NEIGHBORHOOD CONDITIONS l af6

H EARINGBEFORE THE

JOINT ECONOMIC COMMITTEECONGRESS OF THE UNITED STATES

NINETY-SEVENTH CONGRESS

FIRST SESSION

MAY 20, 1981

Printed for the use of the Joint Economic Committee

U.S. GOVERNMENT PRINTING OFFICE

83-512 0 WASHINGTON: 1981

0 . i ! . ?

JOINT ECONOMIC COMMITTEE(Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.)

HOUSE OF REPRESENTATIVES

HENRY S. REUSS, Wisconsin, ChairmanRICHARD BOLLING, MissouriLEE H. HAMILTON, IndianaGILLIS W. LONG, LouisianaPARREN J. MITCHELL, MarylandFREDERICK W. RICHMOND, New YorkCLARENCE J. BROWN, OhioMARGARET M. HECKLER, MassachusettsJOHN H. ROUSSELOT, CaliforniaCHALMERS P. WYLIE, Ohio

SENATEROGER W. JEPSEN, Iowa, Vice ChairmanWILLIAM V. ROTH, JR., DelawareJAMES ABDNOR, South DakotaSTEVEN D. SYMMS, IdahoPAULA HAWKINS, FloridaMACK MATTINGLY, GeorgiaLLOYD BENTSEN, TexasWILLIAM PROXMIRE, WisconsinEDWARD M. KENNEDY, MassachusettsPAUL S. SARBANES, Maryland

JAMES K. GALBRAITJT, Ezecutive DirectorBRuCE R. BARTLETT, Deputy Director

(II)

CONTENTS

WITNESSES AND STATEMENTS

WEDNESDAY, MAY 20, 1981

Reuss, Hon. Henry S., chairman of the Joint Economic Committee: Page

Opening statement _-------------------------.-_-_-_-_-. 1

Simpson, Dick, associate professor, Department of Political Science, Uni-

versity of Illinois at Chicago Circle, Chicago, Ill., and board member,

National Association of Neighborhoods - _-_-_ 2

Landers, Jody, executive director, Harbel Community Organization, Balti-

more, M d __- - - - - - - - - - - - - - - - 53

Kotler, Milton, executive director, National Association of Neighborhoods,

Washington, D.C _- - - - - - - - - - 58

Brill, Carol, executive director, Eastside Housing Action Coalition, Mil-

waukee, Wis -__----_----------------_------_------ 60

SUBMISSIONS FOR THE RECORD

WEDNESDAY, MAY 20, 1981

Landers, Jody: Excerpt from U.S. postal regulations governing organiza-

tions such as the Haibel Community Organization - 56

Simpson, Dick: Prepared statement, together with attachments - _- 8

(III)

NEIGHBORHOOD CONDITIONS

WEDNESDAY, MAY 20, 1981

CONGRESS OF THE UNITED STATES,

JOINT ECONOMIC COMMITTEE,Washington, D.C.

The committee met, pursuant to notice, at 10 a.m., in room 6226,Dirksen Senate Office Building, Hon. Henry S. Reuss (chairman of

the committee) presiding.Present: Representatives Reuss and Richmond, and Senator

Sarbanes.Also present: James K. Galbraith, executive director; and Deborah

Matz and William Keyes, professional staff members.

OPENING STATEMENT OF REPRESENTATIVE REuss, CHAIRMAN

Representative REUss. Good morning. The Joint Economic Com-mittee will be in order for an inquiry into the status and prospects of

the American neighborhood. Support for the neighborhood has been on

about as bipartisan a basis as is possible to imagine. Under the past

1977-81 Democratic administration, there were considerable strides

forward made in neighborhoods: An Assistant Secretary for Neighbor-hoods was set up in HUD. The community development block

grant and the section 8 rental assistance programs were beamed at

neighborhoods. CETA public service jobs and HUD rehabilitationand neighborhood self-help development grants further backstoppedthe neighborhood movement.

Such semi-independent organizations as the National ConsumerBank and the Legal Services Corporation added further impetus to

the neighborhood movement.I have caused to be erected on high over the committee room this

morning the pendant and banner which for many years graced Mr.

Reagan's appearances around the country and which was adoptedon the cover of the Republican National Convention's platform at

Detroit last July.You note the symbols, "Family, Neighborhood, Work, Peace and

Freedom." Those symbols, of course, are not the exclusive property

of the Republican Party but are shared goals for Democrats as wellas Republicans. TheRepublican platform specifically declares, "Thequality of Americanneighborhoods is the ultimate test of the successor failure of Government policies for the cities, for housing, and for

law enforcement," and President Reagan, during the campaignstressed what he calls, "the importance of preserving strong urbanneighborhoods."

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In this world of divisiveness between Republicans and Democrats,it's a pleasure to be able to record that in principle at least the twoparties are absolutely on all fours.The purpose of this morning's hearing is to explore the practiceas well as the principles and our inquiry is how, in late May 1981,the neighborhoods are doing. We have called as witnesses-in ad-dition to requesting the presence here of the leadership of HUD-

four private sector neighborhood experts: Milton Kotler, executivedirector of the National Association of Neighborhoods; Dick Simpsonof the University of Illinois and the Illinois Association of Neighbor-hoods; and Carol Brill of the Eastside Housing Action Coalition ofMilwaukee, and Mr. Jody Landers of Harbell, which is a Baltimoreneighborhood organization.

