Lead Us Through the Valley

The mystery of how economic decisions are made, by whom, and where is enough to discourage many community people from trying to influence the process. 

The language of federal regulation often appears burdensome and obscure. The code of economic development frequently requires translation. So how did a group of church and community activists in Birmingham, Alabama make politicians accountable for the use of federal funds targeted for the economic benefit of low- and moderate-income people? 

Called the "Pittsburgh of the South," Birmingham experienced a severe recession in the early 1980s when its industrial base shrank drastically. Plant closings and cutbacks resulted in the permanent loss of about 14,200 jobs, according to a United Way-sponsored study. The city has long depended on its manufacturing jobs, particularly in railroad car and steel production, and the transition to a service-dominated economy is slow. Health-care services now employ 11 percent of the area's total work force, but unemployment remains a significant problem, especially for the dislocated industrial worker. The current unemployment rate of about nine percent, representing about 37,000 jobless individuals, is down from 13.1 percent in 1983 but still well above the national average of 7.1 percent. 

A key organization behind community efforts to confront the city's economic troubles over the past decade has been Greater Birmingham Ministries (GBM), an ecumenical urban-mission agency supported by eight denominations. In the late 1970s, staff associate George Quiggle led GBM into neighborhood organizing to meet the needs of the poor and unemployed, with an agenda based on three guidelines: neighborhood leaders would take responsibility for their own communities; GBM would help empower them to meet their desired goals; and GBM would use its leverage to broker power and resources for them. 

Quiggle knew that the success of these neighborhood-based efforts would require information, political backing, and strong leadership. He didn't have to wait long for his strategy to be tested. A crisis in November 1978 triggered a series of neighborhood actions that brought all of these elements into play. That month an article in the Birmingham News announced the city's decision to allocate the majority of its Community Development Block Grant (CDBG) funds to four neighborhoods. The choice of the four areas stunned low-income neighborhood leaders. 

Federal CDBG funds are intended to benefit low- and moderate-income people by developing viable urban communities. Since its beginning in 1975, CDBG has paid out over $37 billion nationally, and it remains the principal source of federal money for inner-city development. Although the U.S. government provides some minimal guidelines, specific funding decisions rest with the local government. Funds can be used for jobs programs, housing, slum clearance activities, and similar programs improving the "living environment and expanding economic opportunities'' for community residents. 

In 1977, the U.S. Department of Housing and Urban Development (HUD) began encouraging cities to target a portion of these funds for areas with the greatest need. Citizen participation in developing and reviewing plans was also emphasized in the federal guidelines. Following this federal mandate for citizen input, Mayor David Vann developed a neighborhood structure with its own elected leadership. However, no citizen review had taken place before the announcement of Birmingham's 1978 plan to spend its CDBG money and, to many community leaders, the four neighborhoods chosen seemed more stable and less in need than their own. 

At this point, GBM board member Carolyn Crawford did some investigative research. She discovered that in designating the four "strategy areas,'' the city had made certain judgments about the health of 91 neighborhoods using its own classification system: "A" meant the neighborhood had a high degree of low- and moderate-income households and blight as well as a greater degree of potential for improving housing or economic conditions; "B" indicated it had a lower degree of low- and moderate-income households and blight and also a greater degree of potential for change; "C" designated neighborhoods with a high degree of low- and moderate-income households and blight and a lesser degree of potential; "D" meant the neighborhood was ineligible because its income level exceeded the federal standard. 

Using this system, the city had selected two class "A" neighborhoods and two from class "B" for the bulk of its CDBG funds — i.e., two that were relatively stable and two that were not predominantly low/moderate-income. Crawford characterized the city's action as following the triage strategy used in medicine: identify the cases with the most potential, work with them, and let those with less hope die. "And that is how we got our start," she said recently, "being an advocate for neighborhoods considered too needy to help." 

