Fighting Concentrated Poverty: Nonprofits and Their Networks of Support

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A recent study of concentrated poverty in the U.S., released by the Brookings Institution just this past week, underscores a point: the nonprofit sector and the infrastructure that support it are crucial delivery mechanisms for fighting concentrated poverty and social inequity—and the sources of the most effective policy and program models for state and federal policy-makers to emulate and fund. An increasingly “sector agnostic” philanthropy, as one foundation executive recently put it, ought to listen and put its resources behind the creative, committed nonprofits fighting poverty and the infrastructure organizations behind them.

The Metropolitan Policy Program at Brookings in conjunction with the Community Affairs Offices of the Federal Reserve System studied 16 communities of “concentrated poverty”—“the tendency, in many corners of the United States, for poor populations to be clustered into very poor communities.” Included as case studies were urban communities such as Little Haiti in Miami, the Central neighborhood in Cleveland, and Milwaukee’s Northwest neighborhood, and rural areas such as Martin County, Kentucky, the Blackfeet Reservation in Montana, and Holmes County, Mississippi.

It is not hard to guess that the generic strategic recommendations in the report call for “improving the neighborhood” (place-based housing and economic development efforts), “expanding opportunity” (linking residents to quality jobs and housing in their regions), and “transforming the neighborhood” (incorporating a socio-economic mix in otherwise desperately and sometimes homogeneously poor communities). The authors call for improvements in schools, housing, employment, and investment—and a terse commentary on “building the capacity of local actors”.

While part of that capacity question addresses the inadequacies in the local governments in these communities, part also implies the necessity of bolstering the nonprofit sector. Why? Two big and compelling reasons:

  • Without a healthy, vigorous, powerful nonprofit sector, disadvantaged and all too frequently disenfranchised residents have little or no advocacy voice about the issues and conditions that they face.
  • Without a nonprofit sector on the ground in these communities, the mechanisms for getting resources placed adequately and accurately to address the challenges of concentrated poverty are simply insufficient.

The subtext of these shortfalls is also twofold: where the nonprofit sector is not paying attention to issues of concentrated poverty and socio-economic deprivation, the prospects for a powerful nonprofit sector are slim; and although foundation grantmaking is only 12% of all charitable giving in the U.S. (and a much small percentage of nonprofit revenues), there is no question that building the capacity of the nonprofit sector to combat concentrated poverty requires a commitment from the overseers of America’s concentrated wealth in tax exempt foundations.

This is why a nonprofit infrastructure is needed, but there is more to the story. Although the authors of this report suggested that these areas of concentrated poverty were characterized by a generally weak and dispirited nonprofit sector, in some of these communities, the vigor of the nonprofit sector combating these conditions was evident—and if it weren’t for the actions of the nonprofits, the dedication of community organizers, and the support from infrastructure organizations, what little progress is being made against these conditions would be so much less:

  • In West Fresno, a community development corporation was obviously instrumental in the creation of a neighborhood shopping center, built contrary to the advice of “experts” who said that the neighborhood could not support new retail services.
  • The report seems to underplay the longstanding accomplishments of the Little Haiti Housing Association in Miami’s Little Haiti neighborhood, though it acknowledges the impressive work of Catholic Charities and various community centers serving the population.
  • The report makes note of the passage of a $5 million bond to finance a comprehensive community revitalization plan for the West Greenville neighborhood, but such plans do not emerge sui generis, but from the organizing of various church and nonprofit efforts in the community.
  • In the combined Old Hill, Six Corners, and South End neighborhoods of Springfield, Massachusetts, a collaboration of Springfield Neighborhood Housing Services, the Hampden Hampshire Housing Partnership, and Habitat for Humanity have joined forces to create housing for first-time homebuyers.
  • In Holmes County, Mississippi, the West Holmes Community Development Corporation is carrying out a remarkable program integrating sustainable agriculture, youth employment, skills development, and health and nutrition issues – an impressive display of creativity that rivals the best efforts of much better-heeled nonprofits elsewhere in the nation.

