Organizing For Neighborhood Development

A Handbook for Citizen Groups

March 1985

Table of Contents


This guidebook was prepared by Robert Kolodny in collaboration with the staff of the Center for Community Change. D. Kolodny has had two decades of experience in community development and housing issues as a practitioner, teacher, analyst and writer. He is the author of "Self-Help in the Inner City" and numerous reports and articles.

The Center for Community Change is grateful to U.S. West and the Piton Foundation for underwriting the cost of publishing this guidebook. The Center also wishes to thank Jane Prancan of U.S. West and Judy Kaufmann of the Piton Foundation for their personal assistance and encouragement, which helped bring this project to fruition.


This handbook addresses a set of questions that low income community organizations have been struggling with for over a decade:

  • Can we combine "organizing" and "development?" That is, can we organize our community to take strong often controversial stands on issues. while simultaneously taking on operating responsibility for housing and economic development programs?
  • If both "organizing" and "development" are essential, what is the proper balance between them, and how do we achieve it?
  • If we see too much conflict between these roles and decide they cannot be handled by the same organization, how do we make sure that all of these varied activities occur?

There are no single correct answers to these questions, although there are strong views on each side of the issues they pose. Organizations arrive at different solutions depending on their own goals. styles and capacities and the environment in which they must operate. But even though there is no single formula. community groups can learn a great deal from the ways other groups have faced such questions.

The Purposes of this Handbook

This handbook outlines ways in which organizations can embrace community development and community revitalization without weakening their ability to be strong advocates for their neighborhoods. It reviews the problems which emerge when issue-oriented neighborhood organizations try also to become developers, and it describes how citizen groups in different parts of the country have handled these problems and dealt with the process of taking on a new kind of work.

This handbook is principally addressed to community groups whose primary approach to community problems has been organizing residents to influence decisions that affect their neighborhoods by demonstrating their concern and power, but which are now considering the possibility of assuming a direct role in developing housing, businesses or jobs.

Many others are interested or active in locally based development activity, but they are not confronted to the same degree with the problems of balance and compatibility of a shift from one style of dealing with the outside world to another. These others may find this guide relevant. but they are not its principal audience. These other actors include:

  1. community, neighborhood and local development corporations primarily designed to engage in development activity;

  2. organizations which originally addressed neighborhood issues, but which, over time, have been transformed into organizations almost entirely involved in development;

  3. nonprofit organizations without a membership base which carry out development projects alone or in partnership with community organizations and

  4. professionals, businesspeople, funders and public officials who work with such, groups.

What's New About Neighborhood Development

Twenty years ago, the development of housing and the creation of business enterprises were seen as the domain of the private sector. The public, mainly local government, was seen as responsible for community facilities, the infrastructure of streets, parks, water and sewer systems, public services and some housing for the poor. Community based citizens organizations were not viewed as having much of a role in the development process.

Beginning in the mid-1960s, with the Ford Foundation's encouragement of Community Development Corporations and the advent of the Model Cities and Anti-Poverty Programs, community based groups began to get into real estate ownership and improvement. At first their efforts were modest. The limited outside financial support and encouragement came mostly in response to the withdrawal of private and public sector investment from inner-city neighborhoods and to demands for aid from citizen groups which were looking to fill the gap.

Development activity has now become a familiar part of the movement for neighborhood empowerment and revitalization. Some see this as part of a natural evolutionary process "from protest to program," from organizing and service delivery to what they consider a more advanced form of citizen action.

In addition to struggling against skepticism and outright opposition from many in the public and private sectors, however, community controlled development has faced doubts within the neighborhood movement. Some community organizers and activists have warned that development diverts citizen organizations from their main function of organizing people to fight for the interests of the neighborhood, compromises their goals and causes them to shy away from controversial struggles. This concern has been echoed by many local groups that are primarily devoted to development and fear that they would jeopardize their access to needed resources if they criticized the policies of government agencies or the private sector.

It is by now clear that moving from organizing into development is neither without pitfalls and dangers nor a simple process. It can require significant changes in organizational structure, staff composition, decision-making processes and the institutions and groups which must be considered as partners. But it is equally dear that community groups have developed a whole series of approaches to the tension between organizing and development -- including approaches which balance and reconcile the approaches in a single organization -- which should be understood by others who are struggling to achieve progress on both fronts.

Why Development Is "Different"

Taking on direct responsibility for operating housing or economic development programs is different from other strategies for neighborhood improvement. Unlike community organizing or social service delivery, development activity -- which typically involves the creation or renewal of buildings and/or business enterprises -- usually requires major capital resources. These resources are well beyond the level of support which local organizations can normally generate from membership dues, payment for services, philanthropic contributions or contracts with public agencies. Development thus requires a substantial amount of borrowing, a factor which places new demands on an organization to demonstrate its technical competence and reliability -- often a difficult challenge for action-oriented groups that may have been labeled confrontationist and "irresponsible."

Development activity also normally requires more technical staff capacity than most issue-oriented community organizations have. This, and a development project's financial requirements, generally make a group engaged in development more dependent on outside resources and on collaboration with others.

Finally, development is typically a complex and time consuming undertaking, involving the coordination of many elements over a lengthy time period. It is particularly difficult in poor and declining neighborhoods and has resulted in a fairly high failure rate, even among experienced community groups and professional private and public sector developers. And projects often take many years to come to fruition, risking the dwindling of community interest and support.

Why Get Into Development?

There are three particularly strong reasons citizen groups want to take a more direct role in development activity. First, they may have found that no one else will take the lead in starting development projects. Groups working in declining market environments, where there is little new investment and increasing deterioration, may find that simply organizing for veto power is insufficient. Like it or not, many groups judge that unless they get into development themselves, no revitalization is likely to occur.

The second reason is to insure that revitalization meets the community's needs and is of maximum benefit. Community groups complain of struggling to get a housing rehabilitation program introduced into an area, only to be disappointed by the results. Organizations conclude that they have put so much effort into influencing and monitoring the development activities of others that they might as well expend the additional effort needed to do it themselves -- and get more credit, experience, profits and jobs. This leads to the decision, "Next time let's do it ourselves."

A staff member of the Northwest Bronx Community Clergy Coalition says that simply adopting a brokering role between public resources and private actors has limitations. Why help negotiate a rehabilitation loan or a new insurance package, he asks, for a landlord whom everyone regards as unreliable? Dissatisfaction with the results of acting solely as an intermediary pushed groups in the Bronx into establishing BUILD, their own vehicle for acquiring and managing multifamily properties.

To be sure, it is often less risky and taxing to pressure others to develop housing or business in the community. This is particularly true when there is a neighborhood or citywide entity that can do "sensitive" development, respecting the needs and desires of existing residents, even though it has no formal link with a democratically organized membership group. (Brothers Redevelopment in Denver and the Settlement Housing Fund in New York are examples.) However, a strict advocacy approach may not allow the community to meet some of its other goals and it usually provides a weaker defense against displacement. The threat of gentrification is a major reason groups feel compelled to do their own development in declining neighborhood housing markets which are turning around.

In minority communities, particularly, employment for residents, entrepreneurial and management opportunities, ownership and the building of new minority-controlled institutions are frequently primary motivations for taking on direct development responsibilities. Simply influencing the activities of what are largely white institutions is not enough. So a third reason that community organizations engage in development is to build indigenous know-how and locally owned housing and businesses.

Experience to date suggests that the expectation of earning sufficient income to gain long-term financial self-sufficiency is, however, not a realistic goal for development activity. While there are groups which have used development activity to generate a portion of the resources they need, the record in this area has disappointed those who hoped for sure payoffs or full self-sufficiency. By and large, both community organizations and development operations continue to be dependent upon monies raised from membership, philanthropic support and public grants and contracts.

Why Neighborhood Developers Should Be Concerned With Organizing

"Organizing" often creates the opportunities and resources that permit community organizations to play a significant role in "development." Showing massive community support often adds greatly to an organization's influence and may do more to attract major government or private support for a project than the organization's technical skills or good proposals. Furthermore, it is the extent to which local groups represent a constituency that gives them the right to speak for neighborhood interests and to press for cooperation and support.

In the long run, the resources for development will come only to those who can lay effective claim to them. Such a claim can grow from a successful track record, but in all likelihood it will also depend on power and evidence that an organization represents a concerned and active constituency. However, because neighborhood groups that have never engaged in ambitious development undertakings or handled the large sums of money involved often attribute a great deal of glamour to these activities, they can easily forget that many of the current opportunities for neighborhood based development were created by hard organizing -- and will continue to depend upon the community group's influence and power.