 

With GBM's help, the class "C" neighborhoods held a series of meetings. Why, community leaders asked, was the Citizen's Advisory Board — a representative group developed to consult with the city on neighborhood priorities — not contacted before the CDBG funds were allocated? More important, why were these four areas chosen when they clearly did not have the most urgent needs? 

City officials responded that potential, not need, had taken priority in their deliberations. The current grants administrator for the city, Jim Fenstermaker, recalls that "the city's philosophy at that time was to hold the line on the edges of the city where white flight was occurring with the concept that then the city could return to the inner city and its problems." 

Unsatisfied with the city's answers, three presidents from class "C" neighborhoods met during the spring of 1979 to explore options for getting some of the city's poorest neighborhoods classified as "strategy" or target areas for CDBG funds. A follow-up meeting involving "A" and "C" neighborhoods led to the formation of the Low Income Planning Committee with representatives from 30 neighborhoods. 

"Before the city designated the neighborhoods, they did a windshield study," one of the presidents remembers. "They drove through the neighborhoods, never stopped and asked us anything. My neighborhood was said to have the highest crime rate, to be a bad place. It had its strengths. They didn't know what we needed. They never asked." The city's designation of some neighborhoods as lacking potential especially bothered local leaders. 

Together with GBM and the Center for Community Change in Washington, the Low Income Planning Committee launched a case-study investigation of Birmingham's total CDBG program. The findings showed that the city's expenditures were inappropriate, and GBM filed an administrative complaint with HUD charging that Birmingham officials had ignored the needs of poor communities. The following year, HUD instructed the city to devote part of its $4.3 million in CDBG funds to activities in neighborhoods with a higher level of need. 

It was a tremendous victory for the neighborhoods. But the worry continued. Why did city bureaucrats hold such negative views of low-income communities? Newly elected Mayor Richard Arrington demonstrated a more positive attitude, but one council member described granting aid to poor neighborhoods as "pouring water down the black hole." Distrust existed on both sides, in the city's Community Development Department and among the leadership of the Low Income Planning Committee. 

Neighborhood representatives continued to meet to consider how they could take more control of their destinies and overcome the city officials' negative perceptions of their potential. The result was Neighborhood Services, Inc. (NSI), a community-controlled organization devoted to "capacity building" in 31 low-income neighborhoods — that is, developing resources and potential through leadership training, project development and advocacy. 

In 1981, the city council approved the creation of NSI by a narrow 5-to-4 vote. "From day one NSI was going to be looked at with suspicion," says GBM board member Charles Moore. "There was built-in tension." The neighborhoods had challenged the city officials to legitimize NSI's existence, but to challenge them further posed difficulties since NSI's funding came from Birmingham's CDBG money, beginning with $200,000 in May 1981. 

Many at NSI view Greater Birmingham Ministries as their parent organization because of the role GBM played during its formation. George Quiggle understood neighborhood residents and city politics, which made empowerment and careful strategy possible. Carolyn Crawford applied a shrewd sense of what to look for in her research, which gave community people the information and confidence they needed for effective action. "The case study gave neighborhood people the fuel they needed," recalls Sarah Price. "We got angry at being told we weren't worthwhile. Together [with GBM] we put in long, hard nights. This organization did not come by a whim, but long, hard work." 

 

NSI is currently being criticized by some managers in the city's Community Economic Development Department and HUD for not accomplishing its goals over the past five years. Sarah Price bristles at the criticism: "Who is to say whether we have built up to capacity? How do you measure it? I have learned to talk to bankers, insurance companies, businesses. I have increased my ability to do things for myself. These are capacity-building efforts which could never be measured." 

NSI continues to receive CDBG funds, but at reduced levels. Ed LaMonte, executive secretary to Mayor Arrington, emphasizes that the mayor still strongly supports the organization, but budget cuts have affected all city operations. "With federal money diminishing," he says, "this is a period of harsh economic questioning." 