What do these case studies teach us about nonprofits, the nonprofit infrastructure, and perhaps about philanthropy?

  1. Compounded Socio-Economic/Nonprofit Isolation: Nearly all of the examples of nonprofits doing anything are nonprofits connected to networks, notably CDCs, community action agencies, and faith-based community developers. Outside of the ability to tap networks, nonprofits in these desperately poor communities are pretty lacking in resources to bring to bear. In concentrated poverty situations, observers typically cite the problem of economic and social isolation as perpetuating poverty. The isolation extends to nonprofits: in many instances, the indigenous nonprofit infrastructure serving these communities is isolated from networks and funders that might be able to help.
  2. Nonprofit Infrastructure in Action: Some very active infrastructure operations help make whatever progress is happening happen. In Cleveland and Rochester, local efforts of Enterprise Community Partners (nee the Enterprise Foundation) have bolstered creative local initiatives, notably Enterprise’s work in establishing the Rochester Development Housing Fund to buy, rehab, and resell vacant homes. In Milwaukee, the local office of the Local Initiatives Support Corporation (LISC) has worked with community organizations to create a Center for Family Prosperity connecting low-income Milwaukeeans to jobs (in the winter issue of Nonprofit Quarterly, the editor of CR has an article titled “Infrastructure in Action: Bolstering Nonprofit Community Developers” discussing the functional and less functional elements of the system behind CDCs).
  3. Government Hostility toward Nonprofits: In many cases, it is not too hard to focus on the obvious passive, or sometimes active, hostility of local government officials to partnerships with nonprofits. The case studies occasionally note circumstances such as “little political will” in West Fresno, a “lack (of) trust in local government” in East Austin (Texas), and many other instances of local government expressing little interest in working in partnership with poverty-fighting nonprofits. The backing of infrastructure organizations such as LISC and Enterprise and the financial support of major foundations are crucial to the success of these organizations, but the geographic dispersion of infrastructure support and philanthropic largesse is highly spotty.
  4. Foundations Missing in Action: In many of these smaller communities, the presence of foundations supporting on-the-ground nonprofits and the infrastructure behind them is limited. In some cities, the Annie E. Casey Foundation or the Kellogg Foundation shows up as supporting some initiatives. Predicting whether those commitments will continue in a failing national economy or in the midst of strategic grantmaking changes in the foundations is difficult.
  5. For example, the report cites the Kellogg Foundation “recently having begun to promote the development of leadership and entrepreneurial capacity in rural areas as a means to rebuild economies based on local assets,” but since that report was written, Kellogg has shut down its rural program, shifted to a focus on vulnerable children, and announced its intent to concentrate its grantmaking on only three states. Two of them possess among the largest percentages of people living in poverty areas (Mississippi 41.7 percent, New Mexico 37.1 percent), and maybe Kellogg’s geographic selections make strategic sense, but they won’t capture the Brookings case study areas of Appalachian West Virginia and Kentucky or the Blackfeet Reservation in Montana.

For the Fresno activists, they find foundations willing to put money into the Bay Area (San Francisco and Oakland, where many foundations are headquartered), but relatively nearby Fresno (164 miles from San Francisco) is next to invisible to grantmakers. One Fresno activist pondered, “If Bill Gates wanted to give $1 billion to the neighborhood, could we use it?” It isn’t a worthwhile question; many of the nation’s communities of concentrated poverty simply aren’t sexy enough to warrant attention—unless they are being studied by academic institutions or think tanks. As the McDowell County (West Virginia) community leaders noted, their community has been studied to death, the data being either outdated or more suited to academic use than as practical tools for front line nonprofits. For poor communities outside of the major centers of philanthropy, they’re out of luck, and even more so as foundations appear to be making moves toward strategies of funding think tanks to study the challenge rather than funding the beacons of hope, activism, and creativity fighting for solutions in these neighborhoods every day.

