What Does the Financial Crisis Mean for CDCs?
Posted by David Holtzman on September 18, 2008
Being a person who doesn’t have much invested in the stock market, I tend not to pay too close attention to photos on the business pages of weary stockbrokers on the trading floor. We’ve been through crashes before, and this stuff is cyclical. I don’t necessarily see a rerun of 1929 on the horizon.
But in the CDC world, I wonder if there’s cause for concern. Many of our organizations look to banks for funding support. Those donations of $25,000 here and there add up to a lot. What if banks decide, even if they aren’t knee-deep in subprime mortgages, that in this risky financial climate that they can’t afford to contribute to our fundraisers for the foreseeable future?
Then there’s foundations. What if foundations see a marked drop-off in contributions that form the backbone for their support of our innovative programs?
It’s hard enough already, given the skeletal nature of federal funding programs, to build housing in weak or strong market cities. It’s getting to be nearly impossible in very expensive markets like Boston. Many CDC leaders have been talking for years about the need for partnerships and perhaps mergers to pool their resources and avoid financial failure. I wonder if this latest crisis will break the backs of some CDCs.
I’m curious what other folks in the CDC world are hearing and thinking about this.