Under the rule and without objection, the comprehensive state-ments of all of our witnesses are received into the record and wenow would like each of you to proceed.Mr. Simpson, would you start off, please.

STATEMENT OF DICK SIMPSON, ASSOCIATE PROFESSOR, DEPART-MENT OF POLITICAL SCIENCE, UNIVERSITY OF ILLINOIS ATCHICAGO CIRCLE, CHICAGO, ILL., AND BOARD MEMBER, N1A.TIONAL ASSOCIATION OF NEIGHBORHOODS

Mr. SIMPSON. Thank you, Mr. Chairman. We are quite concernedin the neighborhood movement because it is our faith that the re-affirmation of American values and the revitalization of Americaninstitutions must begin at the neighborhood, local grass roots leveland build upwards. It is impossible to do this simply working fromeither government or the private business sector down to the grassroots. Instead, we must build from the bottom up.

What is required is a genuine partnership between Government,the private sector, and the neighborhoods, and as CongressmanReuss has already stated, that is in fact the creed of both of thepolitical parties at their last national convention as stated in theirnational platforms.

Our concern is whether or not in fact Government is indeed goingto do the two steps that are most important to allow us to rebuildsociety from the grass roots. The first step is to empower existingneighborhood organizations which the neighborhood movement hasalways supported and which was reaffirmed in the National Neigh-borhood Platform of 1979, drawn up by some 100,000 neighborhoodleaders across the country. We mean to empower the existing smallgroups, block clubs, PTA's, umbrella community organizations;the groups that deliver day care and health services across the country.Essentially these groups which serve our neighborhoods are not verypowerful under the circumstances. If we want them to play their fullrole in American's revitalization we must empower them.

Second, we believe that we must move in the long run towardneighborhood government. That is to say that we are in fact capableat the local level of making many decisions for ourselves which weare currently simply being denied the power to do.

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What I would like to do is to share with you a little bit of what

the neighborhood movements have done, what the current govern-

ment programs have been doing to support the neighborhood move-

ment; of responsibilities we see ourselves able to assume in the future

if we can get empowerment and sufficient funding.First of all, there are more than 10,000 neighborhood organizations

that now span the country. They occur in small towns, in small com-

munities, and in suburbs, as well as in large cities; and they are

basically of three types: neighborhood service delivery organizations

which deliver direct services such as day care or senior citizen hot

food programs; neighborhood advocacy programs in which com-

munity organizations do not so much deliver the service directly

but serve as watchdogs and ombudsmen to make sure both the private

sector and the public sector do indeed deliver the services which they

have promised; and last of all, neighborhood government which over

100 cities in America are empowered to actually govern on their own

behalf the neighborhood directly.Appended to my prepared statement before the committee today are

six papers called Neighborhood Revitalization which are in this

packet and they do case studies of six different kinds of neighborhood

institutions in Chicago which we believe are models for the Nation.

There are, of course, more than six kinds of neighborhood groups that

are needed for any healthy neighborhood, but this is simply to give

the committee actual case studies of what is possible in the current

situation by neighborhoods in America. A national priority must be

the establishment and strengthening of just such neighborhood insti-

tutions in all American neighborhoods.Now let me say also that neighborhood groups are the most cost

effective and spend the least money to get the most done of almost any

institution in America. A study by Professor Cunningham of the Uni-

versity of Pittsburgh of some 16 neighborhood organizations in

America cited the Midtown Citizens Association of Wichita, which

during the last 8 years saved the frame homes of their community,

diverted industrial development and a proposed expressway, banned

truck traffic from interior streets, selected a site for a public swimming

pool, started a midtown construction company in the private sector,

delivers 4,000 organization newsletters regularly to their community,

brings meals to the elderly, sponsored neighborhood celebrations and a

midget football league all for a budget of $1,000 a year which they

raised themselves.This is not unusual. Neighborhood groups are able to take very

limited funds and stretch them very far. However, I think, in honesty,

we must report to this committee and to the Congress that neighbor-

hood services do cost money and that the current Federal budget cuts

are going to be a severe problem for the neighborhoods.I have listed in my prepared statement 10 particular programs

which when cut or eliminated will have a disastrous impact on

America's neighborhoods and as the chairman mentioned will reverse

the strides which have indeed been made in the last several years

in this Congress and under the past administration.The Legal Services Corporation, which has served over 1 million

