Failures, downsizings, and mergers among community development corporations

Abstract

Over the past 30 years, community development corporations (CDCs) have become increasingly important actors in low‐ and moderate‐income communities. One prominent view of CDCs is that they have experienced uninterrupted growth since the 1970s. Despite their growth and productivity, however, many are facing serious challenges to their continued viability. When confronted by such challenges, CDCs are likely to respond in one of three ways: go out of business, downsize, or merge with one or more other groups. The major goal of this research was to assess the causes of these failures, downsizings, and mergers.

First, we found that these changes do not appear to be isolated instances; rather, they are prevalent across the country. Second, we identified a number of contextual and organizational factors leading to CDC failures, downsizings, and mergers. Finally we suggest a series of actions CDCs, support communities, and policy makers can take in response.

Keywords:

• Community development corporations
• Nonprofit organizations
• Urban policy