The importance of organizing around issues was illustrated by many groups visited in the course of preparing this guide. Some identified the Home Mortgage Disclosure Act and the Community Reinvestment Act, along with the general fight against redlining by financial institutions and insurance companies, as central to the development of their groups and their current programs. Similarly, many local development groups credited the activity of neighborhood coalitions, which have monitored and demanded their fair share of Community Development Block Grants, with their success in getting CDBG funds for community housing and economic development projects. In San Francisco, for example, the Council of Community Housing Organizations has successfully pressed for an expansion in CDBG spending for community-controlled projects from $500,000 to over $7,000,000.

It seems reasonable to assume that the capacity to organize and to represent constituent interests in lower income and minority neighborhoods is critical to creating continuing opportunities for community-controlled development. The view of many in the field is that neighborhood based development will ultimately falter unless backed by strong membership coalitions oriented to community education and mobilization.

It may help neighborhood organizations which are nervous about using such an approach to remember that developers in the private sector also use advocacy and pressure to advance their interests. Their tactics may be less obvious, because they coincide with conventional patterns and expectations of how to go about influencing others, but they are nonetheless tough. Of course, as community groups become more established and powerful in the development arena, they may adopt the tactics of those with established access and influence. They may find that it is advantageous to avoid direct displays of power (e.g., mobilizing large numbers of constituents for a street demonstration), since constant tests of strength can sometimes wear down an organization and may actually demonstrate weaknesses. The essential point is that interest advocacy is legitimate and is taken for granted by more seasoned participants in development activity.

It also may help groups to remember that the strategies which work in one political environment may not work in another. In some situations an advocacy stance will help a group gain resources; in others, it may lead to retaliation and a breaking off of support.

There is no single right way to control or influence development. Taking a direct, entrepreneurial role in operating a development program is one popular, often successful way, but it is not the only route. A community's initial question should be: "How can we help shape the development and redevelopment process in our neighborhood?" -- not: "How do we become a Community Development Corporation?" Citizen groups should ask if the pace of improvements in their area is adequate. Then they must decide if what is occurring is accountable to the community. When the answer to either question is "no," the key question becomes what kind of role the group can most effectively play to encourage and control development.

The Inevitability of Change

Two central issues appear to be the most worrisome to community organizations when they contemplate or plan development activity. first is how to keep the development activity accountable to neighborhood interests. The second is how to insulate the community organizing from pressure to pull its punches, while also avoiding undermining relationships which the development arm has cultivated to further its projects.

As some case histories will show, certain ways of dealing with these issues are more effective than others. There is, however, no way to avoid change if a group is to mature and grow. Like other human organizations, community groups reach a point where things no longer work as well as they used to, where new or different kinds of people need to be involved where people already involved need to become involved in different ways, where an old organization may need to be changed or dissolved or a new one created. Continual re-examination and restructuring is the iron law of life for all organizations, including democratic, grassroots community organizations. And many of the issues that arise when a group contemplates moving into development are prompted by normal organizational growing pains -- they reflect problems that the group has to face anyway, rather than a new set of dilemmas brought on by "development."

Choosing A Structure For Development

Creating an appropriate organizational form is probably the most debated part of "getting into development." Based on a review of the structures that have been created across the country, it is possible to outline six basic approaches:

  1. Development Spin-off. The creation of an entirely separate development corporation with its own board and staff, fully independent of the community organization. The only formal relationship is historical, one being the forerunner of the other.

  2. Linked Autonomy. The development of two parallel organizations which are formally autonomous but which have some degree of interlocking board membership. In this case, the development organization is spun off, but important links remain.

  3. Subsidiary. A parent-child arrangement, in which the development arm is a subsidiary of, and fully answerable to, the community organization. It is not only historically a creature of the community organization but continues to be subordinate to it, legally and structurally.

  4. Expanding to Embrace Development. The maintenance of a single community organization which expands its mission to include development activity. No separate corporation or other independent entity is set up, but there may be some internal differentiation among staff, with the establishment of what amounts to a development office or "desk."

  5. Joint Venture. The utilization of joint ventures with other nonprofit organizations or private developers as a way of engaging in development. The community organization thus has a direct role in development but relies primarily on its partners to actually do the day-today technical work. It may or may not create a subsidiary, but its emphasis continues to be on advocacy and direct action.

  6. Shifting to Development Exclusively. A community based organization evolves into a corporation exclusively concerned with development, leaving organizing and advocacy tasks to others.

As might be expected, in real life there are many variations on these basic forms.

One Organization's Experience: Detroit's MACO


An interesting example of an organization which combines tough community organizing with growing development programs in the same structure -- and has them reinforce and strengthen each other -- is MACO, the Michigan Avenue Community Organization, in Detroit.

MACO was formed in 1974 when church and community leaders on Detroit's southwest side decided to launch a community organization which could bring people together to tackle a growing number of community problems. The area had historically been made up of Polish immigrants and their descendants but had been witnessing substantial racial change. Following the classic Alinsky approach, the group hired organizers who knocked on doors and called meetings to identify the issues and people that would start the community moving. After initial success with such small, seemingly universal issues as stop signs and stray dog control, MACO moved on to larger issues. In the early years these were crime, a wave of foreclosures on FHA-insured homes and deficient public services.

MACO had substantial impact on these issues and attracted a broad following within the community. MACO's annual conventions brought together hundreds of people to elect leaders and vote on priorities for the year. MACO's staff organizers, leaders and members then pressed local government, absentee landlords, HUD and others to meet community needs. They demanded reforms and the allocation of more funds and services to the neighborhood.

Expanding To Do Development

After several years of organizing and action on these community issues, various people within MACO began to feel that the organization should add a new dimension to its work. They felt that -- through MACO -- the community needed to develop its own plan for improving the neighborhood's housing and commercial strips and for reusing land left vacant after abandonment and demolition. And they believed that MACO must consider taking on direct responsibility for carrying out part of this plan by itself, no longer relying solely upon a strategy of pressing outside institutions to meet community needs.

MACO therefore created a Community Renewal Committee. With funding from the city's Community Development Block Grant and HUD's Office of Neighborhood Development, MACO developed a community plan. It then took on responsibility for administering a rehabilitation loan and grant program and other housing programs. The organization also began to develop a merchants' association on Michigan Avenue and to consider various ways to revitalize that commercial strip.

As MACO added these new community development activities to its organizing program, tensions began to arise. Could MACO continue to criticize for better public services, more police, quicker demolition and changes in policies for disposing of city-owned vacant lots, while seeking CDBG funding and city cooperation on the rehab loan and grant problem? Could the organization protest against redlining and then work with banks on revitalization programs? Could the community demonstrate at a General Motors shareholders meeting and then ask GM to contribute to the housing program under the state's Neighborhood Assistance Program? MACO leaders recognized that there were no certain answers to these questions. They also recognized that these questions were beginning to tear the organization apart.

Factions were already forming with leaders and staff on three sides. One side believed that MACO should pursue a purely organizing agenda; others favored the transformation of MACO into a Community Development Corporation or the creation of a semi-autonomous CDC; and a third group was committed to pursuit of a dual agenda within a single organization. As usual, the debate was further complicated by personality conflicts and a power struggle which were often masked by the "ideological battle" between organizing and development. These conflicts nearly forced the organization to split in two in order to end the bitter infighting.

Confronting Organizational Change

In 1982, MACO's leaders established a process for involving all of its leadership and staff in a careful detailed discussion of how to best tackle the community's diverse needs. Beginning in October with a two-day retreat on an island near Detroit, the leaders of MACO's board and the Community Renewal Committee sat down with MACO's staff and technical assistance specialists to thoroughly review MACO's priorities. They discussed how decisions were being made within MACO and how people felt they should be made, including:

  • how to handle new issues or development possibilities when they emerged from the community;

  • what role each of the staff people, the committees and the board should play;

  • what decisions should be made at each level;

  • what reviews were appropriate at higher levels.

They hammered out in detail how to assign responsibilities for developing budgets, establishing staffing patterns, hiring, firing, supervising and all of the other basic management tasks which determine how an organization functions.

Starting with a tense, almost confrontational situation, MACO's leaders and staff developed a consensus within four months. They agreed on a new structure and division of responsibilities which have settled the major disputes and served MACO well since that time. Only a few participants were so unhappy with this reorganization and related staffing changes that they withdrew from involvement in MACO.

