because of the company's general philosophy, it was important to ensure that the partnership process was not treated as a sideline enterprise. The company employs no less rigorous criteria in evaluating its potential nonprofit partners than it does any potential franchisee. Though franchise failure is never desirable, the stakes are often higher in inner cities, where the failure of a venture only serves to perpetuate the legacy of distrust and discouragement. In order to ensure that partnerships are successful, Ben & Jerry's looks not only at standard criteria-location, market, organization's financial health-but also at entrepreneurial spirit (scrappiness, initiative). They also look for organizations that take a holistic approach to solving problems and are working to treat the root causes of social problems and to build capacity in the community. Ben & Jerry's waives its standard $25,000 franchise fee for nonprofit partners and provides training in business practices for the employees and management of the partnerships. In some cases they also make donations of equipment. The formalized partnership structure recognizes both the shop's social goals (providing jobs and creating a leverage point for a broader community agenda) and its business goals (earning a profit and enhancing the business capacities needed to run a successful enterprise). In July 1992, a successful partnership venture opened in Harlem, New York, signaling a hopeful step in the regeneration of what once was an economic and cultural center for the African-American community. The shop was developed by Joseph H. Holland, a graduate of Cornell and Harvard Law School, who has chosen to turn his talents to revitalizing the community where he grew up. His holistic approach to, community development includes providing job opportunities and training and increasing the capacity of local leaders. Holland notes, "Just focusing on economic development for its own sake is not enough. It won't make long-term changes for the community." Ben & Jerry's partnered with Holland's Harlem Ark of Freedom, which operates a homeless shelter in the neighbor- hood. Linking with a community organization was useful to Ben & Jerry's as it provided a way to educate consumers as to the new products the store offered. The partnership provided Harlem Ark the opportunity to give solid work experience to people with few marketable skills. Seventy-five per- cent of the store's profits are put back into the shelter to help cover operating costs and other employee assistance programs. All of the workers are drawn from Harlem Ark. The store has become a leverage point for other economic development in the community. Outlets of other major stores, such as the Body Shop, are opening nearby. Getting Visions Off The Ground J.P. Morgan Community Development Corporation New York, New York J.P. Morgan made its formal entry into the world of community development in 1971, when it formed the first for-profit bank community development corporation. The J.P. Morgan Community Development Corporation (MCDC) (formerly the 23-Six Corporation) was founded by the bank to complement the community development efforts conducted primarily through its Community Relations Department. Morgan established the corporation to create opportunities for communities without sacrificing profit or changing dramatically the way the bank operated. The corporation began with an exclusive focus on the development and financing of low- to moderate-income housing and the financing of small business enterprises. In 1980, the activities of the J.P. Morgan Community Development Corporation were expanded to include making loans to projects designed for community welfare purposes. As the corporation grew, they pulled resources and talent from other parts of the company, including Community Relations, Private Banking and Public Finance, to better position themselves to do more than finance projects. While the company still focused on housing and small business development, they decided that support of other elements vital to a community's growth was also necessary. MCDC assists projects aimed at enhancing services such as day care, medical care, opportunities for employment training and education, and supermarkets with the goal of helping to establish viable communities. Both MCDC and Morgan generally look for programs that create a sense of ownership on the part of the recipient, believing that when someone feels they "own" a part of the effort, there's a much better chance a project will succeed. MCDC operates as any subsidiary of Morgan Bank, concerned about rates of return and risk but with a community- oriented focus. The specialized vehicle for capital formation that MCDC provides has helped finance housing projects, meet the capital needs of nonprofits and foster the development of minority-owned and -managed businesses. Many of the organizations sponsoring these projects had previously been turned down by other lenders. The company focuses its support on communities where Morgan has a banking subsidiary. It does so both to meet Community Reinvestment Act requirements and because it allows Morgan to use its knowledge about the credit needs of the area to make informed project decisions. MCDC and its parent company both employ a strategy of "responsive credit" financial assistance, meaning that the packages offered to each organization are specifically tailored to meet its needs. They helped assemble funding for the Ben & Jerry's outlet in Harlem and for the Pathmark supermarket in Newark, New Jersey, described earlier in this section. MCDC's goal is to generate a competitive return on every investment it makes. Currently, MCDC has targeted certain neighborhoods to try to