Nonprofits Seize Initiative From Federal Agencies

COMMUNITY development is an art form, and it's best left to local communities to design it,'' says Andrew Cuomo, United States Housing and Urban Development (HUD) assistant secretary.

Echoing President Clinton's campaign promise to streamline government and encourage communities to shape their own solutions, HUD's new axiom - ``You do it, not us'' - is a validation of a national trend already under way. All over America, local nonprofit groups are forming to solve local problems. Although they use federal funds, there is often little federal involvement in program design or implementation.

``You come to HUD with a plan,'' Mr. Cuomo told a room full of New England community advocates here earlier this month, ``and if it's intelligent, we'll fund it. But you design it, and we'll partner with you. This is the new HUD, less interested in process, and more interested in support.''

For the last 12 years, HUD, the major provider of federal-housing funds to cities and communities, has thrown a long shadow of bumbling control over cities and communities. Red tape, bureaucratic inertia, and mismanagement have scuttled many of HUD's programs.

``The truth is stark,'' new HUD Secretary Henry Cisneros has said. ``HUD has in many cases exacerbated the declining quality of life in America.''

Mr. Cisneros told a congressional committee last summer that owners of 2,422 HUD housing projects, with some 360,000 apartments, have defaulted on government-issued loans in the last decade. Losses could be as high as $11.9 billion over the next few years. ``HUD's management of its inventory has been abysmal,'' he said, indicating that many properties are deteriorating and overrun by drug dealers and criminals.

It is this kind of federal-agency failure that has led to a rise in nonprofit agencies and multiservice community-development programs.

In essence, the federal government is being bypassed. Most local programs have been launched in response to local needs such as housing, education, drug prevention, and health care. Not all have succeeded, and many programs constantly struggle for funds.

``But this is the way communities are going,'' says Roy Priest, director of HUD's office of economic development. ``It used to be that you could just be a community-housing expert, but today you have to know so much more: economic development, job development, health care. And if you have a strategic vision for your community, you've got to know how to collaborate.''

Because neighborhoods are faced with multiple problems, a single service agency often evolves rapidly to deal with related issues. One example is homeless shelters. ``Because people are staying longer and longer in homeless shelters,'' says Philip Mangano, director of the Greater Boston Housing and Shelter Alliance, ``then we have to help meet their needs in the shelter if we have any chance of making them independent.''

Following the death of a homeless woman across the street from HUD headquarters in Washington in December, HUD released $25 million to act as a ``catalyst for innovative programs'' to help solve homelessness. Even before the announcement, a few shelters had expanded services to include literacy and health programs, job development, and transportation to appointments.

Another example of a response to multiple community needs coalescing in a single agency or location is Public School 218 in New York. The intermediate school offers students comprehensive health care and social services as well as extracurricular programs. Through a partnership between the school and the Children's Aid Society, the $1.25 million program has seven social workers to attend to family problems, a dental clinic at the school, a computer lab, and hot meals. New Jersey, Colorado, Illinois, Kentucky, and California have similar school-based programs and services. Some are funded by federal and city dollars, others by foundations and corporate donations.

Community Development Corporations (CDCs), which started in the early '70s, are another example. CDCs are local corporations with a board of directors. Affordable housing is usually the community priority, but today many CDCs are multipurpose agencies.

In Newark, N.J., a successful CDC called the New Community Corporation has more than 1,200 employees and operates with a $95 million budget. It provides a supermarket, seven day-care centers, 2,500 housing units, a job-placement center, a nursing home, and an elementary school.