In 1994, the South Carolina Association of Community Development Corporations was established by four local community development corporations to advance the interests of their industry. But the state’s community economic development industry truly got its start when residents rallied to help each other rebuild after devastation. The organization has since renamed itself South Carolina Association for Communtiy Economic Development (SCACED). This year, SCACED is celebrating its silver anniversary. The Babcock Foundation asked SCACED President and CEO Bernie Mazyck to reflect on 25 years of advancing social and economic justice in South Carolina. We also wrote about the network for this companion piece to this interview.
Describe the history of the community economic development movement in South Carolina.
The community economic development movement was born out of one of the most devastating natural disasters ever to strike South Carolina. In 1989 the nation and world responded to Hurricane Hugo with millions of dollars in private contributions, federal assistance and volunteer support. Most of the resources went to established organizations and urban areas, neglecting less populated places and small community-based groups. Undaunted, people in rural and low-wealth communities, regardless of race, ethnicity, economic status or gender, came together to help their neighbors rebuild, contributing whatever skills and resources they could. This self-directed approach to community revitalization was critical to the recovery effort. Several Charleston-area leaders decided this collaborative, community-based work was too precious to let dissipate and sought to perpetuate it. With funding from the Charles Stewart Mott Foundation, then-mayor Joseph P. Riley Jr., then-executive director of the Coastal Community Foundation Ruth Heffron and other leaders sought someone to design and implement the program and recruit leaders. The resulting initiative, called the N.E.W. Fund (Neighborhoods Energized to Win), recruited and trained grassroots leaders in an approach called asset-based community development (ABCD) and provided them with small grants. This effort was very successful in empowering local leaders to design initiatives based on their neighborhoods’ priorities, including parks, playgrounds, community gardens and youth programs. The Coastal Community Foundation invited ABCD pioneer Dr. Jody Kretzmann to present to leaders, and the founders of the community economic development movement adopted the ABCD model.
Hugo sparked another phenomenon. In many places, families in wealthy, gated communities were living right next to dilapidated homes with no access to public water or sewer services. The storm’s powerful winds removed trees and heavy vegetation that separated them, opening people’s eyes to the lack of affordable, safe and sanitary housing throughout South Carolina. A growing chorus of voices advocating for investments in quality housing coincided with the creation of an empowered grassroots network of community leaders, and the first community development corporations were established to address housing issues at the local level and lobby state lawmakers to authorize a housing trust fund. This set the stage for two key pillars of the community economic development movement in South Carolina: community capacity building of locally controlled nonprofits, and public policy advocacy.
In 1994, four CDCs established the South Carolina Association of Community Development Corporations. The leaders of these start-up organizations were visionaries, but they had no idea 25 years later, this network would comprise 100 organizations committed to expanding wealth, employment and ownership opportunities for families and individuals across the state. Among them are 23 state-certified CDCs and community development financial institutions, high-impact organizations with a demonstrated ability to produce projects and programs, attract capital and lend sustainably to individuals, small businesses and nonprofits. In 2014, the network rebranded as the South Carolina Association for Community Economic Development to reflect the true composition of the industry and recognize a greater array of partners, members and supporters. Our mission is to raise the quality of life for low-wealth families and communities by advancing the CED sector through advocacy, training grassroots leaders and organizations, and offering technical assistance and access to capital.
How does the CED infrastructure in South Carolina operate?
The complexities that make progress difficult in under-resourced and racially segregated communities demand a comprehensive approach. SCACED has cultivated a network of CDCs, CDFIs, banks, local governments, private corporations, donors and other stakeholders who work collaboratively and strategically to develop and invest in projects that capitalize on communities’ existing assets.
That includes real estate projects like affordable housing, buildings for small businesses, public facilities, and land assets designed to help families build wealth and transition from poverty to prosperity. It also features programs designed to help people access and effectively use capital, including financial literacy and education, savings programs, entrepreneurship training, workforce development and wealth-building tools.
