Community Development Block Grants Serve the Needs of Nonprofits

Posted by Kim Joyce on Jan 14, 2015 6:00:00 AM

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CDBGThe first time I heard the acronym "CDBG" as a brand new grant writer, I didn’t know what to think. What did those four letters stand for ("Community Development Block Grant"), and why were they so important? As a grant writer located in Maricopa County, Arizona, I know that most cities have some form of CDBG funding—in fact, practically every city in the County (Scottsdale, Mesa, Glendale, Chandler, Peoria, and the Town of Gilbert). Why are these grants are so important? Because with other funding sources drying up, CDBG grants are an excellent source of funding that nonprofits have come to rely on over the years.

What Are Community Development Block Grants?

With the enactment of the Housing and Community Development Act in 1974, the Community Development Block Grant (CDBG) program was born. The CDBG program provides formula-based, flexible grants to local governments to address a wide range of unique community development needs. It is the longest-running program for the community at the U.S. Department of Housing and Urban Development (HUD).

A common thread through all eligible CDBG projects is that the grants are intended to serve low- to moderate-income individuals. Eligible projects must also meet one of the national objectives:

  • Primary benefit to low- to moderate-income persons
  • Prevention or removal of slum and blight
  • Addressing urgent community needs

Types of eligible CDBG projects for nonprofits across the nation include those under categories such as Economic Development, Public Infrastructure, Acquisition of Real Property; Demolition; Housing Rehabilitation; Housing Services; Public Facilities Improvements; Public Services; and New Housing Construction.

Some examples of successfully funded CDBG Public Service grants I have written include those for an emergency and supplemental food program at a local food bank, an adaptive sports program for blind children, and a mentoring program for at-risk youth. An example of a funded CDBG Public Facilities grant is one that paid for new HVAC units for a social services agency serving children. (With the latter grant, I actually got locked out on the roof taking pictures of the outdated HVAC units to include in the grant submission! But we won the grant, so it was well worth it.)

Why Local Nonprofits Need the Money

The financial needs of local nonprofits are typically greater than the amount of funding available. Nonprofit organizations are constantly seeking financial security by seeking to secure multiple, diverse funding streams in order to make ends meet. Funding is never a guarantee, and organizations never know which grants and donors they will secure year after year. How a program will become sustainable is always the million-dollar question. Therefore, CDBG funding is critical and supplements revenue for additional community services. There are three main reasons why nonprofits need the money:

1. Competition is fierce, and local funds are scarce.
This is a continual problem. Nonprofits are in constant competition for local funding, and there is just not enough money to go around. Local foundations typically receive far more funding requests than they can grant. Many have had a decline in assets over the past several years, causing them to grant out less money to fewer organizations. Some have been hit particularly hard due to the Great Recession, and have frozen their grant making for the time being, or indefinitely.
2. Local nonprofits serve the community.
Local nonprofits provide benefit to the community 24/7. Whether it’s providing shelter for the homeless, food boxes for the hungry, mentoring services for at-risk youth, arts and culture programs, or services for persons with disabilities, nonprofits provide countless services for local residents and continue to impact society. Yet with sparse resources, these organizations are faced with the challenge of trying to provide high-quality services for clients with limited financial and human resources.
3. CDBG grants fund salaries and other expenses that many other foundation and corporate funders do not.
Many foundations and corporate funders will not fund salaries. So how are nonprofits supposed to run their programs? It takes people to run programs, and CDBG grants are a coveted source of salary funding for many nonprofits.

How Can Your Nonprofit Have a Say in Where CDBG Funds Are Spent?

Cities and local jurisdictions develop five-year consolidated plans to assess community development and housing needs in order to make sound investments in their communities. This process involves gathering feedback from citizens and nonprofit groups. When your nonprofit has the chance, make your voice heard. Attend the public hearings and planning sessions to give your input. It is also a good idea to check your local library for copies of previously funded CDBG proposals. These proposals are public documents: educate yourself on the types of projects your city has funded in the past, and what a successfully funded proposal looks like. (Grants Network subscribers can check the grant-prospecting database for successful CDBG applications as example models.)

Across the nation, units of government are still scrambling to stretch reduced allocations from the CDBG program. Grants in some cities may be getting smaller, and it is still a highly competitive process. Although not all grant applicants can walk away with an award, there is still a fair disbursement of public funding and support for the local community. Becoming familiar with the process and funded proposals can have its rewards—receiving funding for your nonprofit that really needs the money.

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Topics: Federal Grants, Nonprofits, Local Government, Formula Grants, CDBG

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