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Changing Lives |
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Compassion Spotlight
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The Need
Economic development is an integral part of strengthening communities and ensuring our Nation’s economic vitality.
Successful economic development requires strong partnerships between government, the private sector, and nonprofit organizations.
Communities must be empowered to develop their own economic strategies based on local and regional institutions.
The Response
Faith-based and community organizations (FBCOs) are a strong asset in the national strategy for local economic development. FBCOs do important work to revitalize communities, establish sustainable economic development initiatives, attract private investments, build wealth, and encourage entrepreneurship.
The U.S. Department of Commerce, U.S. Small Business Administration (SBA), and U.S. Agency for International Development (USAID) all play a role in promoting the Nation and world’s commerce, business, and economic development by assisting communities with achieving economic growth and prosperity. Through creative partnerships with FBCOs, these Federal agencies work to leverage public resources and enhance the effectiveness of their programs.
U.S. Department of Commerce
The Economic Development Administration (EDA) is the principal U.S. Department of Commerce agency that invests in social service organizations. EDA helps business, social service, and local government partners across the
Nation create wealth and minimize poverty by promoting a favorable business environment to attract private capital investment and higher-skill, higher-wage jobs through capacity building, planning, infrastructure, and research grants, as well as other strategic initiatives.
EDA emphasizes regionalism, innovation, and entrepreneurship as the building blocks for successful economic development. EDA investments are focused on locally-developed, regionally-based, high-value, and cutting-edge economic development initiatives that achieve the highest return on the taxpayers’ investment and that directly contribute to regional and National economic growth.
EDA has a long history of providing grants to FBCOs. Since 2001, EDA has invested over $175 million in 236 faith-based or community projects, whose economic benefit was anticipated to create more than 88,000 jobs and $3.8 billion in private investment. In 2007 alone, EDA invested more than $28 million in 41 such projects, with anticipated benefit of more than 6,000 created jobs and more than $299 million in private sector investment. Since 2002, EDA has increased its projects with FBCOs by 70%.
U.S. Small Business Administration (SBA)
SBA partners with nonprofit organizations in both its financial assistance programs and entrepreneurial development programs. Nonprofit credit unions, micro-lenders, and certified development companies provide SBA credit assistance to small businesses unable to obtain credit at reasonable terms. Through its nonprofit partners at Women’s Business Centers (WBC) and SCORE “Counselors to America’s Small Business,” SBA provides management counseling and training to small businesses—including nonprofit FBCOs. Technical training is provided on developing a business plan, managing and growing, identifying appropriate sources of capital, continuity of operations, and other key issues. These programs focus on assisting underserved and rural communities and people in need: minorities, veterans, Native Americans, and women.
In 2007, nearly 1,000,000 small businesses received assistance from SBA’s nonprofit counseling and training partners.
WBC provides grants to nonprofit organizations located throughout the Nation to aid and encourage the development and growth of small women-owned businesses. In FY 2007, WBC assisted 148,106 entrepreneurs and helped create 620 new small businesses.
SCORE is a nonprofit association dedicated to educating entrepreneurs and to supporting the formation, growth, and success of small business nationwide. SCORE has 10,500 volunteer counselors located at 389 chapter offices across the country. In FY 2007, SCORE provided 1.1 million volunteer hours serving 310,410 small business clients. Learn more about SCORE
In FY 2007, SBA partnered with 378 Credit Unions, which made 1,770 SBA guaranteed loans totaling $144,947,436; 170 Microloan Intermediary Lenders, which made 2,501 SBA loans totaling $22,234,004; and 271 Certified Development Companies, which made 10,668 SBA loans totaling $6.3 billion.
U.S. Agency for International Development (USAID)
USAID’s Global Development Alliance (GDA) works to forge alliances among the public, private, and nonprofit sectors to stimulate economic growth, develop businesses and workforces, and address a range of other needs. By linking the assets of companies, foundations, and non-governmental organizations with USAID’s resources, GDA helps all sectors work together to improve lives, provide employment, and expand opportunity.
Since 2001, GDA has cultivated more than 680 alliances with more than 1,700 individual partners and leveraged over $9 billion in combined public-private sector resources.
FBCOs bring much to these public-private partnerships, including existing networks of relationships, knowledge of customs, and local buy-in from the communities they serve. GDA partnerships that actively involve local leadership and local beneficiaries in design and implementation are most likely to be successful and sustainable.
