In December 2016, a report prepared by Rapoza Associates, a Washington DC based government relations firm, took a look at federal Community Economic Development (CED) grants. An analysis of both survey data and federal government reporting points to the success of federal CED grants, which are administered by the Department of Health and Human Services (HHS) and the local Community Development Corporations that work with this program.
The firm surveyed 52 local community development corporations that had recently received CED grants. These organizations received some $35 million in grant funds and with that leveraged over $280 million (including almost $100 million from private financial institutions) in financing from other sources, financing 45 businesses, creating 3,200 jobs at a cost to the federal government of $8,900 per job.
CDCs use CED to funds to provide technical and financial assistance to business that agree to create jobs for people with incomes up to 125 percent of the poverty level. The type or uses of the funds include financing of industrial and commercial facilities, child and health care centers, small business loan funds, and grocery store and healthy food facilities located in federal designated food deserts.
Rapoza Associates’ also filed a Freedom of Information Act (FOIA) request for reports by CDCs that are grantees of the Community Economic Development program. The firm analyzed HHS data from 168 reported projects by 123 CDCs for 2014 and 2015. The projects spanned 38 states, Puerto Rico, and the District of Columbia.
The 123 CDCs received an average grant of $700,000 per project financed for a total of $11.7 million. These CDCs report to OCS that this amount leveraged over $787.5 million financing sources for CED projects. For every dollar in federal CED funds, CDCs leveraged $7 in other financing. This leverage total was able to create 871 new businesses, as well as help 602 existing businesses expand, for a total of nearly 1,500 businesses in the two year period.
As stated above, the mission of the CED program is to provide jobs to low-income individuals and to revitalize low-income communities. In 2014 and 2015, the grant recipients of the CED program created 6,997 full-time equivalent jobs, including 2,504 part-time jobs, and 5,745 full-time jobs.
For more examples of CDC’s work in low-income communities, be sure to read the 2014 Stories of Community Impact report.
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