The purpose of the CED program is to provide technical and financial assistance for community economic development activities designed to address the economic needs of low-income individuals and families through the creation of employment and business opportunities.   The lives of these persons are enhanced through the creation of permanent employment and business expansion.  OCS seeks to fund projects that focus on sustained economic outcomes and implement strategies for achieving self sufficiency for families. In addition, funded projects must foster sustained employment opportunities for low-income populations within communities.

CED projects may include business start-ups, business expansions, the development of new products and services and other commercial activities that have as the end results the creation of new jobs for low-income persons.   For FY 2008, OCS will not consider applications that propose the creation of microenterprise businesses under this announcement.  Incubator development is an allowable project as long as the focus of the incubator is on substantial job creation for low-income persons and industries in the high growth initiatives. Applicants seeking to propose the creation of projects that are microenterprise business training and technical assistance centers are urged to review the Job Opportunities for Low-Income Individuals (JOLI) FY 2008 program announcement at http://www.acf.hhs.gov/programs/ocs/dcdp/joli/index.html once available.  CED funds may not be used exclusively to support training and technical assistance centers as the vehicle for the creation of jobs. 

Applicants should provide a project summary/abstract of one or two paragraphs, not to exceed 350 words, that describes the community in which the project will be implemented, beneficiaries to be served, and the type(s) of business(es) to be developed. Include a statement that the project is financially feasible (i.e., debt coverage ratio is valid), and identify the type(s) of jobs to be created, projected cost-per-job, any land or building to be purchased or building constructed and resources leveraged.  The summary should address how these elements will have the intended effect on the community.   

Project Narrative

Successful applications must provide evidence to support the following: the project's objectives are supported by the established understanding of the needs of assistance of the target population and community; the results and benefits expected through the funding of this project are defined; a sound and logical approach to achieving these results is described, with supporting documentation that reflects a sustainable business model to maintain employment for individuals; third party and cooperative agreements that support the objectives of the project are provided; the application demonstrates the experience and capacity of the project management team and CDC that will implement the project; and, an evaluation plan that will provide findings on the process and outcome measures for this project.

Therefore, applicants should describe the target population including the percentage of persons who are low-income, including TANF recipients, discuss the percentage of overall poverty that exists in the community where the project will be implemented, describe the precise geographic area in that the project will operate including boundaries, reference any planning studies that have been completed and provide outside testimonials or letters of support from other concerned interests in the project.  Further, a successful project should describe how it will address systemic personal barriers to employment or business development such as illiteracy, substance abuse, inadequate transportation, child care, insufficient life skills, past criminal history, health and any other systemic barriers which could inhibit success if not adequately addressed.  Community barriers might include lack of jobs (e.g., high unemployment rate); lack of public transportation; lack of markets; unavailability of financing, insurance or bonding; inadequate social services (e.g., employment service, child care, job training); high incidence of crime; inadequate health care; or environmental hazards (such as toxic dumpsites or leaking underground tanks).  

Applicants should provide a discussion on the results or benefits expected from the proposed project for the beneficiaries and outline the number and type of new jobs that will be created. This discussion should include the expected starting wage and a statement regarding wage growth as a result of career progression that participants who obtain those jobs will likely earn. When detailing the types of jobs that a project will create, applicants should describe the activities that will be pursued in order to create the specified number of jobs, and what strategies the applicant will use to get low-income persons or TANF recipients into these jobs.   Furthermore, applicants should describe the long-term economic benefits that the participants will receive.  Applicants should also discuss any long-lasting benefits to the community such as fulfilling retail needs, fulfilling child care needs or any other benefits to the geographic location.  Any jobs or businesses created should provide a livable wage, provide for career development opportunities, offer health insurance and otherwise assist the person to provide for his or her own needs without the need for public assistance.  The results and benefits discussion should provide a plan for sustaining the jobs created or new businesses developed after Federal support ends for at least two years beyond the end of the grant.  Furthermore, applicants should describe their marketing strategies for any products or services in their plans for sustainability of the businesses after the Federal funding has ended. 