In truth, the Brookings/FRB case studies are pretty unremarkable. They read like the authors see themselves as twenty-first century versions of Michael Harrington writing new chapters of The Other America. In the end, the grinding poverty of these communities is not a new story. Neither is the inaction of the public and private sectors that preserve these areas as monuments to our nation’s reluctance to grapple seriously with issues of class and race.

The backstory to these concentrated poverty case studies is important. It is a narrative of the crucial role of the nonprofit sector, the important support provided by the nonprofit infrastructure, and the need for foundations to address concentrated poverty with dollars on the street, into the hands of the groups on the front lines. Our incoming president ought to be concerned not only with resuscitating the federal government’s commitment to eradicating poverty, but with building and sustaining an infrastructure of nonprofit organizations capable of organizing, planning, visioning, advocating, and implementing solutions.

  • rick cohen

    Because sometimes comments appear on the Cohen Report (see the link at the top of the NPQ homepage) but don’t appear on the CR articles posted on the NPQ homepage itself, I’m posting a very interesting question from the Blue Avocado’s Jan Masaoka and my less than scintillating reply that appeared on the CR webpage.

    1. POSTED BY Jan Masaoka, AT: 12/30/2008, AT 7:50 pm
    I couldn’t agree more with the principles of this article (as in the first sentence), that we need to “build the capacities of, and infuse capital into, community-based nonprofit organizations in poor communities.” This is exactly what so many foundations, consulting firms and think tanks (together the Philanthropic Consultant Industrial Complex) and government agencies don’t get.
    And I’m wondering about your insight that most of the case studies come from networked nonprofits (such as LISC affiliates, CDCs, Habitat for Humanity): does this mean that these are the groups to invest in, or that these are the ones that get written up?
    2. POSTED BY Rick Cohen, AT: 12/31/2008, AT 10:55 am
    Jan, your question is on target and I don’t have the answer. The Brookings/Fed Reserve study was not at all in-depth on the existence, roles, and functions of nonprofits in these communities, so the fact that they mentioned the ones that I noted may be simply that these were more likely to be on their radar screens (addressing community/economic development) than other community-based nonprofits that might have been equally or even more critically important to addressing the causes and consequences of concentrated poverty. Or it might be that the public relations capacities of the network overseers (national LISC, Enterprise, NeighborWorks, Habitat, and the groups associated with the Catholic Church/Catholic Charities) guarantees them visibility in these kinds of studies that might miss the existence, functions, and contributions of other less-networked groups. It reminds me of the still-frequent response of some foundations (and public officials) that there’s nothing for them to do in rural areas because there’s no nonprofit capacity on the ground. Sometimes, it might serve the Philanthropic Consultant Industrial Complex and government agencies to take the time and simply look, no? But the implications of the Abzug/Derryck post-9/11 research in NYC and even Anne’s writing for the Blue Avocado on post-Katrina along the Mississippi Gulf Coast suggests that the linkage of local nonprofits to networks is an extremely valuable attribute for building and sustaining community capacity. Thanks for the comment, Jan.

  • rick cohen

    POSTED BY Gwyn Sondike, AT: 01/06/2009, AT 1:38 pm but PASTED by Rick Cohen

    I agree with your suggestions. However, I have encountered mismanagement of federal and state funding provided to local community groups. I am wondering how we can improve oversight of these groups, specifically groups that are run by county political operatives( i.e. those found in some of our New Jersey counties). For example, some of these groups are suggesting that they would buy homes in foreclosure with state and federal funds and rent out the homes. The groups would also be entitled to any proceeds from the future sales of these homes, COAH funding, etc. I suggest that there is too much room for fraud with this plan and not enough oversight. Your suggestions?