MACO chose to combine organizing and development in a single organization. Under the agreements, the director delegates responsibility for the housing and economic development activities to a deputy who, in turn, supervises the planning and development staff. In establishing a new committee to oversee the development program, MACO's board carefully chose to fill it with people committed to developing an internal capacity both to operate development programs and to involve people and develop leadership through direct action organizing. That committee has been delegated a substantial amount of policy authority, but its decisions are subject to board review. Subsidiary corporations are being established as needed for particular ventures, but they are shells, truly subsidiary to and staffed by MACO. A criterion in selecting future staff is the extent to which a candidate is committed to both organizing and development.

Using Advocacy To Bolster Development

Since these decisions, both MACO's organizing and development activities have grown. One example is a successful campaign which depended on both MACO's growing track record and the muscle it could exert: after a major display of power with the City Council, MACO convinced the city to increase MACO's CDBG and its authority to run a rehab loan and grant program. MACO then launched an organizing campaign aimed at securing Emergency Jobs funds and bank financing for a loan pool to help small industries expand in southwest Detroit. MACO leaders, development and organizing staff and industrial development specialists from Wayne State University joined in this campaign. They used a combination of expert plans, mass demonstrations and negotiations. The result -- a loan pool of private funds and $481,000 in CDBG and Emergency Jobs money projected to generate 100 blue collar jobs in the MACO vicinity. The small manufacturers are now asking MACO to continue working with them on a sustained program to generate economic development and jobs in southwest Detroit.

Now that MACO has decided on marrying organizing and development, it is considering how it can best expand its impact on both fronts. It is planning to enlarge its housing rehabilitation program. It is considering developing a plan for the most abandoned part of the neighborhood where the many vacant lots and homes require a comprehensive approach and massive resources. And it is exploring how to convince the banks, the city and the state to make a far larger commitment to revitalization and development in the neighborhood. In pursuing all of these goals, MACO is following a strategy which involves the community in action research and the development of its own plans and which combines community pressure with community control of development -- an ambitious, comprehensive approach which seems well suited to the organization.

Lessons For Other Community Groups

MACO's approach has been to combine organizing and development in a single organization whose board and central staff are responsible for a wide spectrum of activities. This approach seems to be working for MACO because it fits well with the organization's analysis of the community's needs, how MACO can best involve and empower the broadest cross section of community leadership in addressing those needs and how it can gain maximum support from the public and private sectors. It fits MACO's leadership, staff and context. Everyone agrees it would not fit so well in other places where the needs, personalities and political environment are different.

Nevertheless, there are certain lessons from MACO's experience which can be useful to other community organizations:

  • No matter how courageous, community organizations are obviously not immune to the pressures of local political and economic institutions. They must adapt their responses to reflect the great differences in the environments they face. In a less tolerant or elastic environment, or with less powerful community support, MACO might have found it preferable to put more apparent structural distance between its organizing and development activity. What was possible in Detroit probably would have been impossible in Mayor Daley's Chicago.

  • What may be a productive strategy in dealing with one bank or corporation may backfire completely with another. In some places, it is exceedingly risky to bite the hand that feeds you. In others, if you look hungry, you get more respect.

  • A single organization can successfully combine organizing and development strategies, and the payoff for the community can be great -- if this dual approach fits the organization's needs, capacities, style and context.

  • Successful pursuit of a dual strategy depends heavily upon the board and committees. The leadership must be actively involved in setting policies which are designed to support both organizing and development. It must constantly be ready to remind the staff to forget any ideological differences they may have and to concentrate on working together to meet the community's needs.

  • To minimize conflict, the organization must give careful attention to the composition of the board, the key committees and the staff. Questions of balance, respect for each other's skills and points of view and clear delineation of roles and authority become very important.

  • To successfully pursue a dual strategy, it is even more vital than usual that the organization be very clear about its goals and priorities. out great clarity and broad consensus, an organization may find the strain of constantly balancing two very different sets of activities to be too great.

  • It is also even more essential than usual that the group establish a management system which ensures that there is close coordination of the organization's diverse activities and that these activities are complementary rather than in conflict.

  • Finally, there must be a process of constant reassessment of the organization's agenda to guard against growing imbalances and conflicts. There also must be an ongoing affirmative search for opportunities to bring leaders and/or staff people with different orientations together to work on common projects. (E.g., having the development staff help research issues which will be addressed through direct action; having leaders who are normally preoccupied with organizing campaigns help the development staff design a housing rehab program which keeps community people actively involved, despite the delays and technical complexity inevitably involved in such ventures.)

Another Organization's Approach: Cleveland's Union-Miles


After equally careful planning, the Union-Miles Community Coalition in Cleveland approached development in a very different manner. Union-Miles is a virtually all black, low to low/middle income neighborhood on Cleveland's southeast side. The area consists largely of one- and two-family wood frame homes, most of them owned by their occupants. The area has a population of roughly 40,000 and has clearly seen better days.

The Union-Miles Community Coalition was organized in 1978 to deal with neighborhood issues. It is a membership group, built around existing block organizations and local leadership. Its design follows the tested formula derived from Alinsky's "Chicago School," which has been very influential in Cleveland's neighborhoods. The organization developed out of concern with disinvestment, the deterioration of the area's housing stock and the lack of municipal services. The Coalition started rapidly by tapping local grievances, generating a lot of activity in a very short period of time.

Shortly after its formation, Union-Miles filed a challenge under the Community Reinvestment Act (CRA) against the expansion plans of a local bank, charging it with disinvestment. As a result of this challenge, the bank agreed, in June 1980, to fund and make loans to a local development corporation.

Union-Miles realized that it had achieved part of its goal by getting the bank to realize its responsibilities, but that it had no mechanism to generate benefits for the community from the concessions it had won. In the absence of a vehicle that could use the bank funds for revitalization, it did not mean much that the bank was willing to reinvest in the neighborhood. A further complication was that the Community Coalition wanted to continue to address a wide range of neighborhood issues and therefore was reluctant to go into the development business itself.

Because the Coalition wished to be sure that whatever activity was undertaken with the bank's promised resources would be in keeping with its original goals and with neighborhood needs, it drew up a plan for a separate development corporation with permanent structural links to the Community Coalition. It then organized the Union-Miles Development Corporation (UMDC) in mid-1981. The Coalition's Congress elects 12 of UMDC's 15 board members from the Coalition's membership. The remaining board members represent the three commercial banks which back the development corporation. (The bank that was the original target of the CRA complaint convinced two others to join it in forming the CDC.)

The Development Corporation's by-laws establish other links. They require that each project be approved and overseen by a special community-dominated "governing task force." A task force for a housing rehabilitation venture, for example might be composed of several block clubs in the area where the renovation is planned. Furthermore, certain of the Development Corporation's by-laws can be amended only with the Coalition's consent, including a rule that the Development Corporation may not undertake any organizing activity on its own. Organizing and consciousness-raising are the Coalition's job; the CDC is responsible for the technical and financial aspects of the development work.

Union-Miles appears to have moved into development and the creation of a second corporation with few misgivings and a good deal of confidence. It appears that the enthusiasm growing out of an important Coalition victory, and the careful planning, gave the new Department Corporation a committed, informed board.

Development Results

In less than three years of operation, the Development Corporation has amassed a solid base of accomplishment. It has acquired, rehabilitated and sold 15 homes to households in the $11-$18,000 income range, mostly to single mothers who work at service jobs in Cleveland. The Corporation has also done more modest repairs on 25 houses, including emergency maintenance, exterior repairs, painting and weatherization; and it has insulated and weatherized 20 additional homes. The UMDC has also conducted a large number of energy audits for homeowners in the district and has sponsored and coordinated a free paint program which has resulted in the exterior painting of 200 houses.

Finally, the Corporation has initiated a widely noted legal test case, using receivership laws to take charge of an abandoned home. After appointment by the court, the UMDC rehabilitated the home and installed rent-paying tenants, pending acquisition via foreclosing the lien that it now has against the property. As a result of the case, state legislation has been introduced clarifying the right of court-appointed receivers like Union-Miles to salvage derelict housing. The UMDC's plans for new projects include syndication of a small rental building, as well as some non-housing business ventures.

Union-Miles feels that it has gone the right way in structuring its development activity, and that it has begun to achieve the kind of revitalization it wants. The Development Corporation has been able to attract resources, perform professionally and gain credibility with public agencies, banks and the private sector. However, UMDC is self-critical in several respects, especially regarding the banks' participation in its programs. Basically concerned with meeting CRA requirements, the banks have not contributed large amounts of money, nor, so far, done much to encourage other corporate support of the UMDC. They are involved because the community organization pressed them to be and because the CRA requires them to be. The Development Corporation feels that, by itself, it has limited leverage to get the banks to take it more seriously. Continued pressure by the Community Coalition is seen as essential to maintaining active bank participation in the UMDC.

