The State of Local Business Development Funding in 2024

Emerging Trends in Community/Economic Development FundingThe landscape of Community/Economic Development is shifting due to evolving policy priorities and market demands. The recent emphasis on diversifying the science, engineering workforce has led to an increased focus on community development initiatives that support underrepresented groups. As a result, funders are now prioritizing projects that address systemic barriers to equity in these fields.One notable trend is the growing importance of community development block grants (CDBG). These grants, funded by the US Department of Housing and Urban Development, support community development activities such as affordable housing, anti-poverty programs, and infrastructure development. The CDBG program has been instrumental in fostering economic growth in disadvantaged communities. Applicants should be aware that the CDBG program has specific requirements, such as the need to benefit low- and moderate-income persons.Another trend is the increasing recognition of the role that partnership development grants can play in driving economic development. By fostering collaborations between community organizations, local governments, and private sector entities, these grants can help leverage resources and expertise to achieve greater impact. The USDA Rural Development Grant program is an example of a partnership development grant that supports rural community development initiatives.The Grants for Diverse, Capable Science and Engineering Workforce program, funded by the Banking Institution, is a prime example of this trend. With funding ranging from $30,000 to $1,000,000, this grant program seeks to build on prior research concerning gender, racial, and ethnic equity in the science, engineering workforce. Applicants should be aware that this program has specific requirements related to addressing systemic barriers to equity.## Operational Challenges in Community/Economic DevelopmentDelivering effective Community/Economic Development projects can be challenging due to various operational constraints. One verifiable delivery challenge unique to this sector is the need to navigate complex regulatory requirements. For instance, the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) is a federal regulation that applies to CDBG-funded projects, requiring grantees to provide relocation assistance to displaced persons.Staffing and resource requirements are also critical considerations. Community/Economic Development projects often require a diverse range of skills, including project management, community engagement, and financial management. Applicants should be prepared to demonstrate their capacity to deliver projects effectively, including their ability to manage grant funds and comply with relevant regulations.## Risk Management and ComplianceCommunity/Economic Development applicants face several eligibility barriers and compliance traps. One key risk is the potential for non-compliance with federal regulations, such as the URA. Applicants should be aware of the specific requirements associated with their funding source and ensure that they have the necessary expertise and resources to comply.In addition, applicants should be aware that the CDBG program has specific eligibility requirements, including the need to benefit low- and moderate-income persons. Failure to meet these requirements can result in funding being withheld or revoked.To mitigate these risks, applicants should carefully review the terms and conditions of their funding agreement and ensure that they have a robust compliance framework in place. This includes having adequate financial controls, project management systems, and reporting mechanisms.## Measuring Success in Community/Economic DevelopmentThe Grants for Diverse, Capable Science and Engineering Workforce program requires grantees to report on specific outcomes and KPIs. Applicants should be prepared to demonstrate how their project will contribute to the program's goals, including building a more diverse and capable science, engineering workforce.Required outcomes may include metrics related to project participation, job creation, and economic growth. Applicants should be aware that the funder will be monitoring progress against these outcomes and that failure to meet them may result in funding being withheld or revoked.Q: How do I determine whether my community development project is eligible for CDBG funding? A: To be eligible for CDBG funding, your project must benefit low- and moderate-income persons, among other requirements. You should review the CDBG program requirements carefully to determine whether your project meets the eligibility criteria.Q: What types of partnership development grants are available for community economic development initiatives? A: There are several types of partnership development grants available, including the USDA Rural Development Grant program. You should research the specific requirements and eligibility criteria for each program to determine which ones align with your project's goals.Q: How will I be required to report on my project's outcomes under the Grants for Diverse, Capable Science and Engineering Workforce program? A: The funder will require you to report on specific outcomes and KPIs, including metrics related to project participation, job creation, and economic growth. You should be prepared to demonstrate how your project will contribute to the program's goals and report on your progress regularly.