Building Community Wealth 2017-12-14T16:26:07+00:00

Building Community Wealth

(categories-social management, social entrepreneurship
(thanks to Gar Alperovitz and

There are a growing number of distinct community wealth strategies.  These include nonprofit and profit-making models such as community development corporations (CDCs), community development financial institutions (CDFIs), employee stock ownership plans (ESOPs), community land trusts (CLTs), cooperatives, and social enterprise.

Local and state governments also have an important role to play, as do the nation’s 4,000 colleges and universities. In recent years a new individually-focused wealth strategy (individual development accounts, or IDAs) has experienced rapid growth. There are also a number of innovative wealth building models occurring outside the U.S.

Community wealth strategies

Community wealth strategies are growing around the country. IDAs, for example, didn’t exist 15 years ago; today, there are more than 500 programs in the United States. State pension funds didn’t target any funds to local investment three decades ago; today, they invest over $12 billion in venture capital (much of which is invested locally) and tens of billions more in other forms of economically targeted investment. Community approaches, such as social enterprises, CDCs, CDFIs, and ESOPs, have also grown. For instance, the number of CDCs has risen from a handful 40 years ago to over 4,000 today, while, at the same time, the number of employee owners in ESOPs has increased from 200,000 to over 8 million.
Are there new policy proposals that promote community wealth strategies?

There are many ways that government could support the expansion of asset and wealth strategies. In 2001, Rep. Dana Rohrabacher’s (R. – Calif.) proposed to create a sub-category of ESOPs that would get additional tax benefits in exchange for giving workers more rights. A current initiative in the area of housing development is the 2005 proposal to create a National Low Income Housing Trust Fund: the National Low Income Housing Coalition is backing a proposal to develop a trust fund to finance the construction of 1.5 million homes over 10 years. Also in 2005, a congressional caucus of asset strategy supporters was formed, which has focused on expanding individual-oriented programs such as individual development accounts. In addition to these initiatives, there are a number of ways that government could further support asset strategies – from expanding current support programs to duplicating leading examples at the state level (such as the Ohio Employee Ownership Center).


The role citizens can play in advocating new policies that support community wealth building is key. Voicing your support to elected and appointed government officials, both at the national level and locally, is a critical step in helping these asset strategies acquire the support they need to continue to grow and flourish.

  • Community Development Corporations (CDCs) are non-profit, community-based organizations that anchor capital locally through the development of both residential and commercial property, ranging from affordable housing to developing shopping centers and even owning businesses

  • Community Development Fnancial Institutions (CDFIs) include a variety of financial institutions with a community development mission, all of which provide credit, technical assistance, and other financing services that help low-income individuals, community development corporations, and other community-based entities pursue and implement effective community wealth-building strategies

  • Employee Stock-Ownership Plan (ESOP) companies are for-profit entities in which employees own part or all of the companies for which they work. ESOP companies play a critical role in building the tax and wealth base of local communities, as ownership is rooted in the workers who reside in the community, making plant relocations less likely. ESOP companies are also less likely than comparable firms to lay off workers in downturns.

  • A Community Land Trust (CLT) is a community-based, non-profit organization that buys land on behalf of the community and holds it in trust. By taking the land out of the market and capturing the equity gain for the community, the land trust builds community wealth. Most community land trusts lease homes out to residents using a model that enables residents to gain a minority share of the equity gain, but keeping most of the gain in the trust, thereby ensuring affordability for the future members. Land trusts also serve to shield the community from both land speculators and the dislocating effects of gentrification.

  • The core elements of the Individual Development Account (IDA) idea are:
    opening a special savings account; the savings are matched for the poor, up to a cap; the IDA may have multiple sources of matching  deposits; and the IDA may be used for homes, education, and business capital. Individual development accounts illustrate a central feature of the community wealth-building approach: namely, that to end poverty, communities—and the people in those communities—must be given the tools they need to develop their own, long-term income-generating capacity.

For more information about Community Wealth and building it, go to