Consistent with the goals of the DOL's High Growth Jobs Training Initiative, applicants should consider industries that have the greatest potential to yield jobs with career development opportunity for low-income persons.  DOL has identified 14 sectors that fit within the following criteria: (1) they are projected to add substantial numbers of new jobs to the economy or affect the growth of other industries; or (2) they are existing or emerging businesses being transformed by technology and innovation requiring new skill sets for workers. Furthermore, applicants are encouraged to consider partnering with grantees of the DOL's Employment Training Administration (ETA).  For more information on the DOL's High Growth Jobs Training Initiative and the other programs of the ETA, please visit http://www.doleta.gov/BRG/JobTrainInitiative/.

Applicants must describe the approach and provide detail of how the proposed new jobs will be created and any unique features that address the economic needs of low-income individuals and families.  OCS seeks sound projects that have outlined a plan of action with milestones that the project must achieve before the project's objectives can be realized.  The applicant should provide a month by month timeline for the project. The projection for the jobs should be in place at least one year, before the anticipated project end date.

The application should include a financial plan demonstrating and providing documentation for the economic supports underpinning the project and showing the project's potential, and the timetable for financial self-sufficiency, including for both the applicant and the third party, if appropriate, profit and loss forecasts, cash flow projections, balance sheets, and a Sources and Use of Funds Statement for all funds available to the project.  If the project is a non-construction project, then provide these items for the first three years; and if the project is a construction project, then provide these items for the first five years of the project.  A brief summary discussing any further capital requirements and methods for obtaining needed resources should also be incorporated into the application. Provide a list of organizations, cooperating entities, consultants, or other key individuals who will work on the project along with a short description of the nature of their effort or contribution.  

The applicant must discuss what type of physical facility it needs to operate the project and provide evidence that this site has been secured through lease/ownership or will be constructed.  Further, the applicant should describe any equipment that it will need to accomplish the goals of the project and provide evidence of how this equipment will be acquired. 

To achieve the goals of the proposed project, the application must describe all financial partnership arrangements that are necessary for the success of the project.  The application must provide documented evidence, such as a signed agreement between the third party and the applicant.  The third-party agreement must clearly outline the technical and financial assistance that will be provided by the applicant.   At a minimum, the agreement should address the following: 

1. A minimum of 90 percent of the jobs proposed for creation as a result of the injection of grant funds will be filled by low-income individuals;

2. The applicant will have the right to screen prospective candidates for jobs to be filled by low-income individuals and to verify their eligibility;
   
   
3. If the applicant's equity investment equals 25 percent or more of the businesses assets, the grantee will have representation on the Board of Directors;
   
   
4. The third- party will maintain specific documentation related to the expenditure of the grant funds invested and/or loaned to the entity.   Reports will be made to the applicant regarding the use of the grant funds no less than on a quarterly basis;
   
   
5. The third-party must request approval to expend the funds in any manner different than proposed by the applicant in the application.  The expenditure will not occur until the grantee obtains clear written authority from the Department of Health and Human Services (HHS) of such approval;
   
   
6. The third-party must agree to provide HHS or its representative access to all documents related to the funded project as requested;
   
   
7. The third-party will provide to the applicant, written procedures to assure that there are no duplicate counts of jobs created; and
   
   
8. Detailed information will be provided to the applicant on how the third-party will use the grant funds during the course of the project.    In addition, the agreement must provide details on how the grantee will provide oversight and technical assistance to the third-party to ensure the retention of low-income individuals in the newly created jobs and/or businesses.

 If the applicant proposes to use the OCS funds as either an equity investment in a business or a loan or revolving loan fund, then there must be an additional third-party agreement covering:

 1. The equity investment which includes, at a minimum:

(a) The purpose(s) for which the applicant will make the equity investment;

(b) The type of equity transaction (e.g. stock purchase);

(c) The cost-per-share and basis on which the applicant derived the cost-per-share;

(d) The number of shares the applicant will purchase;

(e) The percentage of CDC ownership in the business;

(f) The term or duration of the agreement;

(g) The number of seats on the board, if applicable; and 

(h) The signatures of the authorized officials of the applicant and third-party organization(s). 