However, because the UMDC's board is largely made up of the Coalition's original CRA/Banking Committee, the Development Corporation has siphoned off some of the energy which previously went into organizing on issues -- energy the Development Corporation now needs. The creation of two separate organizations requires a broad neighborhood leadership base; otherwise, the leadership pool gets spread thin because it must cover too many fronts. The danger is that the staff will become overly involved in policy-making, with professionals making decisions that should be left to community leadership.

The Career Of The Coalition

While the Development Corporation has prospered and established itself, the Community Coalition has gone through a difficult period and is now in a rebuilding phase. It is tempting to see in this a cause and effect relationship, confirming the fears of those who argue that issue based organizations should not get into development activity. But the Coalition's problems can largely be explained by other factors, not by the advent of the Development Corporation. Indeed, there are respects in which the successes of the Development Corporation have helped to hold the Coalition together, giving it a foundation for rebuilding.

Funding has been a fundamental problem for the Community Coalition. While this is not the only source of its problems, it is clearly a basic one. Union-Miles' core funding came from Cleveland foundations, which have followed a general rule of funding neighborhood groups for only three years. In the case of Union-Miles, funders made several annual extensions, but slowly and surely, the support dwindled.

This appears to be a national pattern and certainly is a problem for other organizations. Another difficulty is that foundations, corporate givers and other funding sources often find it more comfortable to contribute to grassroots neighborhood improvement by supporting development, rather than organizing. Thus, it is harder than ever to get funds from most sources for advocacy and organizing.

The Coalition recently appointed a new executive director who has brought renewed vigor and confidence to the organization. Funding, however, continues to be a central problem. One unfortunate result of the funding difficulties is that the Coalition's staff is down from seven to three, limiting the number of issues it can tackle at once.

Some Conclusions

Union-Miles' experience suggests that launching the Development Corporation created an important asset for the Coalition: It added development capacity as funding for organizing waned, gave leadership something to hold onto when the going got rough and helped maintain the neighborhood's credibility during hard times.

Under the circumstances it was also fortunate that UMDC was established as a separate entity. This prevented its getting caught up in the Coalition's financial hard times and enabled it to get on with its development work without distraction.

The Development Corporation's conviction that it needs a strong community organization behind it is striking. In addition to creating pressure on the banks and the city government, the Coalition has helped the Development Corporation sell its rehabbed houses by strengthening the perception of Union-Miles as a viable place to live -- a neighborhood where people are concerned and prepared to work for improvement. UMDC welcomes the Coalition's renewed vigor and success.

While UMDC shares the Coalition's basic long-term goals, the two organizations' short-term strategies are not necessarily the same. Despite its resident-dominated board, the CDC acknowledges that it can find itself drifting away from community objectives, increasingly captured by the requirements of the network of institutions and values reflected in traditional development activity. Continuing pressure from the Coalition's leadership and membership is necessary to make sure that the CDC is in step. Unfortunately, the "governing task force" concept, which was a key element of the original plan, has not been fully activated, according to UMDC's director. The result is that instead of pre-planning and clearing a program with the grassroots, the Development Corporation is likely to have to adjust its programs, as local residents begin to assess what is happening and register their concern.

The original Union-Miles design contemplated using the Coalition staff to organize neighborhood support and participation, as well as to market UMDC's programs to the grassroots. So far, the Coalition has received approximately $20,000 for carrying out such neighborhood marketing efforts -- a modest sum, but not trivial.

Perhaps the single most important rationale for structuring two separate organizations is the Coalition's clear desire to maintain a multi-issue orientation. The Development Corporation acknowledges that its orbit is limited, and that it is only addressing some -- albeit very important -- needs of the Union-Miles area. Without the Coalition's broad orientation, issues like health care, education, safety and a host of others would tend to get ignored in the concentration on physical and economic development, which, along with employment, comprise the Development Corporation's basic agenda.

Union-Miles' experience suggests that the cutbacks in public programs for physical and economic development make engaging in development even more relevant for neighborhood groups than it was several years ago. In the new environment, a strong neighborhood role in the distribution of limited resources, and emphasis on gaining maximum impact from each dollar, become extremely important. The UMDC formula, despite its acknowledged difficulties, has stood up well, given the shifts and changes that have occurred during its relatively brief existence. The mutual benefits have clearly outweighed the difficulties. The Union-Miles experience confirms that both types of activity are important and can be mutually supportive -- sometimes in unexpected ways.

[This case study and the Appendix describe transitions in UMDC and the Buckeye-Woodland Organization during the period from 1978 to 1984.]

Being Sure Your Organization Is Ready To Take On Development Responsibilities

Organizers and community leaders with experience emphasize five prerequisites to direct involvement in development:

  • capacity;
  • core financial support;
  • legitimacy within the community;
  • credibility with the outside world; and
  • some overall plan and strategy.

Realizing each of these fully is of course a tall order, a standard which would disqualify most real life community organizations. But these criteria point to the most important considerations in weighing a move into development, and they help to emphasize the importance of timing. Technical assistance professionals tell tales of many groups which took on too much too soon -- more than they were ready for. Groups themselves, enjoying some measure of success in their first ventures, are quick to point out how unready they would have been just a year or two earlier.


Capacity is difficult to define and measure, but it is clear that a certain level of staff resources, leadership sophistication and ability to manage complex tasks is required before a group can move into development. The complexity of development at the neighborhood level is sometimes exaggerated by public officials who wish to discourage it or by competitors in the private sector. Nevertheless, it does involve a lengthy series of interrelated steps that puts a premium on preparation, coordination and attention to detail.

It is not the individual tasks themselves, so much as the management of a complex whole over time, that makes development demanding in a way different from organizing around issues. Few organizations can boast of an initial modest venture into housing rehabilitation (to take the most typical kind of first effort) that required less than two years from conception to the beginning of construction work. Average start-up time is probably considerably longer. The painstaking assembly of all the critical ingredients (property, financing, plans, approvals, insurance, etc.) that characterizes development is a very time consuming process that is repeatedly underestimated, even by hardened veterans.

The most common route to increasing quickly the capacity of a community group to do development work is to add one or more people to the staff who have housing or economic development experience. Having an expert on staff is obviously extremely advantageous, whether that person is brought in after extensive experience elsewhere or is trained on the job. However, community groups which have pursued this route have had to confront several practical problems -- finding someone with sufficient practical experience and expertise, paying enough to attract such a person and then fitting him or her into the organization's structure, staffing pattern and style of operation. A number of these issues are discussed later in this handbook.

Local groups frequently increase their capacity overnight by entering into joint ventures with private partners, rather than undertaking sole sponsorship of a development project. This approach allows the group to:

  • supplement its own knowledge and expertise;
  • raise equity or venture capital which it cannot command itself; and
  • minimize financial risk.

This trend has been hastened by recent changes in federal housing programs and tax laws which have focused more attention on syndication and the sale of tax shelters as a primary way to finance low income housing. It is only through an investment partnership that a neighborhood developer can take advantage of these tax benefits.

Several approaches to structuring such partnerships are available. The simplest is to create a for-profit subsidiary, but this has disadvantages, particularly those relating to taxation of income. In certain circumstances it can jeopardize the parent organization's tax-exempt status. Alternatives are establishing a nonprofit subsidiary or entering into the project directly. Knowledgeable legal counsel and technical advice on appropriate structure and possible pitfalls are essential.

Resources And Time

Raising funds for support of the central staff has become more difficult in recent years, as several funding sources have shifted to funding specific projects rather than central staff. This has increased the pressure on community groups to look to economic ventures as sources of core support.

However, while the development program may be able to attract or produce its own support in the future, it is unlikely, certainly in the early stages, to help support the community organization. Indeed, the resource relationship typically runs in the other direction, with staff and leadership time -- as well as in-kind services, office space and the like -- donated by the community organization in order to get the development activity started. This investment may have to continue for years.*

* For a useful analysis of this and other issues related to community economic development, see CCC's Looking at Income-Generating Businesses for Small Nonprofit Organizations by William A. Duncan.

Legitimacy In Representing Community Interests And Goals

One of the important things a community based organization brings to development activity that others cannot is consumer support. This support is one of the strong arguments for pursuing development through such entities. And the perception that a neighborhood development organization represents the political will of a constituency (and that it can mobilize this will if necessary) can substitute for the prior experience and capital that might be required of another development entity.

Maintaining legitimacy within the community, however, will require acceptance of the venture into development. Community leaders and members are likely to raise various concerns about the organizations taking on a new role. (Some typical doubts are reviewed later in this guide.) Sufficient attention must be given to these concerns, with decisions arrived at publicly and democratically, so that the organization continues to represent the community's interests and maintain credibility with its constituency. While it is difficult to maintain the same level of consultation and review for each step of the development process, concerted efforts need to be made to keep the community abreast of the work and to test its overall concurrence in it.