As mentioned above, advocacy for state and local policies that support CED is a key element of this model. In 2000, the General Assembly passed the landmark South Carolina Community Economic Development Act, authorizing $10 million in grants, loans and tax credits to certified CDCs and CDFIs. A $5 million tax credit has attracted more than $15 million in private investments in low-wealth communities through certified CDCs and CDFIs, which leveraged an additional $85 million in capital. This incentive provides investors a 33 percent state income, corporate or bank tax credit, proving investors can receive returns on investments in low-wealth communities. The CED Act has a five-year sunset, so our industry mobilizes regularly to advocate for its reauthorization.
A relatively new approach showing great promise is the collaboration of CDCs and CDFIs on local projects to accelerate community transformation. Examples include Homes of Hope and Anderson Interfaith Ministries in Anderson; Soteria CDC and CommunityWorks in Greenville; Northside Development Corporation and South Carolina Community Loan Fund in Spartanburg; and SCACED, Homes of Hope, Increasing HOPE and Center for Heirs Property Preservation in developing the Opportunity Center in North Charleston. Different organizations bring a variety of skills to a project, strengthening areas that might be missing by another member of the team.
SCACED plays critical roles in the network. We serve as a statewide trade association and funding intermediary for CDCs, CDFIs and CED stakeholders. We represent their interests and increase the participation of financial institutions by facilitating public/private partnerships. The association also educates the state legislature, agencies, local governments, foundations, religious groups, schools and lending institutions about ways they can create opportunities and facilitate community-based economic development.
What are some specific ways the CED network has improved communities?
To track progress toward our mission, SCACED measures homeownership, business development and financial security. Our network has helped create more than 5,000 jobs, build or rehab more than 1,000 houses and generate an economic impact of more than $300 million. According to the Census Bureau, South Carolina now has a homeownership rate of 71.7 percent, considerably higher than the national rate of 64.8 percent. This high homeownership rate, in turn, grows jobs and businesses through housing rehabilitation, energy efficiency retrofits and clean energy enterprises.
The numbers tell only part of the story. The true impact is that people, regardless of economic status or cultural identity, are empowered to improve their lives and the conditions in their communities. In Spartanburg, Northside Development Corporation helped start the Northside Initiative to radically address the lack of affordable housing, retail space and minimal economic opportunities in the Northside area. It has attracted capital for Harvest Park, CHOICE Neighborhood Planning and Franklin School, bringing quality affordable housing, healthy foods and education.
The Chicora Cherokee community of North Charleston is the poorest neighborhood in South Carolina. A leader in ABCD rooted in faith, Metanoia relied on community members’ knowledge and expertise to start an after-school youth program. Over the years, Metanoia has evolved to include community gardens, affordable housing, financial literacy, youth entrepreneurship, community organizing and much more.
How does the network advocate for policies that advance (and do not impede) economic justice?
From leadership development and community organizing to strategic messaging and policy advocacy, SCACED helps members promote equitable policies conducive to economic justice. Our network of advocates is grounded in the asset-based principles of community economic development. We do not speak about communities in terms of deficits; we speak about places of unrealized opportunity and potential. From CDC customers to board members who govern some of the largest companies in South Carolina, all are speaking as one voice about the need for accessible capital and capacity in low-wealth communities.
SCACED helps members engage their elected officials, invite them to tour their offices and witness their ribbon cuttings, programs and good work. This has given rise to a network of people empowered to leverage relationships in local and state government. We also create opportunities to connect with policymakers, including an annual legislative event attended by 65 percent of the General Assembly, where we share the sector’s successes and upcoming policy priorities and present a Legislator of the Year Award. Our advocacy has helped reauthorize the CED Act four times and create a state earned income tax credit. The EITC is non-refundable, but we’re advocating for a refundable credit so more families can take advantage of it.
How does the network develop leaders?
Since its inception, SCACED has sponsored a variety of trainings, including the CED School, The Governor’s School, Grassroots Leadership Institute and the Community Development Institute. Each helps CED practitioners implement projects, programs and products. SCACED creates forums for members to hone their leadership skills, including teaching opportunities, scholarships to national trainings, speaking slots at conferences, and board and committee assignments. But it goes further than that: Leadership also involves advancing CED as a model for poverty alleviation, advocating for the right kinds of policies (local, state, federal and corporate), and elevating community-based economic development as a mainstream approach to economic prosperity.
How does CED connect to social justice?
As Equal Justice Initiative Founder Bryan Stevenson says, “The opposite of poverty is not wealth. The opposite of poverty is justice.”