ensure a mixture of mutually reinforcing business ventures, including women- and minority-owned businesses, a health care center in the Bronx, a youth center in Harlem, a farmer's market in Jamaica, Queens and a number of different ventures related to low-income housing. MCDC has found that nonprofit social service providers with deep roots in a community and a solid reputation for management are good credit risks despite financial positions that might other- wise eliminate them from lending consideration. CORPORATE ASSISTANCE TO COMMUNITIES THROUGH INTERMEDIARY ORGANIZATIONS A third model for community development uses intermediaries to mobilize corporate support. The intermediaries link private sector resources to what are essentially self-help community efforts and provide an effective vehicle for private sector investment in community ownership. The intermediary organization may be a community foundation -as is the case in Cleveland; a specialized institution set up to bridge the distance between businesses and community groups, like the East Bay Funders Collaborative in Oakland; or an independent organization that draws on the financial and other resources of the corporate sector to implement its agenda, like the Local Initiatives Support Corporation (LISC). The factors that make this strategy appealing to business are the same factors that distinguish successful and unsuccessful ventures. Pooling resources for greater impact. Intermediaries offer corporations an opportunity to become involved in projects that would be beyond the scope of what they could do on their own. The intermediaries are then able use the corporate pool to leverage further support and expand community initiatives. For example, LISC is often able to leverage $6 or more for every corporate dollar raised. Many CEOs have been active fundraisers for LISC, mobilizing the business sector in their communities. Especially in larger cities, it is impossible to have impacts of comparable scale individually. Gaining expertise without hiring staff. The intermediary provides specialized expertise in community development that most businesses lack and that is needed to operate a successful program. In this time of cost controls, few corporations can afford to maintain specialized and dedicated community development staff. Working through intermediaries, corporations can have immediate access to specialists; this is especially important when the intermediary is providing technical assistance to community groups. Strong intermediaries are able to supplement the resources and expertise of the company, while focusing on a specific mission. Providing links to the community. Successful intermediaries, no matter what their structure or agenda, maintain strong links to the community. Corporations are often wary of investing directly in community organizations, as they are concerned about their capacity to accomplish goals and their stability. Filtering the money through an intermediary, especially one with an established reputation, is reassuring for corporations that may feel more at ease dealing with "professionals" than with neighborhood activists. Moreover, the intermediaries pro- vide corporate representatives with a structured opportunity to interact with leaders of community organizations if they wish to do so. By working together, they are able to develop a relationship that will survive even if the intermediary disappears. Lessening political visibility. Comprehensive community development is a relatively new and untested strategy. Community organizations do not lend themselves easily to auditing or other forms of quality control. Even standard community development initiatives are relatively risky ventures for corporations, both politically and financially. However, by insulating themselves from direct contact with community groups, corporations can distance themselves from political exposure if a project fails. Even in well-designed community programs, there will be failures. Once a corporation has secured its role as a long-term partner in community development, it can view failures as learning experiences. At the outset, however, a conspicuous failure can be devastating. One caveat to this structure: while intermediaries can build strong bridges within communities, they can also destroy them. In communities where there is a strong community structure in place, established groups may see a new intermediary as a barrier to direct corporate support. This situation is especially true when a new intermediary is superimposed on existing community organizations and community development corporations. The intermediary in this case is likely to be viewed as yet another layer of bureaucracy to wade through to access corporate funding. (For a discussion of an intermediary organization in the United Kingdom, see box on p. 34.) Business-Government-Community Partnership Through An Intermediary The Cleveland Community-Building Initiative Cleveland, Ohio Over the last decade and a half, Cleveland has made great strides toward diversifying its economy, restoring the fiscal stability of city government and redeveloping its downtown area. However, community leaders recognized that few of the benefits from revitalization were reaching the city's lowest income neighborhoods. In January 1990, the Cleveland Foundation, the nation's oldest community foundation, convened a Commission on Poverty specifically charged with putting together a long-term comprehensive strategy that would use business, government and community organizations to connect the city's poor neighbor- hoods to mainstream opportunity. Business leaders teamed up with grassroots activists, educational and religious leaders, representatives from city and