History 

As a movement, community development corporations (CDCs) have a relatively recent history. However, philosophically, they find their beginning rooted in the history of community-based organizations that have been operating in this country for more than fifty years. CDCs in North Carolina date back to the late sixties and early seventies, paralleling the development of CDCs nationally, but the majority were formed in the late eighties. CDCs operate in rural and urban areas, targeting their services to low-income communities. They exist to facilitate the development of special programs by which residents can improve the quality of their economic and social participation in community life. By rooting themselves in this development process, CDCs contribute to the elimination of poverty and the establishment of permanent economic and social benefits. 

Nathan Garrett, a veteran practitioner of community economic development activity in North Carolina, recalls that in 1963, the Z. Smith Reynolds, Mary Reynolds Babcock, and Ford Foundations provided money to establish the North Carolina Fund. The purpose of this organization, headed by George Esser, was to break the cycle of poverty that was plaguing many of North Carolina's residents. Around 1967, there was tension within the Fund regarding funding distribution. The Fund was financing seven community action programs in the state. Howard Fuller, who was the heading the Fund, wanted to extend financing to some organizations that were controlled by African-Americans and consequently, formed the Foundation for Community Development (FCD). The Foundation, headed by Nathan Garrett, provided funds to low-income groups and focused on issues such as infrastructure, housing, economic development and the distribution of wealth in the African-American community. Among those earlier groups funded by FCD were the Wilson Community Improvement Association (1973) and United Durham Incorporated (1973), predecessor to the existing UDI Incorporated. There are now more than seventy minority-controlled CDCs in the state. 

FCD eventually went out of business because, in Garrett's words, it wanted to be a CDC rather than the developer of CDCs. Subsequently, the Local Initiatives Support Corporation (LISC) funded an attempt to do what FCD had done, but that initiative was short lived. 

In the early eighties, Legal Services of North Carolina launched new efforts to get people excited about self-help, according to then CDC Association Director, Abdul Sm Rasheed. In 1981, Legal Services decided to devote one-quarter of its Resource Center budget to community economic development advocacy and training. The mission was to revitalize and help build the capacity of local organizations to do community economic development. In 1985, Legal Services and LISC formed a partnership around community economic development in Eastern North Carolina. LISC selected Eastern North Carolina as a site for a rural initiative, testing models that had been developed in urban areas in sixteen northeastern counties. Funds were provided for community economic development training workshops, four in each of four counties during a three-month period. This effort stimulated community interest, but more training was needed. 

In October 1985, The North Carolina Legal Services Resource Center filed the stat's first challenge under the federal Community Reinvestment Act (CRA) of 1976. This challenge was against First Union National Bank. Subsequent challenges were filed against Wachovia Bank, Peoples Bank, North Carolina National Bank, and Branch Banking and Trust Company as they began to expand and buy out other banks. Rasheed recalls those early days and notes that, eventually, the focus of the effort transitioned from that of challenging the banks to that of showing where we had common interests.  By 1986, CRA agreements had been signed with several banks, and more potential capital was available. In addition, many lending institutions funded and implemented community needs assessments in response to the CRA.

The Z. Smith Reynolds and Mary Reynolds Babcock Foundations funded a capacity-building project, creating two regional support positions to help local communities establish CDCs. An eastern project component was set up at Franklinton Center at Bricks, and run in conjunction with the United Church of Christ Commissions for Racial Justice. In western North Carolina, a partnership was formed with YMI Cultural Center. In the Piedmont, the Center for Community Self-Help was contracted to do capacity-building workshops from Charlotte to Raleigh. 

By 1988, it was clear that the CDC industry was going to be revitalized, and that it was going to be a force to be reckoned with in the economic development activity of the state. During its short session in 1988, the North Carolina House of Representatives, at the urging of the Legislative Black Caucus, enacted House Bill 2524, an Act to Appropriate Funds for Minority Economic Development Project Grants and for the North Carolina Institute of Minority Economic Development. A comparable measure, Senate Bill 257, was passed in the state Senate. One-third of the appropriated $1.5 million was to go to CDCs to demonstrate how [they could] improve the lives of residents of underdeveloped minority communities through business, commercial revitalization, and housing development activities. 

A portion of that appropriation was also set aside to fund the North Carolina Association of Community Development Corporations (NCACDC). NCACDC was created in 1989 with eleven charter members, as a statewide membership organization designed to provide technical assistance and helps build the capacity of CDCs. NCACDC currently serves nearly 70 racially diverse, community-based organizations in urban and rural communities across the state.