 OR

 2. The loan or revolving loan third-party agreement which includes, at a minimum:

(a) The purpose(s) for which the applicant will make a loan;

(b) The interest rates and other fees;

(c) The terms of the loan;

(d) The repayment schedule;

(e) The collateral security;

(f) The default and collection procedures; and

(g) The signatures of the authorized officials of the lender and borrower. 

To show that a third-party organization is capable of handling Federal resources, a signed statement by a certified, licensed public accountant should accompany the application.  The statement will certify the sufficiency of the third- party's financial management system in accordance with 45 CFR Part 74, to protect adequately any Federal funds awarded under the applications; and a financial statement of the third-party's financial health.  If this statement is not available because the organization is a newly formed entity, the applicant must include a statement to this affect.

OCS encourages collaboration agreements from public assistance and other agencies providing referrals and resources to the project including local agencies responsible for administering child support enforcement, TANF, and employment education and training programs (i.e., Department of Labor's ETA-funded One-Stop Career Centers). The application should include written agreements from the local TANF or other employment education and training offices, and child support enforcement agency indicating what actions will be taken to integrate/coordinate services that relate directly to the project for which funds are being requested. The application should provide documentation that illustrates the organizational experience is related to the employment, education, and training program.

OCS has recognized that successful projects have strong organizational capacity and well-qualified staff administering the projects.  Applicant organizations should profile the staff, and their qualifications, who will execute the project.  Staff qualifications should relate to the responsibilities that they will have for the project. To support its statements, the applicant must cite two or three examples of past successes in implementing community economic development projects including any previous successfully implemented OCS projects. 

Similarly, less experienced CDCs should strongly consider partnering with other experienced CDCs, as part of the organization's team. The organization should address its own ability, and that of any partners, to successfully complete the proposed project. The application should provide for any proposed partner, three examples of successful CED, JOLI or other community economic development efforts, including the type of project and the number of jobs or businesses created or expanded.  

The application should provide details of the partnerships with respect to technical assistance that the experienced CDC will provide to strengthen the project.  Applicants must include the partnering agreement and the budget should reflect any costs necessary to cover this support; (e.g., travel, consultants,) etc.  The experienced CDC does not have to be located within the same State as the less experienced CDC, but should have experience in managing a similar project as the one being proposed.  The partnership between the less experienced CDC and the experienced CDC will be evaluated together as organizational capacity for this project.

Previous successfully funded applications have included clear, complete, and well-justified budgets and budget narratives.  In addition, applicants must include a Source and Uses of Funds Statement of non-OCS funding provided for the project.  A complete budget includes a description of the line item and a calculation for each object class.  Calculations must include estimation methods, quantities, unit costs, and other similar quantitative detail sufficient for verification of the calculation.  Budget narratives should discuss the necessity, reasonableness, and allocation of the proposed costs.  If the applicant proposes to use other funding in addition to OCS funding to implement the project, then the applicant must reflect this in its budget.

The applicant should provide details of all the costs in the project budget.  Applicants must also show a plan to make the project profitable and a plan for sustaining the project after OCS funding has ended.   In the travel portion of the budget, the applicant should budget funds for two staff persons to attend a training and technical assistance conference in Washington, D.C. 

OCS intends that applicants use awarded funds to support job creation.  To that end, applicants may not use CED funds exclusively to support training and technical assistance, but must create jobs themselves or provide financial assistance to businesses to create jobs through third-party agreements. 

The cost per job created should not exceed $15,000 or $20,000 for construction projects.  While created jobs may include jobs for persons who are not classified as low-income, the primary purpose of the CED program is to create opportunities for low-income persons.  As a result, low-income persons must fill a minimum of 90 percent of all created jobs.

Applicants should include an outline of an Evaluation Plan of the project that includes both process and outcome measures.  Together the process and outcome evaluations should answer the question: "What did this project accomplish; and why was the project successful or why was the project not successful?''  Evaluation plans should describe a tracking system to measure the results of each component of the proposed project design including the financial components. The evaluation plan should identify the principal cause-and-effect relationships to be tested, demonstrate the applicant's understanding of the role and purpose of both process and outcome evaluations, and provide for semi annual program progress reports of lessons learned during the course of the project.