county government, academics, and practitioners to form one of the most comprehensive three-party partnerships (business, government, and community) in the country. Two and a half years of analysis of the exact characteristics of Cleveland's poverty concentration and of the assets that different communities could build on were carried out before a strategy was adopted. The inclusion of high-level business leaders in the process was considered essential. The Commission realized that not only did the corporate leaders of Cleveland have a tremendous stake in the future of the city, but they also were in a position to generate at least some of the economic reinvestment necessary to improve conditions in the inner city. Almost all the executives on the Commission represented Cleveland-based companies, including The Higbee Company, White Consolidated Industries, RPM, Inc., Reliance Electric, and several law firms. According to the Commission's Assistant Director Angela K. Lowder, the involvement of the business community "stemmed partly from altruism and partly from self-interest." The corporate interest in revitalization was initially stirred by a desire to upgrade the quality of the work- force. The focus expanded gradually as business leaders discovered that substantive, long-term change had to include other activities besides school reform, like improving housing and social services, creating jobs and new businesses, and changing the "intangibles." According to Lowder, it was in part the past experience with community development, by both the corporations and the individuals involved, that allowed this group to really "push the envelope" and assume the risk of developing and implementing a plan that attacked the problems of poverty in a new way. The Commission called on local corporations and businesses of all sizes to see themselves as stakeholders with an interest in the fate of these neighborhoods, working hand-in-hand with local residents to match up their employment needs with those of the business community. Implementation in the Villages The Commission decided against trying to attack poverty through social welfare reform because it believed top-down solutions do not work in the long-run; ways need to be found to nurture and strengthen a neighborhood's indigenous resources. This commitment to develop and support neighborhood resources is the cornerstone of the Cleveland Initiative. The initiative is built around the idea that neighborhood revitalization will result in enduring change only if the architects and builders of that change are the residents themselves. While the Commission in its intermediary role has made recommendations about the kinds of activities that should occur and the types of outcomes that should result, they have been careful to leave priority-setting to the community councils currently being formed in the four neighborhoods initially targeted as demonstration "villages." The plan divides community needs into four interrelated areas: investment, education, family development and health. It calls for the creation of new programs and the expansion of existing ones to provide additional services and to take advantage of each neighborhood's strengths. One of these strengths is an abundance of community support starting with neighborhood churches and church-sponsored social groups and running through athletic leagues, tenant organizations in public housing, and settlement houses that have been in the community for almost a century. The Initiative will unfold in two phases over the next five years. The Commission has already created a Community-Building Initiative Council, which includes business leaders and other community stakeholders, to assist each village in establishing an operating base and developing an operating plan. Local plans will be implemented and evaluated in the second phase. Arriving at a strategy for revitalization in Cleveland was admittedly difficult, requiring compromise on all sides. Corporate representatives had to resist the temptation to "plan, decide, and do." Much of the Commission's work was to find balance-between the members' viewpoints, their expectations, and the organizational processes to which they were accustomed. According to Commission Director Dr. Arthur J. Naperstack, it wasn't that people came to the table with different goals, it was that they came with different perspectives of how they viewed problems and how they would solve them. Out of the process came a common vision of procedure and objectives. For corporations, it meant learning that the problems stemming from persistent poverty would not be solved by creating jobs and building houses alone, that a reweaving of the community's social fabric was also needed. The linkages that have been created between the corporate and community sectors were important to the planning process and will continue to be important as implementation proceeds. Corporate representatives will figure importantly on the Community-Building Initiative Council (CBIC) created by the Commission to oversee implementation. The business representatives on the Commission have expressed a strong desire to increase direct contact with community groups as the villages develop their leadership structure and formulate their plans for action. In the implementation phase, the business sector will be called on to demonstrate its financial faith in the plan. Though government resources will be tapped for many projects, initial financial support from the local business community is crucial. Business is also counted upon to press for tangible, timely "outputs." The careful advance preparation that went into the Cleveland Community-Building Initiative is one of its strengths. However, like any