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What Is a Community Development Fund?

Jim B.
Jim B.

A community development fund is a sum of money available for groups or individuals to enact projects designed to improve local communities. Such a fund may be endowed by philanthropic organizations or by local governmental agencies, and is only used for community development projects. These projects can be varied in nature but are generally designed with the intent of helping the less-fortunate members of a community. In many cases, a community development fund grants access to its capital to nonprofit groups who come in with proposals for projects in the community.

It is common for the leadership of local communities to do all that they can to improve the lives of all of their citizens. In many cases, special attention is paid to those citizens who may be struggling either in terms of their health, welfare, or financial standing. These kinds of local betterment projects also may come from local citizens who have the money available to give something back to their communities in terms of philanthropic assistance. A community development fund takes all of this well-meaning money and parcels it out to projects designed to help the community.

Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

The typical community development fund is structured like a nonprofit organization, with officers or a board of directors in charge of maintaining the fund and hiring any necessary employees. These officers are also the ones tasked with choosing what projects will receive funding. Projects may be initiated by the fund itself or they can come from outside sources who already have project details in place but lack the funding to implement them.

Although there are many types of projects that a community development fund may help to get off the ground, they are all similar in that they are intended to help members of society dealing with difficult times. One type of project commonly associated with community development is low-income housing. The poor, however, are just one group of many who may need assistance. Handicapped people or those with serious health problems, elderly people, and immigrants may also be in need of the kind of help that community development can provide.

With all of these people to help, a community development fund may be tasked with endowing projects of all kinds. For example, a blood drive for a local hospital may be funded through community development. Beautification projects for local parks that have become run down also may come from such funding. In short, any project that improves the quality of life for members of a community in need of assistance may qualify for community development funding.

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