SUMMER 2004

Loan Pools May Be Answer
to Meeting CRA Mandate

Rural Communities Look
for Entrepreneurial Spirit

New Yardstick Measures
Memphis CDCs

Brochure on Home Loans
Translated into Spanish

And the Survey Says:
Readers Value Bridges

July Forums to Focus
on Entrepreneurship

Save the Dates

Have You Heard

Spanning the Region

Calendar

Resources

A Closer Look
This issue of Bridges includes a supplement for readers in the Kentuckiana region. The inaugural publication of A Closer Look focuses on the growing Latino population in Kentucky and the market opportunities it represents for financial institutions.

New Yardstick Measures Memphis CDCs

By Ellen Eubank
Community Affairs Manager

Accountants have the CPA exam. Doctors must pass their boards. And even beauticians get licensed. Most professions develop standardized practices and procedures and have certification processes to measure the abilities of organizations and individuals. The community development industry is no different. While informal evaluation mechanisms have been in place, more formal evaluation procedures are now being developed.

In Memphis, area community development corporations (CDCs) can undergo a new voluntary certification process. The Memphis Community Development Council, whose goal is to help CDCs build strong, effective organizations while revitalizing Memphis neighborhoods, has spearheaded the development and implementation of the Memphis CDC Certification Process.

Emily Trenholm, executive director of the Memphis council, noted there were “no industry standards for CDCs in Memphis. Anyone can form a CDC, get their 501(c)3 status and get started.”

The Memphis Community Development Partnership, a funding and technical assistance intermediary for area CDCs, had developed an evaluation tool that was not well-received by CDCs. When the partnership heard about a tool its sister organization in Atlanta had developed, it shared the information with the Memphis Community Development Council. A computerized capacity assessment tool, it was used by the Atlanta Neighborhood Development Partnership to measure changes in capacity for the organizations it funds.

The Memphis council received permission to customize the tool for its city. It became the first step and cornerstone for the Memphis CDC Certification Process. With funding from the Memphis Community Development Partnership and the United Way Venture Fund, the community development council worked with both the partnership and the Memphis Division of Housing and Community Development to flesh out the entire process. The council and its member organizations continue to play a lead role in guiding this process, giving the CDCs ownership of the evaluation procedures now in use.

The assessment tool consists of a computerized questionnaire that measures organizational capacity in four areas: organizational development; business and financial structure; housing development and management; and community outreach.

There are six to 10 questions in each of the four areas. Under organizational development, questions focus on structure, planning and board makeup. Questions on business and financial structure include budgets, office procedures and internal legal processes. Community outreach questions ask about ways the community is engaged, including meetings and newsletters. And housing development questions deal with specific housing projects and the procedures used.

In each of these areas, a capacity level is assigned based on answers to a series of questions. The capacity levels are “formative,” “emerging,” “producing” and “mature.” CDCs whose scores in the four areas average at least a two, or “emerging,” can move onto the second step in the certification process.

The CDC undergoing assessment receives a formal report that specifies its capacity level in the four areas. The report recommends specific technical assistance and training that the CDC needs to improve its capacity. The information helps the CDC “see where they are on the continuum and what they need to do to move up in capacity,” Trenholm said.

In the next step, the community development council staff verifies the information the CDC provided on the questionnaire. The council reviews financial statements, budgets, board meeting minutes, strategic plans, and other documentation and evidence of community outreach work. Then a certification committee consisting of the community development council, the community development partnership and the city of Memphis reviews results of the verification process and approves certification of the CDC.

The questionnaire takes one to two hours to complete, with verification taking several hours. So far, 10 of the 30 Memphis Community Development Council member organizations have been certified.

CDCs going through the certification process receive information on specific programs and resources they can use to meet their needs. “Some boards that are more grassroots might not know what is needed to be an effective CDC, including policies and procedures,” Trenholm said. “This gives them very specific suggestions for improvement.”

The community development council also benefits from the assessment. The group can aggregate the data and use it to plan training workshops and other programs.

Trenholm also sees this process as valuable for funders. CDCs can take their assessment information to funders to show their credibility and to make a case for funding specific training needs. “We do have some CDCs that don’t have all the pieces they need to be successful,” she said. “This tool gives everyone involved standardized information that provides a framework for assessing where a CDC is and what they need.”

One faith-based CDC that successfully completed the certification process is The Works, which operates in South Memphis. Kathy Cowan, executive director, described the process as “painless.” The assessment was informative because the CDC not only learned what it needed to improve, it also learned what it was doing right, Cowan said. “In some instances, we were doing better than we thought,” she said.

Cowan believes other non-profits could benefit from the assessment. “If you are interested in improving, you have to do some sort of self-evaluation,” she said. “I don’t see how you can get better without looking at where you are.”

Trenholm said the certification process is the critical first step in implementing industry standards and setting the bar for Memphis community development efforts.

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