other plan it will ultimately be judged by the results. Partnering With Other Local Intermediaries There are really two intermediating organization in the Cleveland model. One is the Cleveland Foundation itself, which receives funds from the local business sector and identifies long-term priorities for the use of these funds. Many other local foundations, like the New York Community Trust, East Bay Funders Collaborative (Oakland and San Francisco), Enterprise Foundation (Baltimore) and the Chicago Community Trust, have take on similar leader- ship roles in linking corporations to the inner city by helping launch new programs for community-building. At the level of strategic design, the Commission on Poverty and its successor, the Community-Building Initiative Council, also have served as intermediaries. They had linked community activists and business leaders by providing a neutral structure where neither side is at "home" to the exclusion of the others. Even the language describing anti- poverty proposals have resulted from three-way negotiations among government, business and community groups. Once they become familiar with each other and more trusting, communities and businesses may choose to do more direct collaboration. The city-wide intermediary structure is important in fostering these connections and will be avail- able as a safety-net to help prevent misunderstandings among partners from escalating into breakdowns. Specialized National Intermediary The Local Initiatives Support Corporation (LISC) United States Community development is an inherently elusive and hard-to-measure concept. Many corporations drawn to the field want the assurance that they will be investing in programs that work-programs for which a positive and tangible outcome is virtually assured. One of the most successful of these types of organizations, both in terms of money raising and housing production, is the Local Initiatives Support Corporation (LISC), the nation's largest community development intermediary. Operating in 30 cities and regions across the United States, LISC provides support to nonprofit community development corporations (CDCS) seeking to rebuild their distressed communities. LISC was created by the Ford Foundation and six other corporations in 1979 and has primarily focused its efforts on physical redevelopment of the inner cities. It has raised more than $800 million and has helped 875 CDCs build 42,000 units of housing and 7.7 million square feet of retail space. As its resources and expertise have grown over the past 15 years, LISC has gradually expanded its focus to undertake initiatives that address the wide range of problems troubling urban communities. In developing a more comprehensive agenda for community revitalization, LISC has broadened its scope of technical assistance and launched several national initiatives-the Retail Initiative, the National Equity Fund, and the Community-Building Initiative-which supplement the array of initiatives undertaken by local LISC offices. Corporate activism is the cornerstone of LISC; participation and commitment from the business sector must be present before LISC will begin operations in a designated area. Typically, the private sector, a local corporation or foundation, identifies the need for revitalization in an area and "invites" LISC into the city. For the most part LISC does not seek out new program areas, but rather waits for the private sector requests. Once invited to a city, LISC draws on its resources to assess the feasibility of setting up a program, gauging levels of interest and resources that exist in the community. Within the LISC structure, corporations are given the opportunity to contribute what they are best able-money, business advice and influence. LISC's expertise in community development assures companies that money will be productively spent. Pooling of capital allows more to be accomplished than any one company could achieve on its own. From the first money for seed capital to last money to complete financing, LISC provides the funds, professional services and "stamp of approval" that other funders look for. Linking private sector resources to what is essentially a self-help effort, LISC has established a highly effective vehicle for private sector investment in community development. Local business executives can avail themselves of LISC's expertise in housing development while contributing their own expertise and influence as members of LISC's local advisory boards. Low- to moderate-income housing development is one of the areas where corporate activism and investment have made a visible difference in many communities. LISC is now looking to expand its role as intermediary to better address the full range of elements essential to neighborhood revitalization. National Equity Fund The National Equity Fund (NEF), a subsidiary of LISC, was established in 1987 as a vehicle to pass federal low- income housing tax credits through to corporate investors. Corporations get their return by claiming federal tax credits over the next 10 years. NEF, along with its two partners, the California and New York Equity Funds, has become the nation's largest nonprofit syndicator of low-income housing. NEF acts as a financing partner to local community development organizations. The Fund raised more than $224 million in corporate investments in 1992, and continues to demonstrate that affordable housing development is both a sound investment and an effective social tool for revitalizing distressed neighborhoods. Currently, the Fund operates in 38 cities across the country. Community-Building Initiative As more and more neighborhood-based programs have sought to pursue comprehensive development strategies, LISC began the