Community Development: Investing in People, Investing in Place

Energy, resources and ongoing commitment are all required to maintain a healthy, thriving community. The term "community investment" might refer to an investment of peoples' time, labor and expertise (sweat equity), or it might refer to a financial commitment. Both are absolutely necessary elements of a robust and sustainable community.

Developing and investing in community is difficult to accomplish if a city or county's priority is to invest it's resources in attracting non-local companies (ostensibly with the hope of generating a few jobs, usually at low wages) instead of in local enterprises. It is also difficult to accomplish when some of a community's hardest working but lowest earning citizens are denied access to reasonably-priced capital, and are forced to rely on predatory lenders.

A number of localities have established Community Development Credit Unions (CDCUs) as a means of providing access to financial resources, support and advocacy, to low-and moderate-income members of their communities. These community institutions are cooperatively owned by their members and governance is shared. CDCUs foster financial independence by providing reasonably-priced loans, safe places to save and financial education and counseling. Many CDCUs also develop partnerships with local businesses and the private sector in order to help revitalize impoverished areas of a community.

And where does the capital for community investment come from? In most cases, the community! Deposit accounts are obtained from local investors or the pooled resources of a community group. These funds are then used to provide small business and emergency loans to lower-income community members.

Although there are not yet nearly enough CDCUs in the U.S., there are many fine models demonstrating this elegant concept and how well it can work to build stronger communities. For more information try typing "Community Development Credit Unions" into Google or visit http://www.natfed.org/ (The National Federation of Community Development Credit Unions).

Happy Friday!