clients that are poor, that are not able in our neighborhoods to get

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services any other way, is to be totally eliminated. If it is, the poor willnot be able to get pro bono services from lawyers. They will not be ableto get services from public interest groups. There will be 1 millionclients next year if the Legal Services Corporation is eliminated whowill simply have to turn to lawless methods because the methods ofthe law will no longer be available to them.VISTA, the volunteer service to America-every VISTA volunteerhas generated an average of $35,000 to the neighborhoods where theywork in new resources. In fact, in Chicago, some four VISTA volun-teers on the northwest side of Chicago have found jobs for 1,200unemployed people in their community. Those are the kinds ofservices that are being stripped with the decline in VISTA and theproposal that in fact VISTA be eliminated in a 2-year cutback. Ifthose VISTA employees go, we will undermine volunteer programsand voluntary organizations. Neighborhood organizations will notbe able to get unemployed people back to work. They will not beable to deliver direct services. These are the kind of harms that arenot just done to VISTA employees but directly attack the fiber ofour neighborhoods.Of course, you're familiar with the Community Services Adminis-tration which, began as local programs, locally administered in com-munities that have the least opportunity to deliver services effectivelyby other means. It is to be cut entirely. All the programs of theCommunity Services Administration are to be jettisoned; with it thehopes and dreams of residents of poor and minority communities.A small program of $15 million of HUD, called neighborhood self-help development, had been totally eliminated in the new budget.This is the only program where the Federal Government gives directgrants to neighborhoods to actually do housing programs that areneeded. It's an infinitesimal part of the budget yet it is to be totallyscrapped and eliminated.

There are more than 500,000 CETA public employees. Of thepeople that are currently enrolled in CETA, 41 percent are minorities.In Chicago alone, 6,300 CETA jobs will be lost and they will be lostby an Executive order as of June 30. There are going to be disastrousproblems for our neighborhoods to reabsorb these people who havebeen employed doing good works and, in addition, not only will wehave to reemploy them, but pay the taxes for the jobs theyare doing-picking up the garbage, answering police emergency phonenumbers, and providing health and educational services. These kindof cuts are not just general budget cuts. In fact, one could say if onelooked at the budget, that those who have proposed these cuts musthave taken a lexicon and found every neighborhood program thatexists in the Federal Government and eliminated them.

We don't think the neighborhoods alone have been particularlymarked for punishment. There are other areas that are cut as well.But, these cuts as they impact neighborhoods are severe. And I havelisted five other cuts in title 20: Community development block grantsand the Small Business Administration, section 8 housing and thecommunity health centers, all of which are being taken from ourneighborhoods in one form or another. I won't burden you with thatlist now. I will only say that these cuts will harm neighborhoodsand neighborhood organizations.

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Let me just trace it a little further. The cuts are not only occurringhere. They are also occurring locally. In the State of Illinois, GovernorThompson is proposing an additional $200 million in cuts, all of whichare to come from the social sector. These Thompson cuts will closemental health centers, out-patient health centers, take away medicaidfrom a large constituency in our communities, and close day-carecenters. The very services that are the fiber of our neighborhoodsare not only being cut at the Federal level, they are also being cutat the State level.

And last of all, the city administration in Chicago is taking theremaining Federal funds and propping up the patronage system.What they are going to do is to take the Federal funds that remainand fund the city administration. Mayor Byrne is going to take awaythe funds from the voluntary organizations that actually deliver theservices. It will then become unworkable for the volunteer organiza-tions in the neighborhood to continue to provide public services. Day-care centers will almost invariably become private day-care centersrendering day-care services to the middle class and not to the poor.

I think that's serious when we have such drastic changes beginningand almost no debate on the consequences. Nonetheless, we are nothere this morning just to complain about the budget cuts, althoughI would be glad to detail the effects of that. I want to talk, in addition,about the growing consensus about what neighborhood organizationscould do because we can do more than just deliver individual services.

As the chairman said, and I detail in my prepared statement,both Democrats and Republicans have agreed that neighborhoodsare the place where we can deliver services humanely, allow forcitizen participation, give citizens a voice in those decisions thatconcern them most. The neighborhoods are the only place wherethis can be done and we are behind the rest of the world.

In Europe, for instance, Italy already has neighborhood self-government in cities like Florence and Bologna. Just to give theexample of Florence. There they allow their neighborhood organiza-tions to spend up to $300,000 of city funds directly on neighborhoodprojects. They control their own parks-not in downtown Florence,but the neighborhood parks in Florence are controlled by neighbor-hood organizations. They are rehabilitating villas not for the purposeof housing; they are rehabilitating them as community centers in theneighborhoods. I have been in Florence and I've looked at them per-sonally. We're not doing those kinds of things. We should be.

In Norway, Oslo is allowing community organizations to beginto be heard regularly on all governmental matters. They have neigh-borhood councils with much more power than American neighborhoodshave or than we are asking for now.

We think that American neighborhoods have a right to be em-powered as they exist; that we have a right to a voice in how Federaland State funds are used; that we should have the authority to prepareour own neighborhood development plans; that we should be ableto monitor programs. The Federal Government doesn't know whatmoney is spent in a neighborhood. Nobody else does. We in theneighborhoods want to monitor all the programs ourselves and underexisting laws and programs, we are not given that power.

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We want to have sufficient public funds and grants to be able toperform our public duties better and we are willing to assume morepublic responsibility. We want the ability to define our own geograph-ic boundaries. We want access to public documents. In the city ofChicago, it is not a right of the citizens to see public documents.This is true in many parts of the country.