Community-Building Initiative (CBI) in 1992. The moneys raised through CBI will be directed toward community development corporation's non-housing ventures, supporting the belief that safe, viable neighborhoods require more than affordable housing. Designed as a three-year demonstration project, CEI will support CDCs in their roles as mediating institutions in their communities-organizing residents to identify priorities and set local agendas and working in collaboration with public and private agencies to address neighbor- hood problems and respond to opportunities. Priorities may include combating crime and substance abuse, developing literacy or mentoring programs, nurturing new businesses, or improving availability of child and health care. The Retail Initiative LISC's latest initiative is about to be launched with a $15 million pool of funds (a pool which organizers hope to expand to between $50 and $75 million), replicating the capital pooling strategy LISC has long employed with its housing redevelopment projects. The Retail Initiative is a national commercial equity fund, designed to support the efforts of nonprofit community development corporations to develop neighborhood retail centers, anchored by large, chain-operated supermarkets. The retail projects will be located in low-income urban communities across the country. The major objectives of the Initiative are to: (1) improve resident access to quality products and competitively priced retail goods and services; (2) enhance the physical development of neighborhoods through construction of new and/or rehabilitated retail facilities; (3) maximize employment opportunities for local residents; and (4) provide financial benefits to CDCs through development participation and eventual full ownership of the retail centers. An early predecessor to The Retail Initiative was LISC's involvement in the Marshall Heights Community Development Organization in the District of Columbia. Local leaders were convinced that the blighted shopping center in the community offered an important opportunity to bring jobs and services to the neighborhood-but they were unable to convince potential funders of the project's viability. They approached LISC, which funded the appraisal, then helped assemble a development team, and finally arranged over $3 million in bank, city, and equity financing. The shopping center now provides more than 300 neighborhood jobs and anchors the neighborhood redevelopment strategy. Campaign for Communities Begun by LISC in 1991, the Campaign is an investment in neighborhoods and in the people who work to rebuild them and represents an effort to increase the awareness of community-based development and reinforce community values. The Campaign encourages corporations and foundations to make community development a philanthropic and social priority and aims to build consensus among opinion leaders in business and government that community development should be an integral part of everyone's agenda. The five-year Campaign seeks to raise $90 million in grants and $1 10 million in program-related investments and low-interest loans. It is expected that almost 50 percent of the money will come from corporations. The money will be used to introduce community-based development strategies into areas of the country where they are not yet prevalent (especially in the Sunbelt); develop the capacity of existing CDCS; create and expand financial mechanisms and programs that address community needs in innovative ways; and help create a permanent capital fund that will be leveraged to raise additional resources over the long term. The dollars will be applied to both local and national initiatives. The project's steering committee includes the CEOs of NYNEX, MetLife, Hallmark, Payless Cashways, and Knight-Ridder, Inc. Rebuilding An Inner City Through Job Creation: A Troubled Initiative RLA (formerly Rebuild LA.) Los Angeles, California RLA (formerly Rebuild LA.) was created three days after the Los Angeles riots in 1992. Then-mayor Tom Peter Ueberroth to head the city's primary rebuilding effort. Within a week, Ueberroth set up the nonprofit RLA to mobilize corporate support to attract jobs and economic hope to the troubled neighborhoods affected by the civil unrest. Money from corporate, governmental and other private sources was quickly raised to staff the organization and sustain it through the five-year strategy that was being formulated. According to Ueberroth, the primary goal of the project is to "bring the private sector into every part of the inner city and into every part of the equation." Ueberroth's statement is indicative of one of RLA's major problems-plenty of private sector interest, but no community involvement. RLA was the business community's response to a crisis. However, it was never rooted in a long-term commitment to the community, the hallmark of other successful private-sector initiatives. RLA was originally conceived as a big-business job creation strategy. Its objective was to attract major corporations to create 57,000 jobs in neglected neighborhoods by reducing the government red tape, which was seen as the primary constraint to private investment in the inner city. However, as the only large-scale revitalization effort in Los Angeles, there was much pressure on RLA to address other issues including racial tension, rebuilding of burned-out small businesses, and a pending teachers' strike. When little was accomplished on any of these fronts, the initial skepticism of many residents was reinforced. Those who had put stock in RLA were disappointed. In the two years since its creation, RLA has faced a number of organizational barriers and challenges to its credibility. The "top-down" corporate