Outside Credibility

A "track record" is the requirement most often emphasized by experienced practitioners. It reflects the judgment that banks, contractors, property owners and public agencies will only trust their resources to or go into partnership with organizations they view as businesslike, dependable and durable. In general, a group not only need to have established itself as a local power and spokesperson for a broad range of community interests in order to move into development work, but it will also have to convince others that it is sufficiently organized and skilled to accomplish what it sets out to do. The outside world may not fully approve of you or your approach, but it must have respect for your abilities.

The riddle here is how to build a track record when you need one to get started. Successful groups tend to deal with this problem in one of four ways. They hire an expert staff person or consultant. They go into partnership with someone who has an established reputation. They use political pressure and organizational influence to get what they need without meeting the usual requirements. Or they begin modestly, so that the increment of faith they are asking from others is relatively small. Groups can also gain some credibility if they have demonstrated their ability to achieve results in undertakings of roughly equivalent scope or complexity, even if they do not involve development.

A Plan Or Overall Strategy

Many neighborhood groups wander or stumble into development activity because there is public money or land available or a private developer makes them a proposal.

Experienced practitioners recognize this reality but nevertheless emphasize the importance of planning, so that the organization can act on a community's needs rather than simply react to a source of funds or a one-shot proposal. Without a plan which reflects neighborhood needs and priorities and which has broad community backing, the organization may never achieve the sense of direction, power or efficient use of resources which are essential to getting projects underway. Planning also is required to choose an appropriate organizational structure clarify the roles of staff and leadership, delineate staff and resource needs and reach agreement on how to make improvements and fill gaps.

Some Nuts And Bolts

Selecting Development Staff

There are three basic approaches to hiring staff for a development venture:

  1. selecting people who already have technical skills;

  2. choosing able people and helping them develop their technical skills on the job; and

  3. borrowing technical skills from other organizations or from partners in the development process.

Each of these approaches has advantages, and most organizations employ some combination of them. Certain rules of thumb may be useful for groups considering these options. First, experience shows that it is often difficult to hire people who have already developed technical expertise. For one thing, it tends to be expensive. For another, there is a relatively small pool of individuals who combine technical skills with a sensitivity to the special nature of community-controlled development and a commitment to community work.

Second, there is a fair amount of unanimity that the key skills in a development director are managerial as well as technical. This consideration has led many groups to select "doers" or managers to head development entities, rather than people with specific technical backgrounds. In a recent survey of its experience in working with the National Training and Information Center and assisting community groups to launch housing rehab efforts, Aetna Life and Casualty concluded that "technical competency in the field of development was somewhat less important initially than personal qualities of perseverance, an organized approach to goal setting, familiarity with the neighborhood and the organization and the ability to gain the confidence and respect of the neighborhood leaders."

A third consideration leads many groups to seek a development director with a community organizing background or at least some experience working with community groups. They want the person to be sensitive to community issues and committed to the principle of citizen control. Some who have been forewarned also hope that this will help minimize future staff conflict between organizing and development.

One major difficulty with emphasizing managerial skills and an organizer's outlook is that it neglects a key contribution that people with development backgrounds bring to a group with no prior experience -- they know how the game is played. As an experienced neighborhood leader put it, "They know how you're going to get beat." A professional can protect an organization against being taken advantage of or entering into inadvisable deals and arrangements. Some groups have tried to fill this deficit (until such time as their own staff gains the necessary savvy) by creating an advisory committee of experienced technicians to review all proposed projects. Other alternatives are to rely on outside technical assistance or consultants for guidance or to arrange joint ventures and rely on a more experienced partner to handle the technical end.

Technical Assistance

Because development is new territory for community organizations, almost all need some outside assistance in negotiating their way. There are virtually no local development groups which have been successful without outside technical support, at least in their first ventures.

However, there are several difficulties in relation to technical assistance. The right kind of assistance is not always easy to get, for the advisors must be familiar with local circumstances and sensitive to the other dimensions of a community organization's life. Furthermore, groups do not always know or acknowledge that they need help. Grassroots groups typically have a healthy skepticism about consultants and claims of superior wisdom based on professional credentials. They have learned to reject the argument that others understand their needs better than they do. The danger is that out of pride or parochialism they will not seek the kind of experience that is essential to the successful execution of a development project. Development is too complex to ignore the skill of those who have repeatedly dealt with similar problems and have a base of experience and knowledge to call on.

The only productive way to remain in charge and simultaneously get essential expert assistance is careful management of the client-consultant relationship. Most groups learn this on the job, but there are some general rules of thumb:

  1. Scope of Services. Identify as clearly as possible the nature of the problems you wish help on and the product or result you expect to get. Unless you identify the problem, the consultant will tend to define it in terms of his/her particular skills. The definition of the desired product is clearer when hiring an architect than a financial specialist or "packager," but the essential problem is still identifying a mutually agreed upon scope of services. In this aspect of development, the clarity of the initial contract and its periodic review (and renegotiation if necessary) are the best predictors of a successful relationship.

  2. References and Past Experience. The best sources of good technical help are other community groups. Checking qualifications and references is essential and helps to establish expectations of accountability from the beginning. Instincts are still the best guide. Even if a potential consulting group checks out, if they don't feel right to the key members in your organization, look elsewhere.

  3. Test the Relationship and Periodically Evaluate the Work. A dilemma groups moving into development face is how to handle consultants when the group is so new to the requirements of development work. One course is to retain a consultant under a modest, short-term arrangement which asks her/him to produce a feasibility study or a development plan outlining future requirements. This allows the client group to educate itself about future needs and at the same time test the working relationship with the consultant. Clients should periodically review their work with consultants to be sure both parties are satisfied with the results and the process.

Assistance on legal issues is especially important throughout the evolution of any organization. As groups move into development, it may be necessary for the parent corporation to establish subsidiaries. In general, protecting one organization from the liabilities of another will sometimes dictate structure, quite independent of political or organizational considerations which may also make some separateness and insulation desirable. In developing a housing project, for example, securing the necessary financing may require the establishment of a nonprofit housing corporation. If the organization is planning to establish profitmaking businesses, it may well establish a subsidiary holding company which will, in turn, own each separate venture and channel any net proceeds to the parent corporation. State laws may also affect decisions on legal structure. One absolutely fundamental step for a group contemplating development is to get appropriate counsel from an attorney who is knowledgeable in this area.

Among major sources of technical assistance for neighborhood developers have been a small group of national organizations which charge no fee or only a nominal one. These have included the Center for Community Change, the National Council of La Raza, the National Training and Information Center, the National Center for Urban Ethnic Affairs, the National Economic Development and Law Center and the Housing Law Project. The Development Training Institute of the Corporation for Public/Private Partnerships offers a national training program for the staff of development organizations. The Local Initiatives Support Corporation and the Enterprise Foundation also offer community development organizations advice, loans and technical assistance.

There are also important sources of technical assistance at the local and regional levels. These include neighborhood legal services and, in many cities, community design centers, management support groups, associations of community development groups and others. Many universities established clinic or outreach programs in the heyday of community action programs, and some have matured into highly sophisticated local assistance centers. The Pratt Institute's Center for Environmental and Economic Development in New York City is perhaps the most well-known example. Other community development assistance centers include Mountain Association for Community Economic Development, the Rural Community Assistance Center and community design centers in several dozen cities.

Some areas are particularly fortunate in having well developed infrastructures with a fairly clear division of labor, if not total agreement on the correct approach to development. Denver, for example, has the Center for Community Development and Design at the University of Colorado, which provides planning, architectural and development assistance; the Community Resources Center, which works with organizers and new community groups, and, until recently, a third center which helped nonprofit organizations with administration and organizational management.

Some organizations turn to private consultants, attorneys in private practice or individuals on loan from private corporations (e.g., a financial officer from a local bank) for needed assistance. It is, however, often difficult for community groups to get a full evaluation of the skills, commitment and sensitivity of consultants or attorneys who have not already developed a track record working with similar groups and demonstrated their competence and integrity. Furthermore, in selecting individual consultants, the organization may not gain access to the kind of holistic assistance on organizational structure, management and resource development at the same time that it obtains advice on specific projects or development deals.

Some Problems With Neighborhood Based Development Activity And How Groups Have Addressed Them

Diverting Energy And Resources From Community Organizing

The biggest worry groups have about development is the potential drain on time and energy. Some groups feel that going into development has weakened them. Some neighborhood leaders have become discouraged by the amount of time that must be invested before there are visible results, and they have resigned in frustration or simply drifted away.

