Introduction
Community Affairs at the Federal Reserve Bank of St. Louis
The Community Affairs Office of the Federal Reserve Bank of St. Louis is pleased to provide Community Development Financing: Coming up with the Money, a self-study guide for people with little or no experience in community development. "Community development finance" is a term often used to define projects that help low- and moderate-income individuals and small businesses.
Coming up with the money for such projects typically requires a partnership of private and public funding sources. Funds from banks, government agencies and others often can be combined successfully to develop housing for low- and moderate-income individuals and to fund small businesses. To form a public/private partnership, staff from community organizations, financial institutions, government agencies and other interested parties come together to discuss what each requires for the community development process to work.
Community development consists of three important elements: people, process and money. We will discuss partnerships in Unit I of this guide, explore the business planning process in Unit II and show you different ways of coming up with the money in Unit III. We hope you'll find this self-study guide helpful and will use it in your community development work.
The Fed's Community Affairs staff is dedicated to promoting community and economic development and fair and equal access to credit. We work to strengthen the effectiveness of community development practitioners by promoting collaboration and good financial decision-making. Please contact one of the Community Affairs contacts listed below for additional information.
Glenda J. Wilson
Community Affairs Officer
Community Affairs Contacts
St. Louis (toll-free at 1-800-333-0810)
Matthew W. Ashby,
(314) 444-8891
Diana
Zahner, (314) 444-8761
Little Rock Branch (1-800-482-9463)
Lyn Haralson,
(501) 324-8240
Louisville Branch (1-800-626-4507)
Faith Weekly,
(502) 568-9216
Memphis Branch (1-800-238-5293)
Ellen Eubank,
(901) 579-2421
Toll-free numbers can be used only within the Eighth District, which encompasses all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.
Goals of This Study Guide
To start you on the path to being a leader in community development.
We will show you the difference between soliciting donations and putting together a package of financing, which might include loans and investments, as well as outright grants and contributions in time and materials. We will also get you thinking about how money moves in your community and about leveraging what you have in order to do more than you think is possible. Those who've done this work for years will be encouraged to get out from behind their desks and look at the challenges in different ways.
To help you understand your community's needs and abilities.
Is your community's top need a neighborhood park or apartments for the elderly? How about downtown revitalization or decent-paying jobs? We will help you figure out your community's priorities and whether you have a realistic chance of fulfilling them using community development finance.
To help you understand market forces that could buoy or sink your project.
Knowledge of such things as business cycles and the law of supply and demand can help ensure success for your project. You don't want to open a grocery store in a neighborhood that's still years away from being repopulated. Nor do you want to build a youth center when only adults think it's a great idea.
To identify and develop strategies.
You'll probably have to develop partnerships and alliances for your project to succeed. Find out what makes for a good or bad partner. Be careful that you don't duplicate others' efforts. Be aware, too, that no matter how good your intentions are, there might be some people who will work against you. Know your detractors and how to deal with them.
Let's start.