strategy had success attracting the business sector, but failed to filter most of the suggested initiatives through the constituencies of the effected areas. The initial failure to acknowledge established community leaders and organizations as equal partners hampered the project's progress. RLA then backtracked to accommodate local leaders and diverse community interests, eventually creating a 96-member Board. At times, RLA's management also appeared cumbersome and expensive. In its first 18 months, RLA itself collected $8.6 million in revenue, primarily through private donations from corporate contributors, in addition to the commitments made by corporations for specific projects. In the first year of operation, RLA spent $3.5 million, of which only 17 per- cent went to programs services. Close to 70 percent went to personnel and administrative costs. By 1993, RLA's figures showed that more than 200 corporations had pledged more than $500 million in aid. How much of this aid represents new commitments, and how much will eventually be translated into actual investments and projects is a matter of dispute. The pledges are largely in the form of donated equipment, buildings, and services, and support for educational and job training programs. However important these activities may be in the long run, they do not create the immediate private-sector jobs that the public was led to expect. In the wake of criticism, Ueberroth resigned his leadership post in May 1993, a year after the project began. Within months RLA found itself struggling to reorganize, refocus and become "relevant." It has streamlined its rebuilding strategy and shifted its focus from attracting major corporations to the inner city to stimulating the development of small businesses by establishing loan and equity investment funds. What RLA Has Accomplished Despite its problems, RLA has made contributions to the revitalization of Los Angeles' distressed neighborhoods and accumulated experience from which the corporate sector can learn. RLA has now streamlined its activities to focus on six core goals, two of which are discussed here:
The RLA Community Lending Corporation was established as a nonprofit corporation that makes loans to new and existing small businesses. This expansion loan fund supplements existing bank and governmental loan programs and focuses on business people previously deemed poor risks. Once established as a Small Business Investment Company, the Greater LA Fund will be able to make equity investments of up to $1 million in small businesses that create jobs in the inner city. RLA is also working to strengthen minority-owned financial institutions. Founders National Bank, the only African- American owned bank in California, failed as a savings and loan but was reorganized as a commercial bank in 1991. ARCO, Bank of America, and other corporate investors made $3 million of equity investments in the bank, which will enable it to make more than $75 million in new home and small business loans. The investment provided Founders with the capital to complete the purchase of two of Bank of America's inner city branches. In the same vein, the Walt Disney Corporation committed $1 million to the First A.M.E. Church, one of the city's largest African-American churches, to establish a micro loan/entrepreneurial training program for small business owners. Bank of America has established a Small Business Investment Program which now serves as a model for the interaction of private institutions with community-based minority institutions. Developing a skilled workforce. Improving the skills of the work force is also a priority for RLA. Although corporations have been slow to create jobs, many have set up vocational programs to train local residents in everything from automotive repair to meter reading and small business management. Many of these programs also include life skills programs. Toyota Motor Sales, in collaboration with the Los Angeles Urban League, has opened a vocational automotive training center. Southern California Edison donated office space to create the Regional Job Training Center at Compton (RJTCC) for displaced and underskilled workers. The company spent nearly $2.5 million to refurbish the facility and has committed $400,000 a year to its operation for the next five years. RJTCC has established cooperative training and job placement agreements with businesses in the area. The businesses use the facility for training workers and upon successful completion of the programs graduates are given jobs with the companies. After its meter reading program, SoCal Edison (Southern California Edison) placed 31 people in new jobs. As of this writing, the future of RLA is in doubt. The newly elected mayor, Richard Riordan, dismissed RLA's four co-chairs without naming replacements. Some predict that the project will simply fade away. The lessons from the first year of RLA have been hard, but useful. RLA has effectively demonstrated that top-down strategies will not work unless firmly connected, at the outset, with the community. The Atlanta Project has mobilized corporate support for the distressed areas of Atlanta in an even more comprehensive way than RLA, but coupled that involvement with an equally strong grassroots mobilization. In order to be effective, intermediaries must be connected at both the corporate and community levels, with each group having an equal stake in the relationship. In addition, a clearly defined agenda helps the intermediary navigate the gap between the pace and complexity of revitalization and the objectives of the business sector. PLANNING AND EVALUATION OF COMMUNITY PROJECTS Corporate and community expectations about development strategies often collide. One of the