Translating strategic plans into impactful community outcomes demands a comprehensive approach with thoughtful planning, informed execution and solid financial management. Conducting a needs assessment helps identify a community’s unique challenges and opportunities, laying the groundwork for targeted action.
Presenting a compelling case that highlights both community impact and financial viability is essential for gaining support to complete a project. Additionally, the New Markets Tax Credit (NMTC) can provide a valuable means of attracting private investment, enhancing the financial viability of projects through tax incentives.
By strategically combining these funding opportunities, organizations can drive the success of their community initiatives, fostering sustainable growth and improving residents’ quality of life.
Step 1: Building the Plan To Produce Your Desired Impacts and Outcomes
What Is Strategic Planning?
Strategic planning serves as the cornerstone of organizational success by providing a structured approach to setting priorities and defining a clear path forward. By understanding these internal and external factors, leaders can identify areas of focus that will drive the organization toward its long-term goals. Deliberate planning involves setting specific, measurable, achievable, relevant and time-bound objectives that align with the organization's mission and vision.
Furthermore, strategic planning enables organizations to be proactive rather than reactive, allowing them to take the lead, target desired results, and position themselves to anticipate environmental changes and adapt accordingly. Rallying the entire organization around a cohesive plan through strategic planning enhances operational efficiency and boosts morale and engagement. This approach has everyone working towards a common purpose with a clear understanding of their role in the larger mission.
Fundamental Questions To Ask
Before embarking on the strategic planning journey, it is essential to lay a strong foundation by addressing fundamental questions that will guide the development and execution of your strategy.
The ABCDE model offers a structured approach:
- Assessment: Conduct environmental scans, gather background information and perform SWOT analyses to understand the landscape.
- Baseline: Evaluate the current situation, identify significant issues, and determine capacity and alignment gaps.
- Components: Define your mission, vision, and values and set specific goals and objectives.
- Down to Specifics: Establish performance assessments, set targets, and outline initiatives and action plans.
- Evaluate: Implement a performance management review process, allowing for adjustments and feedback to refine the plan continuously.
The ABCDE model provides a structured framework for this critical phase, facilitating a comprehensive exploration of your organization's current state and future aspirations. By systematically assessing your environment, establishing a baseline, defining key components, detailing specific actions, and implementing an ongoing evaluation process, the ABCDE model guarantees that your strategic plan is both robust and adaptable.
Step 2: Implementing a Strategic Plan
The successful implementation of a strategic plan is a critical phase that determines whether an organization's vision and goals will translate into reality. If strategic planning is analogous to developing a road map, the implementation phase is about crafting the driving directions. This means laying out, step-by-step, how the team will collectively work towards their shared goals and achieve measurable outcomes.
At the heart of this process lies the necessity for clear and consistent communication with all employees, confirming that everyone understands their role in executing the strategy and feels empowered to contribute. Aligning job roles with strategic objectives not only clarifies expectations but also fosters a sense of ownership and accountability across the organization.
Establishing well-defined timelines for progress monitoring is crucial, as it allows for regular assessment of achievements and challenges, enabling timely adjustments that keep the organization on track. Striking the right balance between transformation and control is essential, helping ensure that while the organization remains agile and responsive to changing circumstances, it also maintains a firm grip on its core objectives.
Community Development Financial Institutions Capitalization Strategies
Crafting effective capitalization strategies for Community Development Financial Institutions (CDFIs) is pivotal in amplifying their impact on economic growth and opportunity in underserved communities. CDFIs are uniquely positioned to bridge the gap in financial services for low-income areas, offering crucial access to credit, loans and investments that drive local development. To maximize the potential of CDFI resources, organizations must adopt strategic approaches that not only secure funding but also enhance their operational capacity and outreach.
Additionally, understanding and meeting the eligibility requirements for CDFI certification is essential, as it maintains alignment with the core mission of community development and the capacity to effectively serve target markets. By implementing these strategies, organizations can strengthen their financial foundation and extend their influence in fostering economic resilience and prosperity within the communities they serve.