Tommie M. Mitchell, president of NSI's board of directors, acknowledges the growing pains of a young organization and the need to establish clear priorities between its original goals of project development and advocacy. But she also firmly believes that NSI has made things happen in her neighborhood which never would have happened otherwise. "NSI built up our confidence," she says. 

With its staff's assistance, her neighborhood used CDBG funds to set up a minor home repair program that trained and employed 15 out-of-school youths and improved 32 homes owned by low-income residents. Another success story involved the development of Birmingham's first low-income housing cooperative. A project to redevelop a neighborhood shopping center may now be in trouble because of problems with securing private financing; the city has offered substantial financial help contingent on matching private funds. 

Carolyn Crawford, among others, thinks the city has hampered NSI's effectiveness with unreasonable expectations. For example, under a city contract NSI has rehabilitated nine houses for resale to low-income people. The Community Development Department says that NSI is not moving fast enough to get these units sold, but Crawford points out that the problem stems from the unwillingness of lenders to provide loans to potential homeowners. Ed LaMonte acknowledges the difficulties poor people experience, but says NSI must understand the city's responsibility to monitor NSI or lose the federal funding altogether. 

In spite of the disagreements, a strong relationship does exist between NSI and City Hall. "Initially, it was adversarial," says NSI executive director Rayanthnee Patterson. "We were always fighting, not complementing each other. However, we are beginning to be a complementary agency to the activities of the city." City grants administrator Jim Fenstermaker agrees. "We are looking to establish a meaningful partnership with the neighborhoods, GBM, NSI. This is recognized in subtle ways. We do need to have some success stories." 

 

Greater Birmingham Ministries and NSI have continued to be partners since NSI's start in 1981. GBM often takes a strong public stance, advocating issues which the two groups have privately discussed. NSI's dependence on the city for its funding makes independent criticism difficult and risky. 

Another group has joined this partnership: the Greater Birmingham Unemployed Committee (GBUC). It began during the wave of plant closings three years ago when unemployed workers turned to GBM for assistance. GBM staff associate Angie Wright helped them organize GBUC to deal with unemployment benefits, job creation, and other issues. GBUC has also become involved with monitoring CDBG money and Urban Development Action Grant (UDAG) recapture funds. (UDAG is a federal program designed to reduce economic decay and improve communities through private loans administered by local governments; the interest generated from these loans is called "recapture funds.") 

GBUC's involvement in public hearings complemented the larger GBM-NSI effort to insist that public funds serve the public most in need of help. At a February 1985 public hearing where GBUC members turned out in force, GBM director George Quiggle called for a change in the leadership of the city's Community Development Department, citing problems with the administration's program and policies. 

Why was there such a delay in implementing approved neighborhood projects, Quiggle asked, pointing out that HUD had ordered the city to increase its rate of pay-out of unspent CDBG funds in 90 days or risk losing the money. Why had the administrative services of the CDBG budget grown to the maximum percentage allowed by HUD, thus reducing the number of projects funded? And beyond the NSI-related activities, why were citizens not involved in carrying out CDBG programs? 

Quiggle also challenged the city to develop specific criteria for allocating its UDAG recapture funds and its one-year-old direct-loan program for economic development projects. Money for these programs seemed to be distributed on a first-come, first-serve basis without regard to need or appropriateness. Already, the city was in the process of granting $200,000 of the $350,000 loan program to the Electric Blue Print Company for speculative office space downtown. 

A month after this public hearing, Mayor Arrington met with GBUC and GBM representatives and agreed that criteria were needed to evaluate economic development proposals for CDBG loans and UDAG recapture funds. In subsequent discussions with city officials, a set of acceptable criteria was hammered out and finally adopted by the city council in October 1985. The mayor also agreed to allow a citizen review body to offer informal comments on the proposals before they were recommended to the city council. 