The applicant should identify a proposed independent third-party evaluator, or if not selected, identify the minimum qualifications and position description for the third-party evaluator (i.e., a person with recognized evaluation skills who is organizationally distinct from and not under the control of the applicant, and whose qualifications include successful experience in evaluating social services delivery programs and the planning and/or evaluation of programs designed to foster self-sufficiency in low-income populations). An independent third-party evaluator is responsible for analyzing and documenting the applicants proposed evaluation plans and delivering the findings of the results of the program in a project mid-term account and a final report to OCS.

Starting in FY 2008, CED grantees will be required to participate in compliance monitoring reviews, and in quarterly technical assistance conference calls.  Additionally, grantees will be required to participate in an annual collection of information about their project that has been approved by the Office of Management and Budget (OMB), and other limited surveys that request recommendations to improve the technical assistance support.

Definitions of Terms

The following definitions apply:

ALTERATION AND RENOVATION (A&R) - A &R may be classified as minor or major depending on the extent of the required work, its relationship to an existing structure and its cost.  Typically, major A & R is any aggregate cost greater than $150,000.

BENEFICIARY - A low-income individual whose income level does not exceed 100 percent of the official poverty line as found in the most recent revision of the Poverty Income Guidelines published by HHS.  These guidelines may be found at http://aspe.hhs.gov/poverty/index.shtml .

BUDGET PERIOD - The time interval into which a grant period is divided for budgetary and funding purposes.  The budget period for CED projects cannot exceed 60 months for construction projects and 36 months for non-construction projects.

CASH CONTRIBUTIONS - The grantee's cash outlay, including the outlay of money contributed to the grantee by third parties.

COMMUNITY - Any geographic area defined by specific boundaries.

COMMUNITY DEVELOPMENT CORPORATION (CDC) - A private, non-profit corporation governed by a board of directors consisting of residents of the community and business and civic leaders, which has as a principal purpose planning, developing, or managing low-income housing or community development activities.

COMMUNITY ECONOMIC DEVELOPMENT (CED) - A process by which a community uses resources to attract capital and increase physical, commercial, and business development and job opportunities for its residents.

CONSTRUCTION PROJECTS - Projects that involve the initial building or large scale modernization or permanent improvement of a facility.

DISTRESSED COMMUNITY - A geographic urban neighborhood or rural community with a rate of high unemployment and pervasive poverty.

EMPLOYMENT EDUCATION AND TRAINING PROGRAM- A program that provides education and/or training to TANF recipients, at-risk youth, residents of public housing, displaced workers, homeless and other low-income individuals, and that has demonstrated organizational experience in employment directed education and training for these populations.

EMPOWERMENT ZONE AND ENTERPRISE COMMUNITY PROJECT AREAS (EZ/EC) - Urban neighborhoods and rural areas designated as such by the Secretaries of Housing and Urban Development and Agriculture.

EQUIPMENT - The tangible non-expendable personal property charged directly to an award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.

EQUITY INVESTMENT - The provision of capital to a business entity for some specified purpose in return for a portion of ownership using a third-party agreement as the contractual instrument.

FAITH-BASED COMMUNITY DEVELOPMENT CORPORATION - A community development corporation that has a religious character.

HARD COST - Includes expenditures of construction or acquisition of real property and major alterations and renovations of real property.

HYPOTHESIS - An assumption made in order to test its validity.  It should assert a cause-and-effect relationship between a program intervention and its expected result. Both the intervention and its result must be measured in order to confirm the hypothesis. For example, the following is a hypothesis: "Eighty hours of classroom training will be sufficient for participants to prepare a successful loan application.''  In this example, data would be obtained on the number of hours of training actually received by participants (the intervention), and the quality of loan applications (the result), to determine the validity of the hypothesis (that 80 hours of training is sufficient to produce the result).

INDIRECT COSTS - Overhead costs of an organization that have been approved by HHS or other Federal agencies for use in applying for Federal funds.

