When Charity Doesn't Work Anymore. . .

Recently, at a rather large community meeting, I happen to be seated by one of the most important and influential foundation leaders in Texas.

As we visited before the meeting got underway, the issue of affordable housing and community development came up.

Seated in front of me and to my other side were two of the most successful low-income, workforce housing developers in Dallas. Both work their hearts out to see that as many low-income families here in Dallas as possible have a decent place to call home.

My foundation friend commented, "When non-profit organizations become real estate developers, I just don't understand. I never know how to react or what to say."

At that point, I didn't know what to say.

"Well, community development organizations go where market rate developers just won't go," I tried to begin an explanation.

I turned to my friend on my right and asked him how many units he had developed in his target area in one of the toughest parts of inner city South Dallas.

He reported that they had built almost 500 units in an area where new development just never happened until he began.

I continued by asking him if market-rate developers were showing up now that he had done so much new work.

He smiled and answered simply, "You bet!"

I continued explaining to my foundation friend that community development organizations often "seeded" neighborhoods with hope and promise by developing new housing so that others would follow, drawn in by new and recovering markets.

He seemed to like that, but he was still concerned that such non-profits may be "losing their" way by abandoning more "traditional charity" for the work of community and economic development.

I hurriedly agreed that there was a huge and demonstrable difference between charity and community development. Charity alone will never renew a neighborhood and seldom will change a life. Much more is required.

After a long pause, he changed the subject.

At that point I found myself sitting there wondering how the leader of one of the most important foundations in the state didn't understand the basics of community development or the cutting edge learning going on in cities all across the nation.

Possibly I have stumbled upon part of the problem we are having in Dallas.

What are the "take aways" here for people who are serious about changing communities and renewing neighborhoods?

1) Funders and donors love charity. "Helping people" is the name of the most popular game in town. Think about it. People with problems continue to present their "issues." People with money and, thus, power maintain control of both, parceling it out at a rate in keeping with their good judgment. At the same time they get a tax break for doing so!

2) Inner city communities need and desire much more than charity. What is needed is structural change. Market forces must be harnessed for the good of devastated areas, that is if we really want to see things change.

Public policy decisions need to be made to reward pioneer, for-profit developers--after all, we do it all the time in other parts of town!

The same public rules need to incentivize non-profit developers who are willing to go where no sane market developers are prepared to go, at least not at the beginning edges of renewal.

3) At some point we just need to apply the "golden rule." If you were very poor, what would you desire? Another handout--just one more in an endless stream of handouts that justified the work of some foundation? Or would you want a chance to see life be better, thanks to your hard work and to systemic change in how opportunity works in a community? The answer is pretty obvious, huh?

4) We must move from a "do-good, give away" model to a community investment model. People who have lots of money to give away need to re-think their strategy. Foundations need to invest their funds where they will do the most good, enjoy sustainable results and change life for as many people as possible.

For years foundations and donors have been telling organizations like Central Dallas Ministries that we must find ways to insure that our work will continue.

So, don't get upset with us when we do it!

Developing affordable housing can actually work from an economic standpoint. Our deals cash flow!

The only difference in our work and those in the for-profit sector is that our "profit" goes back into the organization to do more good work while we wait for the market developers to catch up and catch on to the real opportunities that await them in the inner city!

Isaiah 58:12