most frequent collision points is planning and evaluation. In the private sector, strategic plans are often viewed as the essential first step of an activity to ensure organizational effectiveness and to accomplish prescribed goals. This is not always so in the public sector, especially in community development. Plans tend to be far less strategic in design-they either list individual projects to be undertaken or identify ambitious but hard-to-measure goals. Outcome monitoring often is resisted. In some ways, the scant attention given to long-term planning results from the lack of "value" community groups give to plans. Almost all inner-city neighborhoods feel that past plans rarely have been followed through. They therefore prefer immediate results to longer-term strategies. Skepticism is often reflected in low rates of resident participation in community planning. The irony of the situation is that a good strategic plan would lay out the process for increasing community involvement and capacities. Therein lies the dilemma: a plan is necessary to effectively generate support, but creating a truly "bottom-up" plan requires the support of the community. The Atlanta Project Experience The Atlanta Project provides some instructive examples of attempts at community strategic planning. TAP essentially has two strategic plans, both of which will be subject to evaluation over the course of the next five years. The first strategic plan is that of TAP itself Created by the project's organizational leadership, it delineates broad goals and strategies, such as enhancing quality of life, uniting Atlanta, and em- powering cluster communities, rather than specific accomplishments or modes of action. This plan was drawn up as TAP came into being, and is currently being revised to in- corporate lessons learned in the first 18 months of the project. The second strategic plan is actually 20 separate plans, one formulated by each of the clusters. Communities' formulation of their own strategic plans is one of the primary strategies employed by TAP to empower people to make decisions about priorities. Both TAP and the corporate partners initially assumed that the Clusters would generate strategic plans within the first year. Many of the corporations conducted leadership training and strategic planning workshops for the cluster steering committees with the expectation that it would help them develop the skills necessary to formulate the plans. Currently, the clusters are in various stages of the strategic planning process. To date, one-third have plans (some of them only after a great deal of pushing by the corporate partners). As to the participatory process that went into the plans that have been produced, it is difficult to say whether they were truly produced through an interactive process with a wide range of community representatives (the TAP ideal) or by the cluster coordinator and a few active volunteers. In its efforts to facilitate the planning process and rethink its own expectations, TAP is evaluating the strategic planning process. TAP evaluators are asking cluster coordinators and corporate partners about their views of the process-"How important do you consider it to be?," "Who should be involved?," and "When should it be undertaken?"-to teach others how community planning is best undertaken. The surveys have found that all parties believe that the best strategic plans originate in the communities and most believe that having a strategic plan is essential, but there is little consensus about the rest. According to Michael Giles, senior advisor for evaluation, views of strategic planning fall along a continuum: At one end of the continuum there is the idea that you must have a strategic plan before beginning any activities so that they are directed toward a purpose. At the other end is the idea that an effective strategic plan should be done after other activities have been undertaken to stimulate community activity, elicit community priorities, and produce tangible results. Once the community accepts the idea of the project, they will be able to work to generate a plan of action. Not surprisingly, most of the corporate partners fall at 1; most of the cluster coordinators fall somewhere around 6 or 7 (i.e., they realize the importance of planning, but believe that to create a viable, community plan you must involve the community, a process that takes time). This gap is frustrating and requires compromise. Unfortunately, compromise is difficult as there is little information about the type of planning that works in practice. One corporate partner noted that it was one of the project's primary challenges faced by both TAP and the individual clusters. The challenge points to a major difference between corporations and communities. In a corporation, employees "buy-in" when they are hired, assuming the goals of the company as their own and creating plans to achieve them. Communities, on the other hand, rarely have a single mission or point-of-view around which to coalesce. What the Plans Contain Generally, the strategic plans formulated by the communities expand on the general goals of TAP, providing an analysis of the cluster's current situation, objectives and strategies for reaching those objectives. Few of these "first- cuts" contain the kind of substantive outline of processes, activities and priorities expected in a comprehensive strategic plan. The plans begin with the mission statement that the cluster has adopted. The Brown Cluster's mission statement is typical:
Evaluation Evaluations of community programs have not received the attention that many think they deserve. The difficulty of measuring such abstract concepts as "improved community spirit" and "increased leadership potential," coupled with the fact that many grassroots organizations do not have access to measurement tools, has made comprehensive evaluation infrequent. However, this trend is slowly changing, partly as a result of increased corporate involvement in distressed communities. As corporations move away from pure philanthropic donations and look at their contributions as investments, they are demanding to see some return on that investment and have increased the demand for measurement of outcomes. The Atlanta Project is one of the few projects that has integrated a complete evaluation and measurement component into its design. Several different evaluations are currently underway, including assessments of specific initiatives and strategies, the first round of in-depth interviews with cluster coordinators, and a survey of the corporate partners. Because the project draws support from many sectors, it will evaluate and report progress toward its goals to both internal (administration, cluster) and external (foundations, corporations, policymakers) audiences. TAP has undertaken both constant, short-term monitoring, especially in develop- mental stages of processes (so that there can be continuous refinement and revision of strategies), and longer-term monitoring of changes in behavior and basic social/political structures that may take many years to occur. The architects of the evaluation plan understand that long-term changes of this magnitude are slow to develop. They concede that even after the five-year time frame they have established, results may not be readily apparent. TAP plans to measure progress toward the goals set forth in its strategic plan and other "founding documents" by comparing conditions at the end of five years against baseline data (e.g., on poverty rates, housing, educational achievement, community perceptions) collected at the start of the project. Because some of the measurements identified by TAP are not quantifiable in the traditional sense, the data collected will be both quantitative and qualitative. To get at the different levels of the project's potential impact, the evaluation strategy divides activities into three categories: process, outcome and impact. "Process" refers to strategies undertaken by TAP to support its goals and how well these strategies have been implemented. "Outcome," refers to the products of the activities of TAP such as changes in attitudes and actual conditions in neighborhoods. "Impact" refers to the indirect effects of TAP which reach beyond specific project activities. The severest test of any community program, impact determines whether it has had a catalytic effect that improves overall living conditions. To determine baselines, TAP will undertake surveys to gauge individual attitudes, perceptions and behaviors. The surveys began with in-depth interviews of cluster coordinators and corporate partners, and exit surveys of volunteers. As the project progresses, the evaluators will fan out and talk to others directly involved in cluster activities as well as residents. To establish a benchmark for readiness for empowerment, for example, ethnographic surveys will be used to gauge the level of subjective identification with communities, strength of existing leadership/organizations, patterns of leadership and problem-solving, vitality of social life, etc. The first round of cluster surveys, focused on the cluster coordinators, is complete. Selected clusters will be involved in a 1994 follow-up; all 20 clusters will be resurveyed in 1995-1996. This will allow an assessment during the first year of implementation and an assessment of the impact of TAP on community life in the fourth year of field operation. TAP will also collect and analyze secondary data including statistics on health, social, economic, crime and educational conditions in the clusters. The information will help the clusters identify/prioritize problems and facilitate the empowerment process. General surveys of cluster residents have already begun through the Gallup organization's annual quality-of-life Survey, which they did pro bono through a 500-person oversample in the cluster areas. Preliminary results indicate that residents of TAP clusters responded more positively when asked questions like, "Are you optimistic about your future possibility for a better life?" Gallup has agreed to follow up the survey every year, adding questions that specifically address TAP. It will also conduct focus groups with cluster residents. So far, none of the clusters has formal evaluation processes in place, but all plan to have them and have integrated at least the desire for evaluations into their thinking about the elements of a strategic plan (see box, "TAP Evaluation," on p. 43). Clusters, and communities involved in revitalization generally, often acknowledge that baselines should be established and progress should be measured, but are at a loss as to how to do it. To date, in most clusters, measurement has been used only to track participation in community events or planning activities. The problems associated with measurement and evaluation are among the principal constraints limiting corporate involvement in community-building projects. Until "success" can be defined and monitored more precisely, corporations have little basis for deciding whether they should continue, expand or terminate a particular community partner- ship or development strategy. Corporations are naturally reluctant to commit resources to activities where effective- ness cannot be measured. For this reason, advances in conceptualizing and applying practical evaluation techniques are critical to enlarging the corporate role. |
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