INTANGIBLE PROPERTY AND DEBT INSTRUMENTS - Trademarks, copyrights, patents, and patent applications and such property as loans, notes and other debt instruments, lease agreements, stock and other property ownership, whether tangible or intangible.  Note: Grantees who use the CED funding to create intangible property or debt instruments must report to the Federal government on the continued use of these funds up to 12 years after the project period of the grant has ended.

INTERVENTION - Any planned activity within a project that is intended to produce changes in the target population and/or the environment for the purpose of job creation and can be formally evaluated. For example, assistance in the preparation of a business plan is an intervention.

JOB CREATION - New full-time, permanent jobs that did not exist prior to the start of the project and came about as a result of the start of the project.  These activities can include development of new business ventures, the expansion of existing businesses, or the development of new products and services.  The training and placement of individuals in already existing jobs, even jobs guaranteed to low-income individuals through a formal agreement with an employer is not considered job creation.

JOB PLACEMENT - Placing an individual in an existing vacant job of a business, service, or commercial activity not related to new development or expansion activity.  All jobs supported by the project must meet the definition of new job creation, not job placement.

LETTER OF COMMITMENT - A signed letter or agreement from a third party to the applicant that pledges financial or other support for the grant activities contingent only on OCS accepting the applicant's project proposal.

LOAN - Money given to a borrower under a binding pledge for a given purpose to be repaid, usually at a stated rate of interest and within a specified period.  The creation of a revolving loan fund with funds received under this program is an allowable activity.  Loans made to eligible beneficiaries for business development activities must be at or below market rate.  Interest accrued on revolving loan funds must be used to continue or expand the activities of the approved project.

MICROENTERPRISE - a commercial business with five or fewer employees, one or more of whom is the owner.

MICROLOANS - Loans made to microenterprise businesses and usually low interest loans of $25,000 or less.

NON-PROFIT ORGANIZATION - An organization (including a faith-based organization or community development corporation) exempt from taxation by reason of paragraph (3) of Section 501(c) of the Internal Revenue Code of 1986.

NOTICE OF FEDERAL INTEREST (NFI) - A lien or other notice of public record that an applicant must file when construction or major alterations and renovations begin or when an existing facility or land is acquired with Federal funds.

OUTCOME EVALUATION - An assessment of project results as measured by collected data that define the net effects of the interventions applied in the project.  An outcome evaluation will produce and interpret findings related to whether the interventions created the proposed jobs, or produced other desired changes.  An outcome evaluation should address any unanticipated outcomes.   It should answer the question: Did this project achieve its stated goals?

POVERTY INCOME GUIDELINES - Guidelines published annually by HHS that establish the level of poverty defined as low-income for individuals and their families.  The guideline information is posted on the Internet at the following address http://aspe.hhs.gov/poverty/index.shtml

PROCESS EVALUATION - A review and assessment of the planned activities implemented to produce the proposed outcomes (i.e., the creation of new, sustainable jobs).  Focuses on the effectiveness and efficiency of the program's activities and interventions (e.g., methods of recruiting participants, quality of training activities and usefulness of follow-up procedures).  It should answer questions such as:  Were the project activities comprehensive and were they implemented to achieve the desired outcome(s)?"  It is also known as formative evaluation, because it gathers information that can be used as a management tool to improve the way a program operates while the program is in progress.  It should also identify problems that occurred and how they were resolved and recommend improved means of future implementation.  In concert with the outcome evaluation, it should also help explain, "Why did this program work/not work?" and, "What worked and what did not?"

PROGRAM INCOME - Gross income earned by a grantee from Federally supported activities.

PROJECT PERIOD - The total time for which a project is approved for CED support, including any approved extensions.  For construction projects, the project period cannot exceed 60 months.   For non-construction projects, the project period cannot exceed 36 months.

REAL PROPERTY - Land, including land improvements, structures, and appurtenances (excludes movable machinery and equipment). Note: Grantees who use the CED funding to construct or provide major alterations and renovations or to acquire a facility or land for the project, must file a Notice of Federal Interest.