The determined effort by GBUC and GBM, with NSI's support, paid off. A strategy team with representatives from the three organizations now meets to review all proposed economic development projects. The primary criteria are that the projects: be labor intensive; provide permanent employment above minimum wage; give preferential hiring to existing workers in the case of a plant closing or ownership transfer; and match jobs to existing skills of the labor force or provide training. A secondary set of criteria gives priority to subsidize projects that hire: the long-term unemployed or underemployed; provide some form of collective community gain; give first-hiring preference to residents of the community or the city; are locally owned and managed; and involve minority ownership and management. 

"To our knowledge, all the proposed projects have been given to us for review," reports Carolyn Crawford. "The review process has been effective in at least two ways. It is what ensures that the criteria are actually used rather than shelved for dust collection. Our discussion and rationale reflect the criteria; hence others, from the mayor's office, CD Department, and council staff get used to thinking about the projects from this perspective. Also, we have been able to review the proposals early enough to make an impact." 

 

In February 1986, GBUC and GBM returned to testify at the CDBG public hearing. GBM board president John McClure, board member Greta Clark, and new director Doug Mitchell emphasized the need to target programs for low-income people and to assure that publicly financed downtown development projects hire unemployed city residents and "offer new income to previously marginal members of the community." Board president McClure proposed specific changes in the CDBG budget: increasing the public service category, earmarking grant funds for economic development projects, removing a large public improvement project, and transferring the NSI grant from an "administrative service" to a program expense to allow more funds to go into projects. 

For the first time, the city responded to these recommendations and placed many of them in the final budget. GBM's credibility and clout has steadily increased, and city officials recognize its vital role in making the best decisions with decreasing federal money. "We all need to focus on getting the most effective programs out of limited funds," says Ed LaMonte of the mayor's office. He predicts that CDBG will not disappear altogether but will continue at a reduced level; one-third of the budget has been cut for the 1986-87 fiscal year. Grants administrator Jim Fenstermaker looks to GBM to help identify worthy projects for CDBG funding. Concludes Ed LaMonte: "GBM has earned a reputation of being consistent, intelligent, and forceful in its registering the concerns of the low-income community." 

Differences in perspective continue to exist between the city and the neighborhood groups. NSI and GBM are not downtown-oriented, according to LaMonte, but the mayor's first commitment must be to the economic growth of downtown, because it provides the tax-revenue base for city services. His second commitment is to stabilize and strengthen neighborhoods. Staff associate Angie Wright criticizes this choice of priorities. "It is not enough just to give services if people aren't allowed to participate in the life of the city," she says. "There is something wrong about a commuter-based city when the inner-city residents are unemployed." 

Jim Fenstermaker explains the differences in philosophical terms: "GBM looks at the neediest of the needy. We look at how we can achieve the greatest good." From a theological perspective, the two approaches represent the tension between the Christian ethic of love rendered to the least advantaged and the utilitarian ethic employed by policymakers faced with limited resources. 

 

What are the key elements of this successful work which can be duplicated elsewhere? First, careful research and analysis inform every public testimony, every negotiation, every step taken. This includes being alert to the changing words in regulations which signal shifts in federal policy. It also calls for patient attention to the changes in local leadership. So the second key to success is a commitment to the issues over a long period of time. 

Third, political backing on two levels is crucial. At the grassroots, NSI represents 99,000 people living in 31 low-income neighborhoods; this "people power" is not fully realized in electoral activity but is recognized by some politicians. At another level, the presence of Mayor Richard Arrington in office has enabled change to occur. Even though he is pulled by other priorities, his sympathies are with poor people and his intervention has enabled reforms like the creation of NSI and the citizens' review of CDBG funding to pass the city council. 

Finally, leadership is essential in community-based struggles. The shrewd sense of Carolyn Crawford, the warm charisma of George Quiggle, the fiery energy of Sarah Price, and the honest insights of Tommie Mitchell are just a few of the leadership qualities which have kept the spirit alive during a decade of work. Perhaps most important, all of these people and others in NSI, GBUC, and GBM have projected a vision which guides their strategy decisions and daily activities. "We are always looking out for the person on the lowest rung of the economic ladder," says Carolyn Crawford.