  • rick cohen

    POSTED BY Steve Hoad, AT: 01/06/2009, AT 2:39 pm and PASTED by Rick Cohen

    many of the nation’s communities of concentrated poverty simply
    aren’t sexy enough to warrant attention—unless they are being studied by academic institutions or think tanks. As the McDowell County (West Virginia) community
    leaders noted, their community has been studied to death, the data being either outdated or more suited to academic use than as practical tools for front
    line nonprofits.
    Maybe the most interesting of studies would be the amounts of money spent on studies and white papers vs the amount spent on the ground directly fighting poverty. There’s a whole class of academics and research associates who only hear organizers and people with low income because they’re paid to hear them: and then, all they have to do is write it up! Focus groups, committees, etc always have their paid facilitators and scholars while people with low incomes come and give input mostly, for free with little beneficial follow-up. Breaking the model must include building models of direct action — mistakes will be made but people will feel involved.

  • rick cohen

    POSTED BY Nancy, AT: 01/06/2009, AT 3:09 pm PASTED by Rick Cohen

    Thank you for an insighful analysis of the role of nonprofits in community building campaigns. As you noted, “In the end, the grinding poverty of these communities is not a new story. Neither is the inaction of the public and private sectors that preserve these areas as monuments to our nation’s reluctance to grapple seriously with issues of class and race.” Regretfully, some nonprofits have bought in to the notion that they can make a buck by further debilitating community organizing efforts; such is the case in El Paso, Texas where gentrification is the new mantra of so-called progressives.

  • rick cohen

    POSTED BY Rick Cohen, AT: 01/06/2009, AT 4:24 pm

    Thank you Nancy, Steve, and Gwen for your responses. I wish I had some great answers to the questions you’ve all raised. My off the cuff thoughts are these: Nancy, although I don’t have specifics on the gentrification question you’ve raised (but would love to know more), I have seen progressives promote strategies that end up gentrifying blocks and neighborhoods. Many years ago, i was the housing and economic development director of Jersey City NJ developing anti-displacement strategies, and I was always quite shocked to find how many of the opponents were nominally progressive on other issues. Send me more about the El Paso situation you’re mentioning. Steve, I couldn’t agree more that we’ve entered a period where a large part of our nation’s response to concentrated poverty is to do academic studies. I’m not saying that the Brookings/Federal Reserve study is a bad thing to have done, but I worry that we get a little too focused on studies telling us what we know rather than focused on actions that concretely deal with the problems. For example, you know that I’ve been writing in CR on the subprime mortgage foreclosure issue. It’s a good example of an issue that has seen more good studies issued than you can shake a stick at, but given how long we’ve known about the subprime issue, comparatively little done in terms of major action. It is one of those issues that seems like it’s been subjected to “paralysis by analysis.” Gwen, as a former NJ public official (appointed, not elected!), I know what you’re saying. Our society–and our sector–need strong watchdogs, and we’re reluctant to do that. Don’t we need a really muscular watchdog looking at the bailout moneys, the NSP moneys on subprime foreclosures, and more? Re nonprofits run by the operatives of local politicians, we need a lot of attention there, but all levels of government–and our sector leaders–have shied away from demanding real-time accountability among those political nonprofits. The result is we get accountability after the fact, when the money has already been spent and cannot be recovered (as in the now awakened investigations of Madoff, for example), but not early enough to ensure that tax exempt money was used appropriately. At CR, we’ve written lots of the nonprofit arms of politicians, mostly at the federal level, but sometimes at the state level. Let us know what you’re seeing, and maybe we can take a CR-style peek. Thank you all for your comments.

  • rick cohen

    POSTED BY Steve, AT: 01/08/2009, AT 4:57 pm PASTED by Rick Cohen

    Very interesting piece and topic. While local nonprofits are crucial to addressing poverty, so is the role of an empowered and active citizenry as evidenced by recent movement in the Foundation sector towards movement building.

    The Equal Voice for America’s Families campaign in 2008 brought nonprofit organizations from across the country and their family constituents together to create a national policy agenda that focuses on the needs of families. One of the results was that people living in isolated pockets of poverty connected with others facing the same challenges, albeit in other geographies or ethnic communities.

    More than 15,000 families gathered in September of 2008 around the shared vision that puts families first. The relationships and partnerships that evolved over the course of the campaign, along with the subsequent policy by the organizations and people who participated will benefit all families and communities in America.