Groups report that it is increasingly hard to maintain support for organizing and advocacy at the same time that they are getting into neighborhood based development. Because it is more supportable, because what it promises is more concrete and perhaps because of its novelty, development activity can seem to be displacing a group's previous objectives.

Two large organizations in San Antonio and Houston, both organized by the same staff director, have strictly avoided a direct role in development, citing fear of diversion as a major reason. Citizens Organized for Public Service (COPS) in San Antonio and The Metropolitan Organization in Houston are both dedicated to neighborhood improvement and have pressed local government to promote reinvestment and revitalization. Yet their "development staffs" are basically monitors and watchdogs who try to influence the development process indirectly. Neither organization has established a separate development corporation. The organizer who helped create these groups feels that if the community organization is strong enough, it can enforce its interests regardless of who are the direct agents of development. Moreover, he regards the risk of stunting the drive toward citizen power and control as too great.

The decline and loss of energy that many community based organizations seem to encounter between their third and fifth years often result from a lack of consistent core financial support or an organizational crisis that requires resolution, quite independent of the addition of development to the group's activities. It can be a life cycle problem and not a problem created by the development activity itself. One basic reason for organizational crises in relatively mature community groups is the rule followed by many funding sources that after three years of support, groups should be self-sufficient and no longer dependent on the assistance they enjoyed in their formative years. Because development activity may be easier to fund (and may even generate some portion of its own core support), the group's funding base and balance may shift, making it appear that development has siphoned off money and energy from the parent organization and caused those problems which would have emerged anyway -- problems that may be caused by the lack of funding for organizing, rather than the dangers of taking on development responsibilities.

If an organization that it will face an increasing problem in maintaining funding for both its core staff and organizing, it should take several steps, including: redoubling grassroots, church and foundation fundraising; trying to include both core and organizing expenses as part of the development program's budget; and, if the development projects are producing any income, allocating some or all of the income to cover core staff and organizing costs.

Tying The Community Organization's Hands

A second major concern is that involvement in development may tie the hands of the community organization in its other work. Citizen groups worry that they may become, or may be asked to become, overly cautious to avoid damaging a carefully created development package which depends on city or private sector cooperation. This concern is reflected in the general uneasiness that leadership and staff can feel working alongside institutions and individuals with whom they previously fought. The very idea requires some adjustment.

There is no simple solution to this problem, yet many groups claim that it is less of a problem than it may seem. As noted above, a number of people in the field report that the credibility of a community organization and its capacity to apply pressure actually help rather than hinder the group's ability to attract resources. They cite gains in obtaining more Community Development or other funds, or victories under the Community Reinvestment Act, as examples of how pressure from groups can increase their access to resources for development. One veteran staff director proposes this axiom: If use of constituent power opens more doors than it closes, then the overall result is positive. One well-known leader in the field goes even farther: he argues that pressure seldom jeopardizes resources, and that -- once a funding source has made an initial investment in a group -- it is unlikely to pull out and put the investment it has already made at risk, even if it does not like the group's stance on a particular issue.

This does not mean that compromise and cooperation should be rejected, but rather that a group does not have to make friends with everyone in order to do development. A properly planned development strategy will harness the self interest of all parties involved to see the work through, even where there is a certain amount of continuing conflict.

The predominant view, however, is that a change of tactics is sometimes required. Demonstrations and marches on City Hall now become costlier. Downtown interests are less likely to want to do business with groups they consider volatile. Furthermore, groups that succeed at development activity generally feel they have built power in a new way. They find they have more clout of a traditional kind: they have more credibility, get consulted more, are invited to sit on task forces and generally get more respect. Nevertheless, organizers and neighborhood leaders speculate that the implicit threat that a group can still mobilize a constituency gives it more legitimacy and power than groups which represent only themselves or are viewed exclusively as development corporations.

One way to avoid self-inhibition is to spin off the development corporation and formally insulate it from the parent community organization, as outlined earlier. Some groups which have spun off separate corporations, while formally linking them through board membership, report that the citizen's organization can claim an arm's length relationship with the development entity and generally make this claim stick, even where "everyone knows better." This may follow because the same technique is employed by many business firms and public organizations which find it difficult both to play the game and denounce it. The arrangement does, however, require crossover board members with strong nerves.

An interesting variation on the structural approach to dealing with the "punch pulling" problem has emerged in New York, Chicago and San Francisco. The Association for Neighborhood Housing and Development (New York), the Chicago Rehab Network, the Chicago Association of Neighborhood Development Organizations and the Council of Community Housing Organizations (San Francisco are citywide coalitions of community groups.

They began as technical assistance units, information clearinghouses and advocates. As the constituent coalitions' groups have moved more and more into development, the citywide umbrellas have acted increasingly in an organizer's role, leading on controversial issues, taking the heat (especially from City Hall) and, to some extent, buffering the individual organizations against retaliation.

The case of the West Harlem Community Organization (WHCO) is instructive. WHCO was organized in the 1960s to protest Columbia University's plans to build a gymnasium in a city park bordering West Harlem. It then turned to tenant organizing, primarily around housing issues. In recent years, WHCO has emphasized housing development and management and does only a modest amount of direct organizing, mainly in its own buildings. The group moved into development for several reasons. One was that it could not continue to raise the funds to staff a full organizing effort. Another was that the community began to demand something concrete from its efforts, beyond vetoing others' proposals for the area. In the words of the executive director, WHCO would have "lost faith with the community" if it had not begun to deliver direct improvements in neighborhood conditions.

WHCO has supplied the chairperson for the Association for Neighborhood Housing and Development for virtually the entire life of the association. Thus, it is as intimately associated with that coalition's activities as any group in the city. The Association has taken a number of controversial stands and has opposed many city initiatives and policies in the housing area. WHCO reports that its leadership role has brought it some harassment from elected and appointed officials, but that none of it has been fatal, nor has WHCO even felt it had to trim in any significant way how it voted on ANHD's board. WHCO has been involved in the rehabilitation of several hundred units and continues to manage city-owned property and to do development in cooperation with public agencies at every level.

Leadership Doubts

It is not uncommon for the leadership of a citizen's organization to hesitate and resist moving into development, often because of some of the good reasons noted above. But such reluctance may also reflect insecurity about moving from an arena where leaders have felt increasingly effective (assuming that the organization has won victories and grown) into unfamiliar territory. Leaders may worry about feeling inadequate again, as they might once have felt in dealing with the early issues their organization tackled. And they may worry about "losing" the organization to the staff or to technical experts.

These concerns are natural and in some sense inevitable. The fundamental way to address them is to help the organization's board members understand the critical role that leadership plays, regardless of whether it has experience in development. Leaders need to see that their common sense and judgment based on experience is critical to making policy and advancing the collective interests of the neighborhood. Board training by organizational consultants who are sensitive to these issues and experienced with community groups could be very helpful in this area.

Concerns that a development corporation's staff might come to dominate its board are not unreasonable, since the complexity of the development process makes it difficult to keep a board informed. Moreover, on some issues, consultation with the board may have to be limited. The dangers of disclosure, delay or loss of opportunity mean that not everyone in the neighborhood can debate which buildings to buy and rehabilitate. Thus, staff consultation may tend to be less perfect and thorough than during the earlier organization-building activity to which the leadership is accustomed.

Board members of one of Cleveland's development corporations who also sit on the Community Congress' board commented on the different ways in which the staffs of the two organizations operate. The community organization staff constantly feeds information and gives support to leadership, always calling to remind them of every meeting or event. The staff of the development organization is much more involved in the task of putting projects together and therefore spends less time "feeding" the leadership and keeping them informed. Thus the board's role is different in relation to the two kinds of activity, both cases it is essential that the board remain the final arbiter of policy. Training for board members can help accent the differences and prepare lay persons with experience in one role to better appreciate the demands of a new one.

Providing some form of direct technical assistance to the board is another approach. Some years ago, Southeast Development, Incorporated (SDI), the development arm of the Southeast Community Organization (SECO) in Baltimore, established an investment advisory committee of outside experts. Three lay members of SDI's board of directors sat in with that advisory group on a rotating basis, primarily to learn. The advisory committee had no decision-making power with regard to projects, but it did review each of them in technical terms and advised the leadership. This arrangement helped to reduce the amount of training and learning that had to go on during SDI's regular board meetings. Moreover, it gave board members an opportunity to ask questions and develop their understanding in a less pressured and more private setting.