I know you have freedom of information at the Federal level,but we don't have it in the States and cities, and it's hard for neighbor-hoods to operate effectively without information.

Last of all, we would like to have advance notice of neighborhoodimpact statements of all plans for Government programs and aright to testify as to whether or not we want those programs for ourneighborhoods.

Specifically, I suggest two steps for empowerment to be taken bythis Congress, if the Congress had the will, which it did not have inthe previous Congress, and currently with all the budget cuts, itdoesn't look like it has, it could empower our neighborhoods. I thinkit's essential that this step be taken.

First, I think we have to speak seriously about neighborhoodshaving a voice in Federal programs. In the community developmentblock grants, the Senate has already in its committee hearings votedto take away all existing rights of citizen participation. Currentlythe impact by neighborhoods has been totally inadequate in blockgrant programs. Even with the current regulations, neighborhoodshave not been able to impact community development block grantsas they would like. Without at least our existing guarantees theprospects will be worse.

Giv ing the money to the cities without checks is essentially amistake. We believe that the neighborhood organizations should beempowered-that is cities and States should not get revenue sharing orcommunity development block grants unless they either empowertheir existing neighborhood organizations-to have a voice in spendingthose funds or unless they create genuine neighborhood governments.Either would be sufficient and is the kind of step that needs to betaken in community development block grants. This would say tothe neighborhoods we really value your opinion in the spending ofFederal funds.

Second, in terms of funding itself, the neighborhoods, if they areto assume more public duties, need a Federal tax checkoff plan verysimilar to the Presidential tax checkoff. Such a system would allowcitizens in a particular ZIP code zone or census tract to simply checka box and say, yes, they are willing to support their communityorganization. Nationally, you need set up only a very small officesuch as the existing office of revenue sharing to allow all 501(c) (3)organizations to apply to receive these checkoff funds. If organizationsare qualified, they would get the funds. Such a funding mechanismwould have the least strings, the least restrictions, and the mostimpact on funding community organizations.

Let me just say one or two words about neighborhood governmentand then I'll quit. I know I've gone a lot longer than witnesses arenormally allowed to and I won't try to wear your patience too thin.

I've never heard people in Congress speak of neighborhood govern-ment. There may be some Congressmen who believe in it, but I've

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never heard it spoken of in these halls. Neighborhood government isimportant. This country began with a vision like Jefferson's thatcounties ought to be divided into wards and every ward ought todecide the local issues locally, the State should then decide the ques-tions at its level and the National Government would decide the rest.There ought to be real federalism from the very bottom and at thelocal level there ought to be direct participation in government.

When you come from a city like Chicago with 3,000,000 people,there's no direct participation. There is participation at election time,but the voice of the people is stifled during the next 4 years. The sameis true in communities throughout the country. Neighborhood govern-ment returns us to a scale in which citizens are citizens instead of beingconsumers of government. If citizens are to have a voice, they musthave a place where they can have a voice. Neighborhood government iswhere we citizens have our place.

Neighborhood government would have essentially four components.It would, 'first of all, have a legislative branch which is often in ourChicago communities called a ward assembly, but in other parts of thecountry these units are often called neighborhood advisory councils.These would be places where citizens could assembly once a month andlegislate local matters and advise officials at higher levels of govern-ment what they should be doing in our interest.

Second, there ought to be an administrative branch to neighborhoodgovernment. In Boston it's called "Little City Halls." There ought tobe a place where in every local community and there ought to be onepublic official who is in charge of delivering public services. Thisofficial is what the suburbs call city managers. We want a neighbor-hood manager and we want to have a neighborhood advisory councilto direct the activities of the neighborhood manager. This localneighborhood control, will allow services to be properly and humanelydelivered in ways which they are not currently.

Third, we believe that there ought to be special units of neighbor-hood government for planning, such as community zoning boards andtraffic review commissions. In my community we created a communityzoning board. We downzoned our lake front land so no more highrises could be built. Previously, we had the density of Tokyo in part ofmy community. We stopped new high rises because it was not healthyfor our community to continue to receive more and more people withno more facilities.

Traffic review commissions and crime commissions are also neededat the local level. These are special administrative branches ofgovernment.

Finally, there needs to be some way to tie all of these neighborhoodgovernments together with something like a congress of neighbor-hoods in a city or county that allow all of the local neighborhoods toassemble directly, face-to-face, to advise mayors and county execu-tives as to what ought to be done in the interest of the neighborhoodsand all the people of the neighborhood.

This idea is so simple. Jefferson said it almost in these wordsliterally 200 years ago, but we have grown so vast that we have takenthe power away from the local citizens, away from the place wherethey can get it, and we have deposited it elsewhere. It's time toredivide the power so citizens can reclaim it. We want not only

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neighborhood empowerment now but neighborhood government in thefuture. We would hope this would at least begin a dialog or dis-cussion about the proper forms of neighborhood government and theproper forms of neighborhood empowerment. We would hope thatthis Congress could indeed be a part of shaping a new nation, a newAmerica, that would be adequate to the challenges that we face.