Why Get Certified?
Obtaining certification from the U.S. Department of Treasury’s CDFI Fund is a strategic move that can significantly enhance an organization's capacity to drive community development. Certification provides access to a variety of financial resources, including grants, awards and tax credits, which can be pivotal in scaling operations and increasing the impact of financial products and services offered to underserved communities.
The requirement for CDFIs to recertify annually guarantees that organizations remain aligned with the mission of promoting community development and continue to meet the evolving needs of their target markets. By staying compliant and continuously evaluating their impact, CDFIs can effectively leverage the opportunities that certification affords, positioning themselves as key players in the economic revitalization of low-income areas.
CDFI Fund Grant Programs
One notable initiative from the CDFI Fund is the Bank Enterprise Award Program, which incentivizes banks to increase their investments in CDFIs and economically distressed communities. Financial institutions can receive monetary awards that recognize and encourage support of community development activities, such as increasing lending, investing in affordable housing and expanding financial services in underserved areas.
Another significant program is the Bond Guarantee Program, which offers CDFIs access to long-term capital by pledging bonds issued by qualified organizations. This program helps CDFIs secure large-scale financing for projects that require substantial investment, such as infrastructure development, community facilities and economic revitalization initiatives. Additionally, the Equitable Recovery Program provides targeted support to communities disproportionately affected by economic downturns.
Step 3: Understanding and Communicating Needs to Funders
To successfully secure funding from institutional lenders, start by comprehensively assessing your revenue streams. Recognizing these sources helps pinpoint any funding gaps that might hinder your organizational goals. Crafting a clear and compelling narrative around these gaps and your overall funding needs is essential. A well-developed revenue assessment not only informs your funding strategy but also positions your organization as a credible and financially astute partner for lenders.
When engaging with funders, it's equally important to consider their priorities and past involvement with similar initiatives. Begin by evaluating how your organization's mission and project goals align with each funder’s track record. Research the types of projects they have historically supported and the outcomes they value, as this can provide critical insights into their decision-making processes. Additionally, assess your existing relationship with these funders, if any, and identify ways to strengthen these connections through effective communication and engagement.
Step 4: Leveraging New Markets Tax Credits for Community Development
The NMTC program plays a pivotal role in fostering economic development in low-income communities by providing tax incentives that attract private investment. Community Development Entities (CDEs) are at the forefront of leveraging this program. Successful NMTC applications require a strong track record of raising capital, robust debt and equity investor relationships and demonstrated economic benefits for all parties involved.
Once awarded, CDEs use these allocations to attract private investments, which are then funneled into community development projects that meet specific eligibility criteria. CDEs work closely with Qualified Active Low-Income Community Businesses (QALICBs) to safeguard that the funds are directed toward projects that create measurable impacts for the low-income community. QALICBs are businesses or entities that operate within or directly serve low-income communities and meet certain regulatory requirements, making them eligible to receive NMTC-enhanced investments.
By pairing NMTC allocations with QALICBs, CDEs can support a wide range of initiatives, from building affordable housing and healthcare facilities to launching small business incubators and community centers. The synergy between CDEs and QALICBs exemplifies how targeted financial tools can drive meaningful change, promoting economic revitalization and improving the quality of life in underserved areas.
Let Us Be Your Guide
Navigating the complexities of strategic planning, CDFI capitalization and NMTC allocations can be a daunting task for any organization. Cherry Bekaert's Strategic Financing Services professionals are equipped to guide you through each stage of your community development journey, from crafting a strategic plan that aligns with your mission to precise implementation and securing the necessary funding to bring your vision to life. Whether you're seeking CDFI certification, exploring grant opportunities, or leveraging NMTC allocations, Cherry Bekaert is committed to helping you maximize your impact and achieve sustainable growth.
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