Another approach -- seeking out and appointing development professionals to the board of a community organization or its separate development arm -- is worth considering, but it has some drawbacks. There is the potential that appointed professional members of a development corporation board will try to dominate, or be allowed to dominate, board deliberations because of their technical expertise. Ultimately, the best solution to these problems is to address board members' need for information and training and help them acquire the understanding and confidence they need to feel like equal partners in development activity.

Building A New Organization's Sense Of Mission And Training Its Staff

It is important to orient staff hired for, or reassigned to, development activity to make sure that they understand the history and purposes of the parent organization. Similarly, it can be very healthy to give nondevelopment staff some orientation to the nature and purposes of development activity.

In most community organizations, however, staff training is given more lip service than true attention. Initially, the number of new staff is small, and an organized orientation effort may seem too formal. Intentions to do training can easily be put aside because of the press of other business. The temptation should be resisted.

Fortunately, there is a small but growing interest in the application of organizational development techniques, team building, role negotiation and similar approaches to help parent organizations deal with growth and change and to give new development cadres the benefits of a self-conscious approach to organization-building. Many people trained in organizing and community work have process skills and experience in organizational diagnosis. Nevertheless, in their capacity as staff to a particular neighborhood organization, they are part of the system. It is typically best, therefore, to bring trainers from outside to work on process issues and organizational development.

Conflicts Of Interest For Board Members

Development activity presents opportunities for conflict of interest that are not as present in issue-oriented neighborhood organizing. Board members who need jobs, housing and other benefits are faced with serious ethical choices as their groups produce and divide up tangible gains. Whose house is to be rehabbed? Who is to get the jobs? Why shouldn't those who have worked hardest and who have serious needs get these benefits?

Unfortunately, the shortest route to self-destruction for a development organization is for the leadership to ignore rules of ethical behavior. If they do so, they lose all ability to hold their staff and others accountable and eventually threaten the legitimacy of the organization in everyone's eyes.

Dealing effectively with such issues usually requires, first, that the organization make its rules explicit. The board must develop a code to govern conflict of interest situations. The goal is to establish, as a routine expectation, accountability of individual members to the board as a whole. When the leadership is routinely expected to disclose any personal interest in a decision and to abstain from participating in board deliberations and voting, as appropriate, the rules tend to become depersonalized. If they apply to everyone consistently, and the board routinely identifies potential conflicts and reiterates its code, then board members can be kept accountable with less sense of personal attack or being put on the spot. Formal training can be very helpful to a board in dealing with this sensitive but crucial issue.

Differences Between Organizers And Development Professionals

In general there are identifiable differences between the training, outlook, skills and motivation of people who identify themselves as community organizers and those who have come to be identified as neighborhood development professionals. The first group includes individuals of varied backgrounds, many of whom have trained at one of the institutes for organizers established around the country and have then refined their skills on the job with community organizations. While many develop substantial technical understanding of issues confronting neighborhoods, their focus tends to be on process issues, on organization building, on leadership development and, above all, on power and empowerment. Frequently they understand substantive questions of neighborhood improvement in strategic terms -- that is, how such questions will serve as issues around which people can be mobilized or the organization can be built.

Perhaps because organizing is fundamentally oppositional in character, because it is stressful work requiring long hours and dedication and because organizers often feel that they are fighting an uphill battle with minimal support, a strong professional culture has developed. This culture provides rules of thumb and practical guidance for individuals working in extremely open-ended and fluid environments, as well as a network of mutual support and assistance which is needed in this frequently lonely field. As a result, organizers tend to have developed a strong group identity and a special pride which sometimes interfere when they must collaborate with other professionals operating on different assumptions and coming from different professional cultures.

Development professionals may have a less clear feeling of group identity but usually will have more traditional credentials. People who work in this area are drawn from a number of fields, including urban planning, business, social work and public administration. Some have backgrounds in contracting or real estate, finance or insurance. In contrast to the organizers, their emphasis will tend to be more technical, more oriented toward execution of the specific steps in the development program, rather than to the fundamental issues of power or to the organizational implications of decisions or actions. Because their projects often cannot move quickly -- they require planning, financing, partnership agreements, official clearances, etc. -- they often find it difficult to be flexible and open to new demands for fast responses to the immediate community priorities that emerge from organizing and leadership demands. Development specialists often feel or are trained to believe that the kind of work they do requires a somewhat more structured, less consensus-oriented, decision-making process. Their relatively high level of formal training may cause them to look down on organizers and undervalue their skills.

Some difference in outlook and style between these two groups is a fairly common, though not universal, source of problems for community organizations. Most groups which feel they have successfully managed the problem have appointed an organizer, or someone with an organizer's outlook, as director of the development activity or of the development corporation, where it is a separate entity. They judge that this insures that the director can understand the needs and concerns of the citizens' organization and will be able to "speak the language."

Many who report this as a successful strategy, however, refer to development corporations that are no more than a year or perhaps two years old. Some observers wonder about the longer term, as the development group establishes its own history and its own allegiances. They propose continuing efforts to bridge the gap. One is a conscious effort to train and orient new development staff, emphasizing particularly the history and background of citizen action in the area and the goals of the parent group. A second approach is to find regular ways to bring the staffs and leadership of the organizations together around mutual concerns and process issues, so they have an opportunity to discuss problems and try to work them through.

Where development is incorporated as part of a single organization, it is always helpful for the boards of directors to delineate clearly, in advance, the roles and jurisdictions of the two staffs. The same kind of advance planning is recommended where there are separate organizations with structural links. Some observers maintain that it is ultimately a matter of personality, and that much depends on whether the directors of the two organizations get along, regardless of their backgrounds or orientation. Much also depends upon the extent to which the leaders of the boards of the two groups stay directly involved in trying to keep the relationships on track, reminding the staff of the community's goals and concerns.

One clear source of strain is salary differentials between the organizing staff and the development staff. For various historic and traditional reasons, most organizers are grossly underpaid. Many organizers some pride in this fact, but they will resent having it rubbed in when they see others working in the same district, keeping better hours and getting paid substantially more. Individuals with professional or technical credentials can simply secure more in the outside market, and this determines the going rate for all but the most dedicated. Some technical assistance groups report that a lot of organizers can make their peace and live with this, especially if there are two organizations rather than one. A more obvious, if difficult, solution is to work toward equalization of salary scales, with organizers getting long overdue substantial increases. (This may have a very beneficial side effect -- reducing turnover among organizers.) The Northwest Bronx Community Clergy Coalition in New York has had some success in moving in this direction, primarily through aggressive fundraising.

Maintaining Community Support For Development

Community groups which have been through a first round of development report some problems in fulfilling the community's expectations. The organization's members and other neighborhood residents may be accustomed to the quicker results that follow a protest action: even if a grievance is not resolved immediately, there are visible signs of work on the issue. Development takes a lot longer, particularly when an organization is starting out, feeling its way, with nothing yet in the pipeline. Board and staff need to help membership develop realistic expectations and keep them informed so that a lack of visible progress is not taken as a sign that nothing is happening. One technique is to celebrate each important step in the development process as a milestone: optioning or acquiring land, presenting architectural plans, getting loan approval, etc.

A second potential problem can be maintaining legitimacy as an "agent of the community," since a development corporation can be seen as being "in business for itself." A community group which has been organizing tenants in a problem building is seen as a disinterested benefactor. But that same group of people embarking on a development project may be suspect -- it could be perceived as a stalking-horse for a corporation that is interested in capturing the building for itself. Typically, the answer lies in communicating the development organization's purposes and identifying the ways in which it is different from the typical property owner or public agency.

A third kind of constituent disaffection may be the toughest to deal with. A development organization may find itself accused of blockbusting, displacement or other harmful effects, as a Cleveland CDC was when many of the houses it rehabilitated were purchased by blacks. The group met with neighborhood residents, explained its program and continually reassured them that its goal was an integrated and sound neighborhood, not simply rehabilitated houses. The storm abated, and the group found that while it was delayed and had to spend valuable time able to proceed more effectively.

Looking To Development Activity For Financial Support

A reminder: the possibilities of self-sufficiency through development have been oversold. By and large, community organizations which have set up development entices must continue to find ways to support their own operations, independent of development revenues. Indeed, they may feel ultimately that they are competing with development activities, looking to the same sources for core support. It is clear that considerable thought needs to be given to this issue before an organization goes into development or spins off a separate development entity, and that organizations should adopt policies to minimize this potential conflict.

At the same time, it appears that more can be done to build in elements of mutual support. The example of Union-Miles' contracting for community organizing from its parent organization is a good illustration of advance planning which benefits both groups. This kind of link makes good organizational and financial sense. There is a need to invent other realistic ways in which development can help finance organizing.