We in the neighborhoods are willing to do our share. We are willingto take responsibility. We are willing to deliver services. We arewilling to see that the citizens are treated fairly. We are willing tocreate mechanisms of participation. But we have to be empoweredand we have to be funded. Thank you.

Representative REuss. Thank you, Mr. Simpson.[The prepared statement of Mr. Simpson, together with the

attachments referred to, follows:]

PREPARED STATEMENT OF DICK SIMPSON

Empowering America's Neighborhoods in the 1980's

Neighborhood leaders are secure in their faith that the needed reaffirmationof American values and the revitalization of American institutions can onlyoccur in our local communities which are the true building blocks of this nation.Neither interest groups, political parties nor our national government cani, bythemselves, save our country from decay. Every previous civilization, once itbegan to decline, once it lost its ideals and the vitality of its institutions, continuedits downward course. In the past three decades, America has lost much of itsidealism and the proudest institutions of our democracy have become dysfunc-tional. Neighborhood leaders from their direct experience know that we canreverse this downward course. We can still save our civilization if we turn topeople living in communities across the land.

Only in our rural communities, suburbs, and inner city neighborhoods caliwe breed the hearty citizens essential to a democracy. Only in our communitiescan services be delivered humanely. Only neighborhoods can provide a publicspace where democratical government can thrive. Thus, American neighborhoodsare the key to recapturing and implementing our original, American ideas.

Why is this so? Our credo can be summarized this way:" Rediscovering democracy, we join with neighbors in communities across

our land to create a neighborhood movement built upon the belief that peoplecan and should govern themselves democratically and justly. The neighborhoodis a political unit which makes this possible; since the smallness of the neighbor-hood enables all residents to deliberate, decide, and act together for the commongood. . . . "People organized in neighborhoods, responding to their fellowresidents as human beings and families, rather than as clients, are best able toprovide needed services. People organized in neighborhoods are best able to pro-nounce and amplify in firm tones the voice of citizens so as to command therespect of government and private institutions. People organized in neighborhoodassemblies are best able to create government under their control." Thus, wesaid in our National Neighborhood Platform adopted in 1979 and so we reaffirmtoday.

The National Neighborhood Platform is a unique document developed at 47local conventions in cities and towns across America. These local conventionswere attended by 10,000 neighborhood leaders who drafted more than 1,000resolutions on the problems facing their diverse communities. These local con-ventions then elected, according to their attendance, delegates to represent themat the National Association of Neighorhoods Convention in Louisville, Ken-tucky from November 9-11, 1979. At the Louisville national convention theselocal resolutions were refined and adopted by elected delegates into the finalninety planks of the finished platform.

Thus, we are justified in pronouncing the National Neighborhood Platform asthe legitimate voice of America's neighborhoods. It harkens back to the principlesof the founding of our republic and forward to the time when democratic institu-

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tions will be our hallmark once more. And it specifically addresses our problemof institutions which have grown too large and too remote, which produce apathyand a sense of importence in individual citizens. Faced with these problems ourplatform declares:

"In response, we now turn to our neighborhoods and communities to fulfill ourhuman capacities as citizens by participating in making those decisions whichdirectly affect our lives. Rediscovering citizenship in our neighborhoods, wereaffirm the principles of freedom, justice, and equality upon which our nationwas founded. We believe that those who are affected by the decisions of govern-ment must be consulted by those who govern; that it is the right of citizens tohave access to the instruments of power; and that it is their duty to learn to usethem effectively and wisely."

Thus, in addition to solutions to particular problems such as housing displace-ment, unemployment and crime, we sought in our National Neighborhood Plat-form two principal goals of neighborhood empowerment and neighborhoodgovernment. We seek immediately to empower existing neighborhood organiza-tions including block clubs, church groups, Parent Teacher Associations, schoolcouncils, homeowner associations, tenant associations, youth groups, communitydevelopment corporations, cooperatives, and umbrella community organizations.We seek in the long run to move toward neighborhood government by whichcitizens will be able to control those local governmental decisions which deeplyand directly affect their lives.Accomplishments of America's Neighborhood Organizations

There are more than 10,000 neighborhood or community organizations in thiscountry from Boston to San Francisco, from Houston to Honolulu. They rangein size from a dozen adults in a local block club to umbrella community organi-zations with literally thousands of members. There are basically of three types ofneighborhood organizations: (a) neighborhood service delivery groups, (b) com-munity pressure groups, and (c) neighborhood governments. But, there is alsoa rich array of necessary neighborhood institutions which include financial insti-tutions, businesses, and religious groups among others which are needed in everyneighborhood.

In Pittsburgh, Professors Roger Ahlbrandt and James Cunningham of theSchool of Social Work at the University of Pittsburgh, inventoried the city's95 neighborhood organizations and discovered that 27 were service deliveryorganizations, 20 were community pressure groups, and 48 were a hybrid of thetwo approaches. If the study had been made in Washington, D.C. or many othercities the Neighborhood Advisory Councils would have provided an equally largenumber of neighborhood governments.