REVERSIONARY INTEREST - Protection of the government's interest in property acquired with Federal funds.  The applicant triggers reversionary interest once the assets obtained with grant funds are no longer needed for the originally authorized purpose of the project.

REVOLVING LOAN FUND - A distinct loan fund established exclusively for CED projects as a resource to pay for eligible business development and operational activities that, when repaid, generates additional program income to make new loans.

SELF-EMPLOYMENT - The employment status of an individual who engages in self-directed economic activities.  For FY 2008, OCS will not support self-employment activities or microenterprise business projects as a part of the CED program.  Applicants should consider the JOLI program if they wish to pursue this strategy. 

SELF-SUFFICIENCY - A state of being or status of an individual or family where by reason of employment, eligibility for public assistance is replaced by the ability to meet all basic needs.

SHAREHOLDER'S AGREEMENT - A binding arrangement among a company's shareholders that insures all shareholder rights are protected.  It specifies how the company should operate and the shareholders' rights and obligations (including what happens when the company is dissolved).  It also includes information on the regulation of the shareholders' relationship, the management of the company, ownership of shares and privileges and protection of shareholders.  The agreement includes sections outlining the fair and legitimate pricing of shares (particularly when sold). It also allows shareholders to make decisions about what outside parties may become future shareholders and provides safeguards for minority positions.

SITE CONTROL - Documented proof of applicant's ownership or control of the property where grant activities will be established.  Proof of site control includes: documentation of the specific property location (address, city, State); documentation of a signed and dated deed or lease agreement between the applicant and property owner; documentation in the agreement of the terms of the agreement, use of premises, and description of the site (prior use or new property, square footage, use of space for project).

STOCK - The purchase of a share of ownership of a company.  Stocks are sold by the original owner of a company to gain additional funds to help the company grow.

SOFT COST - Money expended that does not result in the acquisition of an "enduring" asset.  These expenditures would include: Architectural design and services, permits, fees, insurance, legal costs incurred in negotiating contracts, etc.

SOURCES AND USE OF FUND STATEMENT - The sum of committed resources (e.g. grant funds, donations,) for a specific project or activity and the extent to which these funds will be used (e.g., operating expenses, acquisition of capital,).

SUB-AWARD - An award of financial assistance in the form of money or property made under a CED award by a grantee to an eligible sub-grantee or by a sub-grantee to a lower tier sub-grantee. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, but does not include procurement of goods and services.  It does not include any form of assistance excluded from the definition of "award'' under Federal regulations at 45 CFR Part 74.  (Note: Equity investments and loan transactions are not sub-awards, these qualify as intangible property.)

TECHNICAL ASSISTANCE - A problem-solving event generally using the services of a specialist.  Such services may be provided on-site, by telephone, or by other means of communication. These services address specific problems and are intended to assist with immediate resolution of a given problem or set of problems.

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) - The Federal block grant program authorized in Title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Part A of Title IV under the Social Security Act), as amended.  The TANF program transformed "welfare'' into a system that requires work in exchange for time-limited assistance.

THIRD PARTY - Any individual, organization, or business entity that is not the direct recipient of CED grant funds.

THIRD-PARTY AGREEMENT - A written agreement entered into by the grantee and an organization, individual, or business entity (including a wholly owned subsidiary of a CDC), by which the grantee makes an equity investment of resources, or capitalizes a loan in support of grant purposes.  A loan commitment from a financial institution or memorandum of understanding from another community partner committing resources or capital is a typical third-party agreement.

THIRD-PARTY IN-KIND CONTRIBUTIONS - Non-cash contributions provided by non-Federal third parties that may be in the form of real property, equipment, supplies and/or other expendable property, and goods and services directly benefiting and specifically identifiable to the project or program.

An application may contain only one project. If an organization submits applications in response to program announcements for both CED and JOLI grant announcement, OCS will only award one grant in FY 2008 to a single organization that applies under either program announcements.  

In addition, an applicant must provide, prior to receiving funding, evidence of control over the physical location of the project where it will conduct job creation activities; e.g., leasing agreement or deed.