Five Funding Strategies to Help Organizations Leverage Public Funds

What type of catalytic philanthropic investments are needed to make public resources flow to community organizations and projects? We interviewed nearly a dozen practitioners from across the state to answer this question.

Here are five ways to help grassroots community development organizations effectively advocate for, absorb, and deploy public resources for community-led development.

1. Fund emergent and adaptive group processes

If you aim to develop a funding strategy designed to address systemic inequities, attention to group processes is critical. Group processes should seed trust and expand a sense of agency among residents and community leaders that they have the power to change failing systems. This work can look like creating spaces for sharing stories, analyzing data, learning from similarly situated communities, and visioning. Once a strong foundation is built, groups need technical support to develop an actionable strategy to realize their vision. Group processes should allow players to adapt to changing conditions and let solutions emerge over time. Cultivating an adaptive stance helps groups pivot as new needs and opportunities emerge.

2. Invest in technical assistance and capacity building

Nearly all emerging community-based development organizations highlighted the need for sustained technical assistance investments and deeper capacity building investments. 

Access to flexible, multi-year funding for technical assistance and capacity building helps groups respond in an agile and nimble way. This is especially important for organizations operating in places with weaker development ecosystems that need more organizations, like community development corporations, community land trusts, or CDFIs. Emerging organizations in areas outside of coastal California will need long-term, flexible resources to build up their ecosystem’s capacity and political will to advance community-led development solutions. Building up the knowledge, resources, and staffing to go after public funds is critical to community-based organizations successfully securing public resources.

3. Resource network and ecosystem organizations

Ecosystem-level organizations act as the connective tissue between initiatives, serving multiple organizations bound by shared needs and interests, such as geography or identity. Funding ecosystem-level organizations has the potential to create a multiplier effect, building relationships, political will, and shared vision across many organizations. These organizations provide critical support in areas where organizations have deep knowledge of the needs of their communities but lack the expertise to implement community development initiatives. Ecosystem-level organizations can help coordinate across organizations, build relationships, and advocate at the state or regional level for multiple organizations.

4. Fund revolving funds to accelerate deals and bridge funding gaps

Liquidity, the ability to quickly access cash, is one of the most significant barriers to entry within development spaces. Our interviewees identified three key liquidity challenges related to their ability to access public dollars:

• The public sector’s lengthy reimbursement process is prohibitive for many organizations.

• An inability to compete with private market actors because of the time it takes to assemble capital for property acquisition.

• A lack of “just-in-time” funds to help organizations seize unforeseen opportunities. 

The work of figuring out how to position flexible capital closer to grassroots, BIPOC, and frontline communities is essential for advancing equitable development. Ideas for how to deal with these challenges include bridge loans for government contracts or accelerator funds. For more ideas, check out our report!

5. Support direct investments in development deals and economic initiatives

Project subsidies are far and away the most elusive, challenging, and necessary type of financial support needed for successful project implementation for housing production and property development. 

Three major areas for attention include: 

• Low cost loans with flexible terms; 

• Aligning your grant or investment terms so that your funds can be used alongside government funding sources; 

• Providing more generous funding for BIPOC developers. 

Check out our article Funding Community-Led Development: Five Funding Strategies to Help Organizations Leverage Public Funds for specific examples of funding opportunities related to the five strategies above.