Criteria for Funding
see also Financial Support & Financial Tools
LISC’s mission is to revitalize distressed neighborhoods into healthy communities. We do this primarily by building the local capacity of neighborhood or community-based development organizations, also known as Community Development Corporations (CDCs), to implement housing, commercial, industrial, and small business development appropriate to their communities. Duluth LISC’s business-oriented philosophy is reflected in the qualifications for funding.
Through focused support for nonprofit CDCs, LISC endeavors to increase their capacity for long-term development by improving their income-producing potential, deepening their experience with larger-scale projects, strengthening their systems for management and financial control, and building partnerships with local businesses, financial institutions, foundations, and government. Duluth LISC also works with other nonprofit, public sector and private development partners on project-specific development efforts that meet community needs.
Projects:
LISC invites creative proposals for the implementation of specific development projects. While it has not established minimum project requirements, the following factors are significant:
- The prospect for improving economic and physical conditions in the community. (e.g., employing residents, housing low-income people, or enhancing safety in the neighborhood);
- The potential for advancing the capabilities and self-sufficiency of the CDC and participants involved in the proposed project;
- The project’s financial feasibility, with regard for the reasonable risks of community development;
- A strategy for collaborating with the private and public sectors. (Brief letters from groups that collaborative on a project, outlining how they will work together are required prior to funding approval); and
- Leveraging LISC’s investment in combination with other funding sources.
Organizations:
In providing financial support, LISC identifies and works with CDCs with proven effectiveness in aspects of community development or which show exceptional promise for implementing a project. CDCs applying for funding should meet the following criterion, although flexibility will be considered in the use of this criterion:
- Are a nonprofit, 501(c)(3) organization engaged in the development of affordable housing, vital community facilities, and/or job-creating commercial, small business, or industrial projects in the Duluth area (Duluth, Hermantown, and Proctor).
- Are able to describe their “local community” and have a written vision that shapes their future relationship with that community. In the case of neighborhood-specific organizations, they should have a strategy for neighborhood revitalization.
- Have a mission reflecting community needs and how they address this need.
- Are community-based, as reflected by the composition of their staff and governing board.
- Have financial accountability demonstrated through submission of a project budget and the last two years audits.
- Demonstrate successful collaborative efforts with other neighborhood and/or community organizations and the public sector.
- Have a strong commitment to involving and developing grassroots leadership. They must also strive to incorporate participation by residents, organizations, and institutions in their programs and the decision making aspects of their organization.
- Internship grants of up to $3,500;
- Grant funds for strategic planning, staff training on development issues and organizational capacity building;
- Recoverable grants (0% interest loans) for housing or mixed-use activities;
- Operating support funds (salary and fringe) for selected CDCs through a competitive process;
- Acquisition and Predevelopment Loan Funds (5% interest predevelopment loans for affordable housing);
- Short-term, low interest loan funds for development projects including housing, commercial, economic development, mixed use, public facilities and child care projects/programs;
- Project-specific loan guarantees and targeted lines of credit for high performing CDCs;
- National Equity Fund-equity investment in affordable housing developments; and
- New Markets Tax Credit investment.
Financial Tools
Access to flexible financial resources is essential for CDCs to make critical neighborhood revitalization projects happen, especially in the early stages of development. Duluth LISC fills financing gaps and helps CDCs leverage other sources of capital by providing early, higher-risk capital to affordable housing and commercial/retail projects. Currently, LISC’s financial tools include: Feasibility and Technical Assistance Grants, Predevelopment Recoverable Grants, Loans and Loan Guaranties, and Equity.