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Cascade: No. 55, Summer/Fall 2004

Church-Based CDC Helps Build Assets and Skills in Delaware

Nehemiah Gateway Community Development Corporation, a church-based organization in Wilmington, has organized one of the most successful earned annual income tax credit (EITC) campaigns in the country and has begun to strengthen home-based child-care providers in Delaware.

The community development corporation (CDC), a four-year-old affiliate of Shiloh Baptist Church in Wilmington, has organized EITC campaigns during the past three years, including statewide campaigns in 2003 and 2004. This year, 300 volunteers prepared tax returns at 15 IRS volunteer income tax assistance (VITA) sites for about 4,800 residents, of whom about 35 percent applied for EITCs. Last year, 120 volunteers prepared returns for about 2,850 residents at 12 sites.

John Wancheck, EITC campaign coordinator at the Center on Budget and Policy Priorities in Washington, says that the Delaware campaign has been one of the best in the country. He attributes the campaign's success to its extensive planning and organization, its ability to engage leaders in the business, educational, and governmental sectors, and its comprehensive approach. When Delaware residents came to VITA sites seeking free tax preparation and EITC refunds, site managers assisted some of the residents in opening savings accounts with PNC Bank (Delaware) and provided information and referrals for financial-education courses, a computer-purchase plan, individual development accounts (IDAs), and public-benefit programs.

Similarly, Nehemiah Gateway requires residents who want a computer to take a financial-education course. In this program, residents must open a bank savings account and save $250, of which $175 is matched by the CDC for purchasing a computer. Nehemiah Gateway buys reconditioned computers from PerScolas, a New York-based nonprofit.

"There has to be a hook or incentive to interest residents in financial education," says Mary Dupont, executive director of Nehemiah Gateway. "You must give residents something of value that they really want. You also need a great teacher, ideally a community person who knows how to work with people." The CDC provides its own six-hour financial-education course, which has served more than 400 EITC program participants, and sometimes refers residents to Delaware Money School classes.

Some home-based child-care providers arrived at EITC sites in 2003-04 with "bags of receipts," Dupont recalled, and the CDC gradually became aware that there are 2,000 home-based child-care providers in Delaware. Many of the providers care for low-income children and accept state-subsidized payments that are far below market rates. In response, Nehemiah Gateway designed tax and record-keeping courses that now count toward a state continuing education requirement. During the process, the CDC walks participants through applications for business loans from the First State Community Loan Fund.

Nehemiah Gateway's training center has provided computer instruction, life skills, and job placement services to 140 disadvantaged adults, about 65 percent of whom have stayed in permanent full-time positions. Its IDA program has 75 participants, and the CDC has held two "business expos" — the second of which attracted 1,000 people and involved 21 churches and 170 small businesses. Early this year, the CDC started a car loan program that has made 12 loans to working parents.

The CDC, with a staff of nine full-time equivalents and an $800,000 budget, greatly benefits from the unique banking environment in Delaware and the presence of many limited-purpose and wholesale banks. About 40 percent of its budget is funded by banks. Dupont notes that several CRA officers have played a valuable role in "brainstorming and helping to design programs and innovations."

Dupont, who previously was director of the YWCA of New Castle County's Women's Center for Economic Options and a consultant to the Corporation for Enterprise Development, noted that two Nehemiah Gateway programs that explicitly enlist the spiritual motivation of residents are funded by a local family foundation.

The Rev. Clifford I. Johnson is pastor at Shiloh Baptist Church, which was founded in 1876 and is the oldest African American Baptist church in Delaware. Before earning a doctorate in urban ministry and becoming Shiloh's pastor in 1997, he was a managing partner at Marsh and McLennan Companies in New York, while he also served in a part-time position as a minister. Rev. Johnson, who is the CDC's president and CEO, said that he founded Nehemiah Gateway because he wanted to have more "impact in transforming communities" than is normally possible through traditional church food, clothing, and other human-service programs. He said that churches thinking of starting CDCs should form a small planning group within the congregation prior to incorporation, build capacity in-house, learn from the successes and failures of other church-based CDCs, and emphasize integrity in operations.

For information, contact Mary Dupont at (302) 655-0803 or mary@marydupont.com.