The War on Poverty: Observations From a CED Field Practitioner

Please note: This is an expanded version of the original blog entry by Marcus Weiss as part of REDF’s series on the War on Poverty.

Reflecting on innovations catalyzed by the War on Poverty inspires a comparison of the energy in nurturing job creation for low-income community residents by REDF and the social enterprise field. In 1966, New York Mayor John Lindsay, accompanied Senators Jacob Javits and Robert Kennedy through the Bedford-Stuyvesant neighborhood. They were challenged to talk to community organizational leaders about mobilizing programmatic innovations rather than perpetuating a history of studying this economically distressed Brooklyn community.1 Senators Javits and Kennedy soon thereafter sponsored amendments to the Economic Opportunity Act to finance “…special programs…to have an appreciable impact on such communities and neighborhoods in arresting tendencies for dependency, chronic unemployment and rising community tensions.”2


The initial model for the community economic development (CED) “movement” was supported by the legislation which launched two sister entities known as the Bedford-Stuyvesant Restoration Corporation and the Bedford-Stuyvesant Development and Services Corporation. Community development corporations (CDCs) were envisioned as being “…created and controlled by people living in impoverished areas for the purpose of planning, stimulating, financing and, when necessary, owning and operating businesses that will provide employment income and a better life for the residents of these areas.”3


Originally described as the “Special Impact” program, in the late 60s $20 million was provided initially through a mix of federal agencies including the Office of Economic Opportunity (OEO), Labor, Agriculture and the Economic Development Administration of the U.S. Department of Commerce. Ultimately regulations also facilitated access by CDCs to undertakings operated by the Small Business Administration and the Department of Housing and Urban Development which were mandated to “…ensure availability [of programs] to community development corporations.” Nineteen seventy two amendments to the Economic Opportunity Act known as “Title VII” particularly referenced economic and business development programs “…to start, expand, or locate businesses…to provide employment and ownership opportunities for residents.”


The initial Title VII CDCs had capital, sophisticated staff and access to national technical assistance specialists. Recently reflecting on those early programmatic years was one of the nation’s most senior directors, Al Caldarelli, Esq., the President of the East Boston Community Development Corporation which was one of three Boston-based “Title VII” CDCs (along with the Greater Roxbury Development Corporation and the Chinese Economic Development Council). Mr. Caldarelli (who began his career at EBCDC in 1971) recalled having a 21-member staff totally funded by OEO with $800,000 for administrative support, skilled professionals in departments focused on planning, business development, real estate development, social service delivery and community advocacy. His wistful recollections also depicted $2 million being deposited in the CDC’s local bank account for pending or future job creation enterprises or investments for which federal agency approval would subsequently flow upon submissions of pertinent business planning documents.


The CDCs nationally had access to highly skilled economists, MBAs, lawyers and planners who were housed in Cambridge at the federally-funded Center for Community Economic Development (CCED). CCED was dismantled when President Reagan eliminated the War on Poverty agency and moved the CED funding to the Office of Community Services at the Department of Health and Human Services (HHS). (Our organization emerged from those CCED “ashes” soon thereafter). CCED’s National Technical Assistance Director, Susan Horn-Moo, Esq., recalled that these specialists, however, regularly deferred to the resource center’s librarian who made available complete file boxes of various replicable ventures around the country (e.g. for supermarkets, manufacturing facilities and retail plazas). In those days, CDCs could regularly peruse market studies, analyses of industry trends, architectural drawings, operational and personnel budgets, pro formas and a range of resource documents shared by peers for sister CDCs contemplating a comparable business.


However, in subsequent years, CDCs were redirected by policy makers, intermediaries and funding sources to concentrate on desperately needed affordable housing. Breakthroughs in the early 90s with respect to enforcement of the Community Reinvestment Act (CRA) similarly kindled disproportionate bank interest in funding housing deals rather than capitalizing emerging entrepreneurs. Long before landmark findings about redlining were produced in a study led by William Spring (a former Carter Administration White House ally of CDCs) of the Federal Reserve Bank of Boston, Citibank and a few likeminded financial institutions committed to revitalizing communities. They recognized the need to restore the commercial and business districts proximate to the banks’ affordable housing investments, lest the value of those mortgages continue to decline.


Citibank acted as neighborhoods in Brooklyn’s Flatbush section suffered from disinvestment and the closing of numerous family businesses due to the lack of ownership succession and the availability of renovation financing. As a field practitioner assigned to work with CDCs during the 70s to rebuild retail corridors, establish urban farming settings and challenge highway land takings, I learned while working on the Citibank Flatbush Pilot Project that supportive bankers from New York, Pittsburgh and Boston were willing to engage through direct investments in projects (or through intermediaries) rather than merely rely on public relations documents that characterized CRA compliance prior to the landmark Federal Reserve study (and resulting new banking agency enforcement regulations).


Subsequently, many other banks became enlightened to the fact that major mergers and acquisitions could be jeopardized by community challenges regarding a bank’s inadequate compliance with the CRA.4 As the banks “got religion,” a number of the best and brightest practitioners at CDCs were lured away to become community reinvestment officers. During subsequent decades, the growth of intermediaries, city community development collaboratives and foundations embracing community economic development further exacerbated the talent drain from CDCs.


The proliferation of community development financial institutions (CDFIs) have had a similar impact as funders and top-level practitioners found increasing value in providing the financing for projects in low-income communities. This seemed preferable to directly developing entrepreneurial and commercial real estate projects during decades when funding was limited to an annual competition with only 60 to 90 days to undertake marketing studies, obtain bank loans, prepare a business plan and the required 150-page federal funding application. Practitioners shifting to community development finance operations frequently found that awards from Treasury programs like the CDFI Fund and New Market Tax Credit programs provided for sufficient resources for administrative budgets while many CDCs across the nation were struggling to find resources for office/staff overhead.


Despite the cautionary tales about resource shifting, trade association collapse and human capital constraints, “mature” practitioners like myself have become encouraged by the infusion into our “social enterprise” sector of top young talent with MBAs and urban planning degrees and practical business experience. Many of these individuals are flocking to programs such as REDF and Wholesome Wave (a comparably admirable pioneering healthy food advocacy and funding entity). Their respective work in nurturing job creation for some of our hardest-to-serve populations merits optimism about emerging “movements” where individuals currently seem as motivated about social justice as folks were in the 60s and 70s.


  1. “Bedford-Stuyvesant’s Restoration Corporation: Case Study of a Community Economic Development Program.” Hillard Pouncy, (1981), as reported in Urban Problems and Community Development. Ronald F. Ferguson and William T. Dickens, Eds. (1999). []
  2. 42 U.S.C. 2763 as published in 1974 in The Lawyers Manual on Community-Based Economic Development. National Housing and Economic Development Law Project (today known as the Insight Center for Community Economic Development). []
  3. Geoffrey Faux. CDCs: New Hope For the Inner City, 29. (1971) as quoted in The Lawyers Manual on Community-Based Economic Development  Ibid. []
  4. Comeback Cities: A Blueprint For Urban Neighborhood Revival. Paul S. Grogan and Tony Proscio. (2000). West View Press. []