Generally speaking the number of neighborhood and community organizationsacross the nation are growing, becoming larger in both their membership andtheir power, and are becoming the principal organizations to connect individualcitizens with their society and government.

I am attaching to my testimony today six case studies of Chicago neighborhoodorganizations and institutions which provide services from food for the hungry;credit for community residents, health care, neighborhood shopping, and housing,to neighborhood government institutions which provide governmental controlof zoning, traffic regulations, and city ordinances. These case studies representthe diversity of neighborhood institutions and their contributions to communitylife. Sixteen case studies by the National Association of Neighborhoods in twelvecities across America demonstrate that these Chicago model neighborhood insti-tutions are not unique. Nor is neighborhood government unique. It now existsin some form in 100 American cities.

Often neighborhood organizations working in partnership with governmentand business can provide major services and community improvement withoutexpending any funds. For instance, Professor James Cunningham reports thatthe Midtown Citizens Association of Wichita during the past eight years hassaved the modest frame homes of its community, diverted industrial developmentand a proposed expressway, banned truck traffic from interior streets selecteda site for a public swimming pool, launched a Midtown Construction Company,delivered 4,000 organization newsletters, brought meals to ill elderly, sponsoredneighborhood celebrations and a midget football league on a budget of $1,000 ayear raised in its own neighborhood.

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The Effect of Federal Budget Cuts on NeighborhoodsBut many neighborhood services do cost money and federal budget cuts will

hurt the neighborhood movement. Sandy Solomon and Ken Kirchner of the Na-tional Urban Coalition have compiled the following analysis of the cuts as theyaffect neighborhoods. Eliminating necessary programs will obviously have adrastic impact on the lives of millions of Americans and thousands of Chicagoanswho live in urban neighborhoods. I am especially concerned about total eliminationof the following programs:

(1) The Legal Services Corporation, which in 1980 served over one million poorpeople 18 percent whom had housing related cases and 13 percent of whom hadincome maintenance problems. If Legal Services are eliminated there is no com-parable alternative in the private sector by which poor people can secure theirlegal rights. Neither "pro bono" lawyers nor public interest laws firms could fillthe gap.

(2) VISTA. In 1977, ACTION found that each VISTA volunteer generated anaverage of $35,000 in resources for his or her community. In one year, four VISTAvolunteers on the West side of Chicago generated jobs for 1,200 unemployedpeople. Clearly the VISTA program is cost-effective and should not be eliminated.

(3) The Community Services Administration, which provides funds at the locallevel to administer local programs, mobilize resources, coordinate service delivery,and provide for the needs of low income people. If these programs are put into ablock grant program, it is expected that most of the community action agenciesand their current activities will be eliminated.

(4) The Neighborhood Self-Help Development Program, which providesfinancial assistance to neighborhood organizations to undertake specific projectsto revitalize their communities. Projects, planned and run by neighborhoodresidents, have involved housing rehabilitation, construction, and commercialdevelopment. Every dollar of the $14 million spent to date by this program hasleveraged $14 of investment from other sources.

(5) CETA. The administration's proposal to end all Public Service Employ-ment (PSE) will mean lost employment opportunities for approximately 500,000people, 41 percent of whom are minorities, and it will also mean a loss of servicesto neighborhood groups and local governments. In Chicago alone it is estimatedthat 6,300 CETA jobs will be lost. To provide the services which they have beengiving Chicagoans will require a massive increase in local property tax.

I am also concerned about these programs which will be deeply cut even if theyare not eliminated:

(1) Title XX Social Service Programs, which provide matching grants tostates for social services for the poor, including day care, child abuse and childneglect programs, and services to the elderly.

(2 The Community Development Block Grant Program, which allocatesfunds to local governments to finance a wide range of housing community devel-opment and economic development activities. A portion of these funds areallocated to neighborhood-based organizations for economic development andneighborhood revitalization projects and some of these funds are spent in waysthat do promote community development.

(3) Section 502 Loan Development Company Program of the Small BusinessAdministration, which offers guranteed and direct loans to qualifying localdevelopment corporations either profit or non-profit corporations authorizedto promote and assist small business growth and development in the communitywhere they operate. Currently about 500 loans are made yearly with majorurban neighborhoods receiving a larger number of the loans in recent years.Small businesses are a major source of new jobs in urban neighborhoods.

(4) The Subsidized Housing Program, which provides rent subsidies to lowincome tenants living in Section 8 housing, public housing and other HUD subsidizedhousing units. The administration proposed raising the amount of rent con-tribution from 25 to 30 percent of tenants' adjusted income. Ten thousand unitsare to be cut in the Section 8 Moderate Rehabilitation Program and Govern-ment National Mortgage Tandem Financing is eliminated. In 1979, those in thepoorest fifth of our population spent an average of 47 percent of their cash incomeon rent. For people who work in our neighborhoods, there is a great, unmet needfor more-not less-affordable housing. Section 8 housing should be increase -,not cut back.

