by Courtney Dufries
It may be impossible to accurately capture the full effects of community development lending and investment activity because it is impossible to quantify pride, self-esteem, quality, and other intangible benefits. Simply put, community development work is much more than just finances. For an effort to be considered fully successful, consideration must also be given to education, health care, social work, land-use planning, environmental issues, neighborhood organizing, criminal justice, athletics, and the arts, to name just a few of the many disciplines that should be involved
However, it is desirable to at least gauge some of the economic impact of community development activities because the impact is frequently phenomenal. Finding the right measure is challenging. Experts will monitor increases in the number of building permits, changes in zoning requests, reductions in crimes reported, unemployment rate changes, tax receipts collected, changes in median incomes, reductions in public benefit payments, reductions in food stamps distributed, and many other measures just to gauge some of the benefits from their work. Each measure tells a different part of the story, and many are appropriate because no one measure can capture the whole story.
One way to measure the overall impact is through the multiplier effect. This issue of Partners features an article on measuring economic impact and another on the economic multiplier effect. The first article, Measuring Economic Impact, explains the concepts behind the types of impact, and the second article, The Multiplier Effect at Chattanooga Neighborhood Enterprises, presents a study from Dr. Marilyn Helms at the University of Tennessee about the $50 million impact just one nonprofit organization made in 1997.
As presented in the study, the multiplier effect shows how $21.5 million in expenditures in fiscal year 1994 actually had a total indirect impact of $35.1 million. Further, the study reports dramatic increases in employment as 36 full time staff members helped create or sustain an additional 294 indirect jobs, and real estate taxes increased from $39 thousand paid by the nonprofit in 1993, to approximately $1.2 million paid by over 1,900 homeowners the next year.
As part of the nation's central bank, you would expect the Federal Reserve Bank of Atlanta to place considerable emphasis on economics and finance, and we do. However, financial measurements alone will not tell the whole story because community development work not only changes landscapes, but equally important, it changes public perceptions. And one of the most exciting examples of changing both landscapes and perceptions is at East Lake Meadows, a public housing community being transformed into a mixed-income community on a golf course in Atlanta. Golf and public housing in the same place may seem strange, but with strong foundation and corporate support, the first phase of this exciting redevelopment has already broken ground and has begun to change the way people, both rich and poor, view public housing. But rather than take our word for it, we present another view with a reprint of an article we entitled Public Housing Transformed that free lance author John Steinbreder wrote on this unusual development.
Finally, we recognize that measuring community development success with financial tools alone is not appropriate. To be successful, it must also evoke an emotional reaction, a good feeling that inspires as well as encourages. And one of the best ways to promote this inspiration is through the arts. For example, murals on commercial buildings help capture the history and pride of a community; artist loft developments attract public interest, support, and a sense of community; and neighborhood based community theatre programs provide publicity and fundraising opportunities for development work. The arts are an integral part of many community development activities.
That is why we are proud to announce an exciting new partnership with the Coca-Cola Foundation to promote the arts through this newsletter. Dedicated to promoting education and the arts, and frequently working through school-based arts programs, the Coca-Cola Foundation provides support to artists around the world in an effort to promote cultural understanding. We will begin featuring some of these artists and their schools in this newsletter. We hope it evokes the same sense of community with you that it has with us. And we gratefully acknowledge and appreciate the generosity of the Coca-Cola Foundation for sharing this art with us all.