Poverty in the United States is rooted in a broad range of inequities: scant education funding in poor areas, tax codes that favor the rich, food policies that negatively impacts the poor and a criminal justice system that overpoliced communities of color and disconnects low-wealth people from effective representation. These modern disparities compound the harmful legacies of slavery and racial terrorism, and the systemic racism woven into the American fabric. Our economic system is predicated on a zero-sum game designed to be won by the well-resourced, well-connected and well-off.
One common practice that strips wealth from hardworking individuals and traps them in economic quagmires is predatory lending. According to research from Pew, 12 million adults, or about 5.5 percent of Americans, use payday loans, short-term loans of a few hundred dollars with fees and interest equivalent to an annual percentage rate of nearly 400 percent. This leaves financially vulnerable families with fewer resources to build assets and climb the economic ladder. The likelihood of resorting to payday lending is:
- 57% higher for renters than for homeowners
- 62% higher for people earning less than $40,000 than for those earning more
- 82% higher for people without a college degree than for those with a four-year degree or higher
- 105% higher for blacks than for other races/ethnicities
One data point stands out: Homeownership was an even more powerful predictor of payday loan usage than income. Eight percent of renters earning between $40,000 and $100,000 have used payday loans, compared with 6 percent of homeowners earning between $15,000 and $40,000. The community economic development landscape provides alternatives to predatory lending through CDFIs and credit unions, local lenders who are mission-bound to provide responsible, affordable financial services to their neighbors.
Economic mobility is another connection between social justice and CED. A research team led by Harvard economics professor Raj Chetty recently released a major study titled, “Race and Economic Opportunity in the United States: An Intergenerational Perspective.” It found all racial and ethnic groups are moving up in income distribution across generations, except black Americans and American Indians. Especially alarming was the finding African-American boys from affluent households fared worse in economic mobility than their white counterparts from low-income families. The study provided evidence of systemic racial bias against African Americans, especially boys and men, that if not corrected will produce a permanent underclass.
Data about mass incarceration, police shootings of African Americans and the school-to-prison pipeline reveal more evidence of inequities and injustices. People with fewer economic opportunities are often relegated to overpoliced communities where they are often prosecuted for minor offenses. With unfair sentencing practices and inadequate legal representation, these charges often result in longer prison sentences. People with criminal records find themselves unable to secure employment that provides a livable wage, sinking them deeper into financial desperation, which could land them back in prison. This vicious cycle has a higher incidence in African-American and Latinx communities. Economic and criminal justice reform should be the clarion call for a civil rights movement for the 21stcentury.
The programs, practices, products and policy priorities of CED create a foundation on which poor and marginalized persons can stand. CED also serves as a bulwark against injustices, predatory practices and inhuman treatment of the poor. At the time of his assassination, Rev. Dr. Martin Luther King Jr. was in Memphis to support sanitation workers demonstrating for a living wage, and he was planning a "Poor People’s Campaign.” Had he lived, it is believed Dr. King would have turned the civil rights movement toward economic justice.
How can funders who see CED intersecting with their missions get started?
The success of this network would not be possible without consistent support from a number of funders. Not long after the Mary Reynolds Babcock Foundation took a chance on a fledgling organization with no base of support, BB&T, Wachovia and a few other funders stepped up to the plate.
SCACED provides a variety of ways for funders and other stakeholders engage the CED sector in South Carolina. We can organize site visits and host conferences and trainings that attract hundreds of practitioners. SCACED’s Community Development Institute comprises eight sessions in 2019 which rotate to various regions of South Carolina. Funders can participate in these trainings and meet with practitioners, CED customers, supporters and stakeholders. This year, SCACED’s annual conference, Opportunity SC, takes place in November in Charleston. Funders are invited to attend, present and sponsor the conference. SCACED also hosts an annual Legislative Luncheon, where CED practitioners and leaders have the opportunity to tell their stories of success and interface with members of the General Assembly. Of course, the easiest way for funders to get started with CED in South Carolina is to contact SCACED, and we are more than happy to help them engage with the CED sector in South Carolina.
- Affordable Housing
- Capacity Building
- Democracy/Civic Engagement
- Economic Development
- Mission Investing