(5) Community Health Centers. The Administration proposed integratingthis program into the health services block grant in fiscal year 1982 while re hicingits fiscal year 1981 funding of $325 million by 25 percent. States would be free

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to use their discretion to fund community health centers; 932 health centerprojects in 862 cities would face elimination or reduced support. The impactwould be felt by those neighborhood residents who depend upon these healthcenters for medical and health care services.

The total impact of these and other cuts in social services will cause needlesssuffering to poor and working class people in urban neighborhoods. Eliminationof Legal Assistance, Community Service, Neighborhood Self-Help along withcuts in Title XX, CDBG, and Section 8 housing cut essential direct services forthem. Moreover, elimination of VISTA and public service CETA employees takestaff from the voluntary community and neighborhood organizations which serveboth the poor and the middle class. The cut of funds to local government willmean increased local taxes which the middle class will pay. Middle class collegestudents will lose their federal grants and student loans. And cutting aid to thepoor will increase crime and social unrest in ways that will harm the middle classas well as the poor.

In short, American neighborhoods will be greatly harmed by the proposedbudget cuts. The consequences will be worsened by state and local governmentactions. In Illinois, for example, Governor Thompson has proposed an additional$200 million in state budget measures which will cut medicaid, mental health,day care, and education so as to close out-patient clinics, mental health facilities,day care centers, and to eliminate medical services for the working poor, specialeducation for the handicapped, and bilingual education. At the same time, MayorByrne in Chicago is cutting funds for administering social programs by privateagencies in order to preserve city patronage positions which will continue to bepaid for by the limited remaining state and federal funds.

While the bulk of my testimony today will concern ways in which the neighbor-hoods might be empowered to play an even greater role in the 1980's, I would beremiss if I did not point out how severely the federal budget cuts with their stateand local equivalents will deter neighborhood organizations from reaching theirfull capacity. I would urge the Congress to consider restoring at least some of themost fundamental of the neighbornood related cuts, among which would be theten which I have outlined.Empowering Neighborhood Organizations

Despite the budget cuts, the 1980's are a time politically when a consensusseems to be emerging that neighborhood organizations should be empowered.Both major political parties have adopted such statements in their 1980 partyplatforms.

The Democrats, following the Carter Urban Policy, have emphasized a partner-ship with neighborhoods and have recognized the importance of achieving com-munity development without housing and resident displacement. They said intheir 1980 platform plank on neighborhoods:

During the 1980s we must continue our efforts to strengthen neighborhoodsby: Making neighborhood organizations partners with government and privatesectors in neighborhood revitalization projects. Continuing to make neighborhoodconcerns a major element of our urban policy. Developing urban revitalizationprograms that can be achieved without displacing neighborhood residents. Con-tinuing to reduce discriminatoly redlining practices in the mortgage and insuranceindustries. (1980 Democratic Platform Committee, 1980, pp. 46-47).

This is much less sweeping than the general principles enunciated in the NationalNeighborhood Platform but it demonstrates a recognition of the importance ofneighborhoods to revitalizing the cities which is a first step toward grantingneighborhood empowerment.

The Republicans also recognized neighborhoods in their 1980 platform andarticulate a much broader, if conservative, view of the role of Americanneighborhoods:

The quality of American neighborhoods is the ultimate test of the success orfailure of government policies for the cities, for housing, and for law enfoi cement.. . .We are . . . committed to nurturing the spirit of self-help and cooperationthrough which so many neighborhoods have revitalized themselves and servedtheir residents.

The American ethic of neighbor helping neighbor has been an essential factorin building our nation. . . . To help nongovernmental community programsaid in serving the needs of poor, disabled, or other disadvantaged, we supportpermitting taxpayers to deduct charitable contributions from their federal in-come tax whether they itemize or not. . ..

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The city is the focus for the lives of millions of Americans. Its neighborhoodsare places of familiarity, of belonging, of tradition and continuity. They arearenas for civic action and creative self-help. The human scale of the neighbor-hood encourages citizens to exercise leadership, to invest their talents, energies,and resources, and to work together to create a better life for theirfamilies. .

A Republican Administration will focus its efforts to revitalize neighborhoodsin five areas. We will:

Cut taxes . . . and stimulate capital investment to create jobs;Create and apply new tax incentives . . . to stimulate economic growth . . .Encourage our citizens to undertake neighborhood revitalization and preser-

vation programs in cooperation with three essential local interests: local govern-ment, neighborhood property owners and residents, and local financial institutions;

Replace the categorical aid programs with block grant or revenue sharingprograms. . . .

Remain fully committed to the fair enforcement of all federal civil rightsstatutes....

The revitalization of American cities will proceed from the revitalization ofthe neighborhoods. Cities and neighborhoods are no more nor less than the peoplewho inhabit them. Their strengths and weaknesses provide their character. Ifthey are to grow, it is the people who must seize the initiative and lead. (1980Republican National Convention Platform, 1980, pp. 13-14).

Thus, the Republicans rather than stressing a partnership between the neighbor-hoods and the federal government with the federal government taking the leadas the Democrats propose, rely much more upon self-help efforts to be generatedby local voluntary neighborhood groups which are aided by overall governmentaltax policies which return funds to the individual taxpayer and local business forreinvestment in their communities if they choose to do so. Republicans hopethat more will be done by the neighborhoods and by local governments and lessby the federal government.

