Archive for the ‘economy’ Category

When it comes to nonprofits and their tax-exempt status, faith-based organizations (FBOs) must be especially careful when they decide to go beyond “having church” to providing services that benefit the community overall.  For example, when a FBO decides to go from developing Sunday School curriculum for its own use to developing and selling biblical children’s stories to be used by the general public…or when a FBO expands its transitional housing efforts from housing the homeless in their multi-purpose building to providing shelter in homes the FBO has purchased…or when a FBO intends to purchase land not just for a new church building but for other uses such as senior housing and small-shop retail…and the list can go on.

Even though the examples given above can be deemed as extensions of the FBOs overall mission, these “extensions” may be viewed by the Internal Revenue Service differently.  In fact, there are many recent examples of FBOs and their leaders being investigated by the federal government questioning their tax-exempt status.  Ultimately, these investigations were dropped, but the fact remains that as budgets tighten at the federal and state levels, government bodies will continue to aggressively seek additional sources of revenue and FBOs will continue to be potential targets as the line blurs between their charitable and auxiliary activities.

One way to address this possibility is for FBOs to establish independent organizations that can facilitate these activities without jeopardizing the FBOs tax-exempt status.  For example, using the “bible children’s stories” example from above, I would recommend that the FBO create a separate entity (e.g., a publishing company) that would develop, market and sell the products so that the tax-exempt status of the FBO would not be put into question – especially when the income of the publishing company begins to increase substantially.  In addition, if the FBO intends to secure grants for various charitable activities that will benefit the community as a whole, many philanthropic organizations cannot award grants directly to FBOs, but can make awards to non-profit organizations that facilitate these charitable activities.

The examples given above are merely for illustration and not intended to be definitive.  Case law is constantly evolving in this area, so please consult with a local attorney or CPA who can help you wade through these waters.  If you have questions or comments that would help broaden this discussion, please respond.

Be strong and be blessed!


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According to the U.S. Department of Labor, Labor Day is a creation of the labor movement and is dedicated to the social and economic achievements of American workers.  It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country. [1]

As we approach the Labor Day holiday, I can’t help but to think about how blessed I am to be employed.  I would consider myself a “modern-day employee” in that for much of my career history, I sought out opportunities to expand my skill set either through a new position with my present employer, with a new employer or through entrepreneurship.  With this strategy, I have been blessed to have gained a wide variety of experiences, with a primary focus on community and economic development.  Nevertheless, there have been times when, unfortunately, I did not receive a steady paycheck or the entrepreneurial pursuit did not turn out as I expected.  Through it all, God provided for me and my family and I thank Him for that!

I, also, can’t help but to reflect on those who are unemployed or underemployed.  As of this writing, the unemployment rate in the U.S. stands at 9.1% (August 2011).  There are more than 13 million people who are seeking full-time employment, but have been unsuccessful for a number of reasons (e.g., jobs moving to lower cost locations, skills mismatch, etc.).  This has implications for all areas of the economy, including homeownership, meeting basic needs, obtaining the training needed for today’s jobs, and others.  With the current direction of federal and state governments to reduce spending at all costs, the work and mission of nonprofits become even more important.  Nonprofits have to become even more efficient in their operations and programming to address the ever-increasing needs of its target population, constituency and community.

Do not become discouraged in the present state of affairs, but rather use this time to be more creative in meeting the need and more emboldened in requesting and securing assistance for your efforts.

Please pray with me that the unemployed, employers, government leaders, nonprofits and other willing participants will work together to improve our economy and increase meaningful opportunities!

Be strong and be blessed!

[1] – U.S. Department of Labor (http://www.dol.gov/opa/aboutdol/laborday.htm)

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We’ve discussed a number of topics over the past few months pertaining to community economic development (CED) – from identifying key partners to embracing fundraising to recognizing the important role of the legal profession.  However, we must not forget that at the end of the day, community economic development is a “people business”.  It takes knowledgeable people to create and implement policies and procedures that positively affect communities.  It takes observant people to see how local decisions and regional trends will affect them and their communities.  It takes a giving person to look beyond themselves and see how they can help improve their communities.  In other words, the basic infrastructure for successful CED is made up of the development of the people who live in that community.

