CDAC Spotlight
Communities and Capital: A Foundation for Success

August 23, 2017
By  Deborah Temple

Over the last three years, Communities Unlimited (CU) has forged new approaches to community economic development that are built on the passion and decades of experience within Community Resource Group—a nonprofit that helped rural communities solve water and wastewater problems—and alt.Consulting—a nonprofit that provided on-site training and management assistance to small businesses. These two nonprofits and community development financial institutions (CDFIs) merged in October 2014 to create an integrated service delivery model for rural communities in the South to address infrastructure needs, drive economic development through entrepreneurship, and support community leadership teams implementing development plans.

CU’s mission is to move communities in areas of persistent poverty toward sustainable prosperity. In a seven-state target market from Texas to Tennessee that includes 45 percent of the persistent poverty counties in the United States, this is a bold mission that drives CU’s work every day.

Persistent Poverty Communities

Persistent Poverty Communities

According to the latest U.S. Census Bureau data, CU’s target market contains 45 percent of the persistent poverty counties in the nation.

SOURCE: USDA, Economic Research Service; data from U.S. Census Bureau

Communities Unlimited—Our CDFI

It is easy to see differences between an organization working with water and wastewater systems and another working with small businesses. Instead, our leaders saw opportunities. One of the biggest surprises of the merger was the similar history and approach of the two CDFIs. Both organizations got their start by offering on-site technical assistance and training, and both decided to begin making loans when their target market could not access the needed capital to ensure safe drinking water or to grow small businesses. Both organizations worked to solve concrete problems, both believed in expanding resources for at-risk communities and both were passionate about their mission.

Growing the newly combined CDFI is one strategy for deepening CU’s impact in communities, in part because of our collaboration with many lenders across our target market and the expertise they share. Bankers comprise the majority of our commercial loan committee and they provide invaluable guidance and feedback to help us manage risk while making the difficult loans—from the startup loan to an entrepreneur attempting to lift a family out of poverty to the emergency loan needed by a rural town to continue to provide safe drinking water to its citizens after a flood washed out the waterlines.

The unique value that CU provides is our deep connection to the borrower through technical assistance. Our team works with the business and/or community to clearly understand their financing need, cash flow, pricing and accounting to ensure they can repay their loan through profits. These relationships allow CU to take more risk and fill gaps by making multiple loans that grow with the client over time and by leveraging larger loans through our network of lending partners in the region.

Using this model, CU works closely with existing and new partners serving our target market. These partnerships support our CDFI work and include program-related investments (PRIs) from foundations like the Mary Reynolds Babcock Foundation, the Winthrop Rockefeller Foundation and the Arkansas Community Foundation, which made its first PRI to benefit CU’s loan fund. These investments work in concert with loans from financial institutions like Bank of America, Wells Fargo and Arvest. With these funds, CU has made loans ranging from $2,500 to $450,000. Examples include:

  • $45,000 to a small heating and air conditioning business that increased sales, leading to three new jobs in a rural town;
  • $152,000 to build infrastructure to connect 11 rural households with problem wells to the city of Fayetteville’s water system; and
  • $32,000 to a multistakeholder cooperative in the Arkansas Delta to expand a biodiesel business in a very rural farming town.

Among other projects, Communities Unlimited has provided loans to build infrastructure and to expand a biodiesel business in a rural farming town.

Communities Unlimited—Our Work

At the heart of our work is the vision of vibrant, thriving communities and neighborhoods in which all individuals can sustain their livelihoods, enjoy a good quality of life and build wealth. CU supports this work through an integrated service delivery model that targets three mission areas:

  • Community Sustainability—Strategic business and community development strategies
  • Entrepreneurship—Helping small businesses grow, sustain and create jobs
  • Environment—Clean and safe drinking water and sanitary wastewater disposal for communities

Tools and services (e.g., loans through our CDFI), together with technical assistance to communities and businesses, training and GIS mapping are integrated to provide deeply impactful assistance to enable sustainable growth.

For more information about our work, please visit

Bridges is a regular review of regional community and economic development issues. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.

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