Community Investment Program - Rural Development Partners | Community Development

Community Investment Program

RDP’s unique approach to rural business development is embellished by its desire to maximize the impact of the Federal tax credits on rural low-income communities.  An example of this is RDP’s Community Investment Program (CIP) where RDP uses a portion of its management fees to further impact the low-income community through job training, leadership training and other valuable programs.

RDP seeks to utilize its Community Investment Program (CIP) to understand the unique needs of the low-income communities it serves and to provide additional support in helping move these communities toward stabile and sustainable growth. Although RDP’s efforts alone are not likely to be the tipping point in a low-income rural community, every positive step is important. So, RDP hopes to participate in the revitalization of rural America through the business projects (BP) the tax credits fund and RDP’s Community Investment Program.

RDP anticipates that for most situations, a maximum of 100 basis points (based on the size of the investment in the BP) will be expended through the CIP to the low-income rural community. This CIP is anticipated to consist of 50 basis points of RDP funding from its management fees and 50 basis points of funding from the BP, BP sponsors, or other source. In certain circumstances CIP funding may be larger.

Assessment Process

RDP will perform a CIP assessment post-issuance of a BP term sheet. This assessment will be performed on-site in conjunction with the BP, BP sponsor, investor, and any co-allocatees as may be appropriate. This assessment team will explain the goals of CIP and the role of RDP in initiating the discussion around community needs along with anticipated primary impacts. It is anticipated that the following entities may be contacted for interviews and discussions in each low-income rural community.

  • Local officials,
  • Local Community Action Agency,
  • Community Economic Development,
  • Cooperative Extension Service,
  • USDA Rural Development,
  • County Economic Development,
  • Community or Technical College,
  • Vocational or safety training programs,
  • Local school district,
  • State Economic Development, and
  • Other local entities that service the low-income rural community residents.

Funding Priorities

The discussions and interviews outlined above will provide a prioritization of CIP suggestions on the potential to enhance the human capital in the community.  Through the CIP program, RDP primarily wants to invest in the economic development of people. In general, RDP will focus its CIP initiatives on the following types of programs:

  1. Workforce development and job training directly related to the industry of the BP. These programs may be specialized training programs, continuing education programs, retraining initiatives, or part of a secondary education program. In reviewing potential workforce development programs, RDP will ascertain the availability of state-sponsored programs that may already be available at no cost to the community. RDP will insure that any workforce development or job training that it supports will not circumvent state-sponsored training programs.
  2. Workforce development and job training directly related to ancillary industries of the BP. The ancillary industries may be upstream or downstream on the BP’s supply chain. These programs may be specialized training programs, continuing education programs, retraining initiatives, or part of a secondary education program.
  3. Specific economic development programs identified during the CIP assessment. These programs would serve an economic development purpose and may be related to the BP. The CIP program would create results that are quantifiable in terms of job creation, other economic impact, and impact on the low-income rural community residents.
  4. Leadership development for community leaders. Low-income rural communities often suffer from a deficiency of skilled community leaders. These programs would provide development resources for the community leaders identified by the Community Partner (link to Community Partners) as showing significant leadership potential in government, economic development, business, or community development.

CIP Process

  1. RDP’s CIP Director will forward initial community information to the Community Partner (CP) for potential CIP investment once a term sheet with the BP has been signed.
  2. Upon receipt of this information, the CP will identify individuals and entities within the community to engage in discussions regarding how best to achieve the human capital-enhancing initiatives of the CIP program.
  3. The CP will interview representatives of local and state organizations to determine which entities are best suited to further the CIP goals.
  4. The CP will meet with local community leaders with the goal of selecting an investment recipient within the local community, if necessary.
  5. The CP will review information and prepare a proposed CIP investment agreement for review by the RDP board, RDP advisory committee, BP and/or other interested parties.
  6. The CP will establish a working relationship with the CIP investment recipients and communicate benchmark criteria that will be reported back to RDP’s CIP Director.
  7. The CIP investment recipient will provide regular reports to RDP’s CIP Director regarding the progress made by the local entities in the established benchmarks.
  8. Funds for CIP programs will be collected and distributed in one of two ways depending on the size and time frame of the project. For projects utilizing a funding amount and time frame making it economically viable to warrant a donor-advised fund, the CP will identify a community foundation to act as a partner. All CIP funds from RDP and the BP will be deposited into a donor-advised fund with the community foundation at the outset of the CIP program, where the funds will be managed until disbursement to the final recipient. If the CIP program ceases to continue for any reason, any remaining funds deposited with the community foundation will be used for other charitable purposes. CIP programs not meeting the minimum amount of funds or length of time necessary to warrant the establishment of a donor-advised fund will be paid directly by RDP. In those cases, the BP funds will be held in escrow by the BP until distribution by RDP.
  9. CIP program funds will be disbursed on an annual or semi-annual basis over the course of the investment period as determined by the agreement with the investment recipient. The recipient must submit reports on a regular basis as defined by the CIP investment agreement in order to continue receiving funds.
  10. Noncompliance of CIP investment guidelines by the recipient may result in the loss of future CIP investment funding and the recovery of unexpended funds.
  11. The CP will assist with CIP compliance or re-evaluation, if necessary.
  12. The CIP data will be compiled for NMTC reporting and for use in future NMTC tax credit applications.

 

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