I will be the first one to admit that I am not a psychologist, sociologist or have any other expertise in the study of people.  However, I believe there are a number of ways that individuals can prepare themselves physically, mentally and spiritually for the work of CED.  A few are listed below:

  • Gain knowledge – We’ve all heard that “knowledge is power”, and this is especially true when it comes to CED.  Individuals must become knowledgeable about issues such as available resources, trends in the economy, who to contact for assistance, and new laws that can affect your work.  The more people who have relevant knowledge, the better.
  • Get control of your personal finances – The issue of debt is something that people generally don’t discuss because it’s so personal and, sometimes, embarrassing.  I’ve experienced personally how excessive debt can be an “albatross around your neck”!  It can, for example, hinder your ability to support local businesses, one of the building blocks of CED.  If you have better control of your personal finances, you will be in a better position to buy a home, expand your education or even start a business.  For many years, Black Enterprise Magazine has led a campaign to encourage individuals and families to improve their financial status and has recently initiated a Financial Fitness Contest.
  • Give – I believe that a person (and a community) that is focused on giving will generate not only goodwill, but increased resources as a result.  The Bible speaks about giving numerous times throughout the text.  Examples include the following:

–  “Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you” (Luke 6:38 NIV).
–  “‘Bring all the tithes into the storehouse, That there may be food in My house, And try Me now in this,’ Says the Lord of hosts, ‘If I will not open for you the windows of heaven and pour out for you such blessing that there will not be room enough to receive it'” (Malachi 3:10 NKJV).
–  “But this I say: He who sows [plants, gives] sparingly will also reap [gather, gain] sparingly, and he who sows bountifully will also reap bountifully” (2 Corinthians 9:6 NKJV) [Comments added].

In short, a discussion of the “macro” issues of CED should begin with a discussion of what it takes to improve the health and wellbeing of those on the “micro” level – its people.

Be strong and be blessed!

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The answer to the question posed in the title is not apparent…until I share with you a couple of books I have read (or am currently reading).

To Right These Wrongs by Robert Korstad & James Leloudis
I heard about this book on WUNC (our local NPR station) on a Saturday morning a number of months ago and was interested in buying it, but didn’t at the time.  I was re-introduced to the book at a recent meeting (thanks, Jeanne Tedrow!) and was encouraged to read it.  To Right These Wrongs tells the story of the North Carolina Fund, described in the book’s Introduction as “a pioneer effort to improve the lives of the ‘neglected and forgotten’ poor in a nation that celebrated itself as an affluent society”, which was used as a “laboratory” in the mid-1960’s for President Lyndon Johnson’s Great Society and its war on poverty.  This five-year effort brought together civic leaders – men and women, black and white – from across the state to work toward correcting the ills brought on by discrimination and poverty.  Even though their efforts were groundbreaking and their lasting effects are still being felt today, they came to understand that it would take more than “charity and self-help” to alleviate poverty.

don’t think of an elephant! by George Lakoff
If someone were to tell you “Now, don’t think of an elephant.  Whatever you do, DON’T THINK OF AN ELEPHANT!”  What are you going to do…of course, think of an elephant!  This book speaks to the importance of uniquely “framing” your message and that trying to use an opponent’s message against them by using their “frames” only reinforces their message.  An example of this is the use of the term “tax relief” for “tax cut”.  When you are “relieved” of something, this suggests that you were previously “burdened” and that, in this case, taxes are a burden to be relieved of.  The question of what expenses get reduced (or how much debt to take on) to offset these tax reduction efforts (e.g., military vs social programs) become the battleground issues.  In fact, Democrats began using the term when trying to counteract the Republicans message, which only reinforced the need for “relief”.  Whether you are a Democrat or Republican, or consider yourself conservative, liberal or progressive, this book helps to show the importance of creating your own “frames of reference” in shaping your message.

Both of these texts highlight the importance of not only creating effective policies for the “change you want to see”, but that effective communications are just as important and that how you craft your message can go a long way toward your level of success.

Be strong and be blessed!

