What Has LISC Learned about Community Development in 30 Years?

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April 8, 2011; Source: National League of Cities | Neil Peirce has spent as much time as anyone in journalism monitoring and documenting the progress of the Local Initiatives Support Corporation, the nation’s largest nonprofit community development financial intermediary, created by the Ford Foundation. Here he offers a perspective on LISC’s first thirty years and where it might go next, reporting on LISC’s 30th anniversary gathering on March 24th.

Nearly everyone knows something about LISC’s role in shaping and leading the community development industry. Its first executive director was Mike Sviridoff, a former Ford Foundation Vice President for National Affairs, a mentor to many of us who grew up in the sector. Its second CEO was Paul Grogan who now heads The Boston Foundation, and the current head of the organization, Michael Rubinger, was recruited from Pew. Many NPQ readers know from our reporting about LISC’s selection as one of the Social Innovation Fund grantees. LISC routinely ranks among the top nonprofits in the nation ranked by fundraising and by total assets (especially considering its affiliation with the National Equity Fund).

But for all of that, community development is hardly on the upswing. LISC has demonstrated the importance of building a strong, neighborhood-based nonprofit infrastructure, but the foundations have been straying from that LISC lesson. In fact, one wonders where foundations are in their historic commitment to community development. Kathy Wylde, president of the business-led Partnership for New York City, told the participants at LISC’s 30th anniversary program that community development is “hardly mentioned” by banks and corporations she knows. Wylde’s concern with the disappearance of community development in philanthropic conversations and Paul Light’s warning that the collapse of nonprofits in this economy is going to lead to “service deserts” for poor people add up to a huge challenge to a community development intermediary like LISC.

LISC’s Social Innovation Fund program stands out for its commitment to locally based nonprofits, but an unfortunate trend in social innovation and in philanthropy is a diminution of community-based nonprofits in favor of larger social entrepreneurial franchises that do not convey much of a feel of being much committed to the idea of local, community resident governance. The successes that LISC has facilitated in housing, schools, supermarkets, and child care centers are not simply financial innovations, but successes because they become organic parts of their neighborhoods, institutions and assets that are connected to the infrastructure of community development corporations that LISC has nurtured over these decades.

Why aren’t corporations and banks talking about community development? Perhaps it’s because community development has to show its mettle in a recession where the underlying problem is a combination of unemployment and underemployment. Plus there is the nation’s ongoing mortgage foreclosure crisis that is undoing, in some localities, decades of community development accomplishments.

Former Rockefeller President (and former LISC board member) Peter Goldmark told the crowd at the 30th anniversary gathering that LISC, and the community development industry overall, had to work “to design, test, make work a community-based formula to put folks back to work.” He suggested that LISC and its allies might “create an employment system as effective as community development has been – a system that other organizations and foundations will want to buy into.”

In community development, we used to talk about economic development as an art, not a science. Have community developers and their foundation investors found the formula to convert the art to a science?—Rick Cohen