Self-help community development faces two equally serious dangers -- that it will either be oversold because of its potential benefits, or that it will be prematurely abandoned because of the problems attached to it.

This handbook has highlighted some of the difficulties and has cautioned against seeing community-directed development as a panacea or replacement for continued community organizing or education. This in no way should be interpreted as disparaging the importance of development as part of a strategy for pursuing neighborhood revitalization and greater social justice. Self-help development programs deliver concrete benefits, produce results much more consistent with residents' interests than other approaches to development and provide a means for important community organizations to survive during a time when it is particularly hard to find support for pure organizing and advocacy activities. Finally, development is an important new element in the broad civil rights, community and neighborhood movement, which has been growing in strength and sophistication over the last three decades.


Another Cleveland Community Group: The Buckeye-Woodland Organization


The Buckeye-Woodland Community Congress, which dates from 1973, is the oldest of Cleveland's Alinsky-style community organizations. It is the granddaddy of the city's vital constellation of community organizations and a model for many that have been organized more recently. The organization emerged as an expression of concern about rapid racial change in the district and the Church's concern about erosion of its parishes. It was very heavily supported by the Catholic Commission on Community Action and its offshoot, the Ohio Training Center. In its early days it built, in classic style, on local street issues, organizing block clubs and "civics."

Buckeye-Woodland is a predominantly minority area, in the same general part of Cleveland as Union-Miles. Unlike Union-Miles, however, the area has a mix of white, Eastern European ethnic residents; nevertheless, minorities comprise at least three-quarters of the population. While Buckeye-Woodland has a modest shopping strip, it is predominantly a one- and two-family-home residential district, consisting of about 38,O00 residents in eight-and-a-half square miles.

Buckeye-Woodland has had various connections with development activity for some time, but up until 1981 the organization had no direct role in development activity.

The Design Of Two Separate Development Organizations

Buckeye's direct entry into development work grew out of its leadership role in a successful campaign to secure Community Development Block Grant funding for neighborhood housing rehabilitation. In 1981, following a struggle with banks on community reinvestment issues, Buckeye secured the commitment of four banks to capitalize a community development corporation. The result is a complex of organizations that is collectively referred to as Bank on Buckeye (BOB). BOB is the most complex and, in some ways, the most ingenious approach to neighborhood development to be found across the country. One thought behind the complex structure was to prevent development from diverting the community organization's leaders from their multi-issue agenda.

The Buckeye-Woodland Community Development Corporation (CDC) is a for-profit development organization capitalized by a consortium of four commercial banks. (It is the first and only development corporation to involve more than one bank, and it required the resolution of some very complex regulatory tangles before it could incorporate.) Thus, the CDC is nominally a creature of the four bank partners. However, the composition of the CDC's board favors ultimate control by the community. Six of the CDC's 13 board members are Buckeye-Woodland residents, and six are nominated by the banks. The swing member must be a city government representative works or lives in the area. From the start, this member has been the local ward councilman. Because the community feels that it has the councilman's allegiance, it is confident that in a showdown it would have the controlling vote.

The CDC's director and single full-time staff member is an individual with experience in construction and real estate, while bank personnel provide a number of in-kind services and technical support. (Prior to hiring an executive director in 1982, the organization was staffed by a bank vice president on part-time loan.) The CDC is general contractor for the housing which, to date, has been its major development activity. The work has included both rehabilitation and new construction, for which the CDC can charge an overhead fee.

Parallel to the CDC is a second organization, The Buckeye Evaluation and Technical Institute (BETI), which is entirely a creature of the Community Congress. Of its 11 board members, 10 are elected from the general membership of the Buckeye-Woodland CRA Committee. The eleventh member is BETI's executive director, who formerly was the Congress' lead organizer.

BETI is a non-profit organization which performs most of the actual development work. In many ways it serves as staff for the CDC, and little internal distinction is made between the two organizations -- they share the same office, answer the same phone and work hand-in-glove -- except on those formal occasions when emphasizing the distinction becomes important.

This elaborate organizational structure is a result of the community's concern with protecting the Congress. Nominal responsibility for the development arm lies with the banks, freeing Buckeye-Woodland from blame for any shortcomings and allowing it to criticize the development arm if necessary. Further, the Community Congress does not partake of any of the profits that the CDC may generate; thus, it will not be "tainted."

Development Accomplishments

The CDC has rehabbed and resold (for $30,000-$38,000) 16 houses in the five-block target area that is the initial focus of Buckeye-Woodland's development activity. This is an intermediate area, not as devastated as Lower Buckeye, but not as intact as the Upper Buckeye area already served by the NHS program. The Development Corporation is just now completing the first of six new homes it plans to build on vacant sites.

Meanwhile, BETI itself has undertaken a whole range of development-related activities:

  • The free paint program completed exterior painting of some 200 homes in 1982 and 1983. BETI estimates that the number will be 250 in 1984.

  • BETI's solar and weatherization program completed eight units in 1982 and 24 in 1983 and estimates 30 in 1984. Utility bills have been halved in some of the completed projects.

  • BETI also does free energy audits, preparing specifications and then, for the required energy work, plugging homeowners into one of five loan and grant programs funded by the city, the state, foundations and the oil industry. BETI expects to do 1,000 audits in 1984.

  • BETI has recently organized a gardening program and a food buying club; the latter is designed to provide significant savings.

  • BETI is also involved in employment. In the summer of 1983, it employed 22 young people to paint houses and landscape mini-parks on vacant parcels where houses have been demolished. Thirteen of the youths were subsequently placed in full-time jobs. BETI ran a new employment program in 1984, focused on 16- to 25-year olds.

BETI's program and the CDC's accomplishments, like those of the Union-Miles Development Corporation, have earned them respect around town as serious operations. BETI's staff say that they are getting much more than token participation from the banks, and that the three-part structure has effectively insulated BOB's separate parts. While some individuals have a role in each of the three organizations, they are able to wear these different hats successfully and separately.

Problems Of Maintaining A Community Organization

There are clear parallels in the experience of Buckeye-Woodland and Union-Miles. Like Union-Miles, the Buckeye-Woodland Community Congress has had difficulty raising funds as its two development-oriented entities have begun to prosper. Again, the easy explanation is that somehow development is to blame. But closer examination indicates that there is no such direct relationship. Indeed, activists within the Community Coalition feel that blaming development is simply a way of avoiding a larger problem: that money for advocacy has dried up.

Those directly involved in fundraising agree that foundations, and to some extent private corporations, have funded development corporations around Cleveland, rather than community organizing. They do not believe, however, that if there were no development corporations the congresses would be getting more money. In general, all of them are victims of the philanthropic rule that congresses get funded in their formative years and are then gradually cut off. In fact, there is some conviction among Cleveland activists that to survive, the congresses have no choice but to blend in some business-type approaches and activities with their other work.

As with Union-Miles, the Buckeye-Woodland CDC's success has, in part, sustained the Community Congress during a difficult period. Furthermore, the development staff and those most concerned with the physical revitalization of the community make the same observation here as in Union-Miles: they need the Congress to back them up, to give them clout as a constituent based organization -- not just another development entity -- and to deal with the large number of neighborhood issues which development does not address.

A good example is the way the Congress complements BETI's program of weatherization, passive solar installations and energy audits. BETI sees itself as helping to reduce energy costs for individual households through conservation. But it also recognizes that the larger problem is the utility rate structure, deregulation and the fundamental definition of the social duties and responsibilities of a public utility. In this arena, only the Congress can ultimately act effectively and deal with energy costs in political and institutional terms, rather than in terms of individualized conservation efforts.

Some Overall Conclusions From The Cleveland Cases

The course of events in Cleveland seems to demonstrate clearly the necessity of adaptation on the part of grassroots organizations. The evidence is overwhelming that the environment in which the organizations operate has changed, and that new pressures and opportunities have emerged. It is clear that groups like Union-Miles and Buckeye-Woodland can only partly control this environment, and that they must adapt to these changes. To do otherwise would be suicidal, although the organizations might seem -- temporarily -- to be maintaining their principles.

One of these adaptations is to respond to internal pressures for neighborhood-controlled development and physical improvement. Another is to look increasingly to development as a way of sustaining the community organization, without necessarily giving up all other goals and activities.

The Cleveland groups demonstrate several possible approaches. Given the fact that human organizations must adapt to survive, the difficult question is what constitutes necessary, creative adaptation and what constitutes capitulation to pressures and requirements that can, in fact, be successfully resisted. This dilemma requires a fine balancing act by neighborhood organizations. One thing is clear: there is a continuing need for both types of organizations -- those that engage in development and those that advocate.


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Center for Community Change
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