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Just before the federal government was scheduled to shut down, a deal was struck to keep the government “open for business”, while implementing a spending package that has been described as “historic”.  I applaud the Herculean efforts of President Obama, House Speaker Boehner, Senate Majority Leader Reid and staff members in getting a deal done before the shutdown deadline.

I have to admit I have mixed emotions.  On one hand, I’m happy for the hundreds of thousands of federal workers that would have been furloughed during a shutdown, including many of my colleagues.  Talk that a prolonged government shutdown would have hindered the country’s economic recovery has been put on the shelf.  Services that many people rely on for everyday survival will continue (I hope!).

On the other hand, I’m cautious because as of the writing of this blog entry, few details of the spending plan have been made public.  What programs are included in the $38 billion “cut” package?  Who will bear the burden of these reductions?  Will the economic recovery of those who are most in need be hindered?  How will the faith-based and non-profit communities be affected?

As we’ve all heard before, the “devil’s in the details”.  Oh, by the way, these discussions are only the beginning – negotiations on raising the debt ceiling and the 2012 federal budget loom just around the corner.  It will continue to be interesting times – stay tuned!

Be strong and be blessed!

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Unless you’ve been “living under a rock” (ala GEICO), events in Libya, Egypt, and Japan as well as other areas in the Pacific are rocking the world in profound, historic ways.  Each have at least one thing in common – there was very little warning to the average person of the events that occurred and the speed at which change happened.  For example, it was reported that the waves from the tsunami resulting from the Japan earthquake traveled at more than 600 miles per hour – faster than a commercial jet – and reached the west coast of the United States within a few short hours!  I pray that democracy and peace prevail in the Middle East and that the rescue and recovery efforts go smoothly in Japan and elsewhere.

However, there is a “tragedy” that’s brewing in the halls of Congress and other seats of power in the United States.  The difference between this “tragedy” and the ones mentioned above is that we are being warned of what may occur.  At this time, programs that assist those who are most vulnerable economically are being considered for massive budget cuts – programs such as the Community Development Block Grant (CDBG) program, Neighborhood Stabilization Program (NSP), and others.  In North Carolina, funds that help support organizations that work within majority-minority communities are on the “chopping block” – not just for budget cuts, but are being “zeroed” out!  This comes at a time when foreclosures continue to rise, unemployment rates are high and stagnant, and overall costs are rising (how much more are you spending to fill your car up? :().

I recognize the need for all of us to “tighten our belts” during times of scarcity and that the burden and sacrifice should be borne equitably.  However, it is a shame that programs such as the ones mentioned above and the communities they serve tend to bear the brunt of the burden during lean AND prosperous times (e.g., urban renewal in the ’60s and ’70s).  I encourage you to learn about what’s being considered and discussed at your local, state, and national government levels and get involved to make the change you want to see!

I hope that cooler heads prevail in that as budget talks proceed, that a disproportionate amount of sacrifice is not borne by those who can least afford it.

Be strong and be blessed!

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Traditionally, economic development has focused on increasing jobs by recruiting companies from City A to City B as well as (to a lesser extent, but with greater emphasis recently) growing jobs from within through entrepreneurship.  To support job and population growth, communities have worked to improve all elements of their community, including improving housing stock, improving education, reducing crime, and so on.

However, there are many communities in the U.S., even communities-within-communities, where increasing economic tides don’t “raise all boats” equally and when the overall economy “catches a cold”, these communities “catch the flu”.  Many of these communities are disproportionately lower income with higher percentages of people of color.  Many suffer with higher unemployment rates, higher rates of crime, lower education levels and other such measures that, when using traditional benchmarks, can make these communities unattractive for future economic investments.

But, as I’ve seen in many communities I’ve worked with over the last 15 years, there are many dedicated individuals and organizations working to improve the economic condition of these traditionally disenfranchised communities – and I applaud them!  Even with these efforts, I believe there are still “unrealized opportunities” that are hindering these communities from reaching their full potential.

Over the next few posting, I will highlight the “unrealized opportunities” and challenges of what I call “anchor community institutions”:

  • Churches/Religious Institutions
  • Universities
  • Nonprofit Organizations

Send me feedback about the good work of organizations that are improving the economic conditions of disadvantages communities and I just might highlight them here.

Be blessed!

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