| Follow Us: Facebook Twitter RSS Feed


Working to connect low-income communities to development capital

Gregory Heller

In 10 years of working in community development in Philadelphia, Gregory Heller saw first-hand the pronounced chasm between residents working to rebuild their communities and the people with the resources to invest in those neighborhoods.
"I didn't feel those two worlds were connecting," explains Heller. "I saw that there are people with big money out there, but it’s not connecting to these communities. So how do we change that value proposition?"
The goal of American Communities Trust (ACT) -- a national community development partner based in Baltimore and Philadelphia -- is to bridge that gap, building social impact in urban and low-income areas across the country. As CEO, Heller (who you might remember as the biographer of local planning icon Ed Bacon) works with private sector clients such as Capital One and Wexford Science & Technology that are investing in low-income communities. He connects these companies with place-based nonprofits and community development corporations (CDCs) to help plan, finance and build impactful projects.
"Working in community development, I learned that the most important projects in our society are built by the people least equipped, least capitalized, and least experienced to carry them out, and that's a problem," he says. "The money people need assistance in terms of strategies to use that capital -- the clients we're working with are really looking for ways to spend their investments more wisely."
Social impact development projects tend to go something like this: A nonprofit organization or CDC sees a development need. In order to pursue this project, they must piece together funding from a variety of sources, which might include foundation and government grants, tax credits, and whatever loans they are able to secure. All of these funding sources must be coordinated -- a complicated, time-consuming, daunting process.
In short, every social impact development project is the result of years of cobbling together capital, working within the same system -- and with the same expectations -- as private, profit-based development. This is a system that, Heller says, simply does not work.
"We're treating nonprofit development and socially-minded for-profit development the same way as profit-motivated luxury condo developments," he explains. "The competitive world of real estate development doesn't make sense if you're trying to build a community-centered project. We really need to change the whole system and turn it on its head for impact development. We need to create a parallel structure that's collaborative rather than competitive. What if we got a whole bunch of partners and funders around the table who could make decisions together and find a way to empower these projects?"  
ACT's mission is to be the host of that gathering, and to act as a guide in rough terrain.
"We have these great tools for investing money into low-income neighborhoods -- New Markets Tax Credits, the Community Reinvestment Act -- and these programs are great, but they are uncoordinated," argues Heller. "Sometimes they directly conflict with each other. You run into federal subsidies that are difficult if not impossible to layer with each other. You want all of these public programs and private dollars to work together, and you also have the philanthropic community."
Without philanthropic support, he says, putting together funding for these projects becomes almost impossible.
"If grants aren't available, then nonprofits have to finance with debt," he says. "That puts them in serious jeopardy if they can't service their debt on the back end. So the question becomes, how can all these different sectors get together and collaborate around creative financing strategies and layered capital approaches? We need to bring the public, private and philanthropic sectors together to talk about what kind of tools we need."
In addition to facilitating relationships between the for-profit and nonprofit development communities, ACT acts as a liaison to the residents and local stakeholders impacted by these projects. The organization has a staff of community development professionals conducting market studies, and working with existing place-based organizations to analyze what has been done and where the gaps are.

"We really believe in the value of qualitative information gathering," says Heller. "We conduct focus groups and interviews to assess whether this money is really going to the right things."
This is, he says, the "non-financial return on investment."
"The big catch phrase is 'impact development,'" he explains. "We're building things on the ground, but how do you make sure those projects are impactful for the community in which they're located -- that it's not just a building, but that it's delivering value for residents?"
If for example a project creates 300 jobs, but they all require a certain level of education, can ACT facilitate workforce training and credentialing programs to give the community access to those jobs?
Heller sees ACT's methods as a reaction to the "top-down" planning approaches of the urban renewal era, which often targeted and displaced vulnerable residents.
"Since that time we've had this understanding that the top-down [method] isn't the right one, but we still see cities and states taking that approach instead of building community capacity," he says. "It seems to me that if we really want to rebuild a severely divested community, the first thing to do is invest in the neighborhood social infrastructure. [That way] the people and organizations already there can take the lead in figuring out what the community wants and how to get it there. Otherwise we're making the same mistakes that were made during urban renewal."
According to Heller, neighborhood organizations tend to excel at small-scale interventions and tactical urbanism -- lacking tens of millions of dollars to invest in large-scale development, they instead focus on building playgrounds or turning vacant lots into community gardens. Those projects have tremendous value, but can these communities also be empowered to tackle major capital investments?
"The solution to so many problems is investing in and empowering disenfranchised communities," adds Heller. They need access to "major resources so they have the ability to really shape their communities in meaningful ways." 

This profile was originally published by Urban Innovation Exchange in partnership with Meeting of the Minds and Kresge Foundation. For more stories of people changing cities, visit UIXCities.com and follow @UIXCities.
Signup for Email Alerts
Signup for Email Alerts