By definition, virtually every community development loan or investment activity will have a social mission, such as providing affordable housing for low- and moderate-income persons, revitalizing distressed commercial or residential areas, or providing loans to small businesses. Social work has become an integral part of the development activity, and many new projects combine health care, day care, technical assistance or education programs as part of the project requirements. Most experts would argue that without these programs, community development projects will never meet their full potential. However, by its very nature community development lending and investment activity is financial, not social. Indeed, without a sharp pencil and attention to the financing details, very few projects will make it off the ground or sustain themselves over the long run.
While recognizing that the social aspects of community development activity are critical to a project's long-term success, this issue of Partners takes a look at the financial angle of community development activities. Beginning with information on how to make community development loans and investments, the newsletter also provides insight into why some loans are not made, and why other loans go bad. Hopefully, the discussion presented will encourage safe, sound and profitable community development lending.