There has also been official governmental recognition of the importance ofneighborhood empowerment. The National Commission on Neighborhoods ap-pointed by the President and including Members of Congress went even furtherin their analysis of the role of neighborhoods currently and in the power whichthey recommend giving neighborhoods in the future. The commission put thechief issue of empowerment most succinctly:

The neighborhood movement represents a demand for self-government in thedaily lives of people as well as in the dry abstraction of law. It represents a demandfor returning to the residents of neighborhoods the capacity for effective influenceand policy-making. It represents a demand for de-bureaucratizing America.(National Commission on Neighborhoods, 1979, p. 10).

The National Commission on Neighborhoods was also very clear on the impor-tance of the neighborhood in the delivery of humane services. In its final reportthe Commission said:

Today, the neighborhood is still the place where people develop those face-to-face relationships that give them support and assistance in times of need. Thecommission believes that neighborhood service systems can and should be builtupon these informal support networks and upon the complex of human scaleorganizations that operate at the neighborhood level-the churches, small busi-nesses, ethnic organizations, and civic groups that contribute so much to the rich-ness and diversity of contemporary urban life. The Commission believes, moreover,that public-private partnerships at the neighborhood level can overcome thebureaucratization of services that tend to sap self-reliance, weaken voluntarism,and inspire alienation.

The basic assumption underlying the work of the Commission is that neighbor-hoods must be empowered to develop their own service systems, using self-helpmechanisms that already exist in the community ....

By using the mediating structure of the neighborhood and its local institutionsas channels for human services, they can be organized and delivered in ways thatmore adequately meet the needs of individuals. (National Commission on Neigh-borhoods, 1979, pp. 217, 234, and 235).

Thus, at least governmental commissions have begun to recognize that all serv-ices can not be properly delivered by a remote national government. To be de-livered well they have to be delivered in the neighborhood and at least partiallydelivered by neighborhood institutions.

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The Commission went on to argue that neighborhoods are not only the locusfor service delivery but also are proper units for citizen participation.

Neighborhoods are human in scale and they are immediate in people's ex-perience. Since their scale is manageable, they nurture confidence and sense ofcontrol over the environment. Neighborhoods have built-in "coping mechanisms"in the form of churches, voluntary associations, formal and informal networks.The neighborhood is a place where one's physical surroundings become a focus forcommunity and a sense of belonging.

Neighborhoods provide a focus for motivation and concern. People care aboutothers they know on a face-to-face basis. Even the most devastated neighborhoodshave some networks and support systems, with some human resources and capac-ities upon which to build. Neighborhoods provide the building blocks for citiesand a unit for meaningful participation. (National Commission on Neighbor-hoods, 1979, p. 276).

The Commission links citizen participation explicitly with voluntary activitiesand with community organizations:

A consistent theme of the case studies conducted by the Commission wasthe importance of voluntary activities, which included the numerous hourscontributed by community leaders and residents, fund raising efforts such asdues and donations, and contributions of staff or facilities by local church groupsor private welfare agencies. These voluntary activities are the essence of citizenparticipation. (National Commission on Neighborhoods, 1979, p. 295).

Thus, the Commission recognized the importance of returning policymakingpower to the neighborhoods, debureaucratizing America, using neighborhoodinstitutions to deliver more of the human services, and generally empoweringneighborhoods by improving their capacity for citizen participation in policy-making and for delivery of social services. They also recognize that both com-munity action groups and neighborhood governments in the form of advisoryneighborhood councils are part of the empowering effort. Thus the commissionwent further in this governmental report than the political parties were willingto affirm in their party platforms.

Decentralization of government and neighborhood empowerment is supportednot only in the United States but in most industrialized nations of the world.

Of the European nations Italy is probably most advanced. Bologna first adopteda policy of decentralization in 1963 which by 1974 delegated the following powersto its neighborhoods: (1) formation and approval of neighborhood budgets; (2)release of building permits; (3) planning of neighborhood public facilities; (4) plan-ning of the neighborhood commercial network; (5) implementation of the processof social management of all neighborhood public services; (6) neighborhood trafficplanning; and (7) planning for the use of municipally owned land in the neighbor-hood. Then in 1976 Italy adopted national law 278 which established a frameworkfor neighborhood government in all Italian cities with more than 40,000 people.As this law has been implemented in cities-such as Florence it has meant dividingthe city into neighborhoods, electing neighborhood councils at official city elec-tions, giving them authority over local services such as the parks, rehabilitatingvillas as historic landmarks not for housing but as community centers run by theneighborhood councils, allocating $300,000 to each neighborhood to spend as itchooses within general city guidelines.

Norway is perhaps the second most advanced European nation in decentraliza-tion experiments. The first official Neighborhood Council system was establishedin Oslo in 1973 despite attempts throughout the 1960s to achieve them. Thecreation of Neighborhood Councils has not required any change in laws becausethere was already provision for "municipal committees." There has been pressureto adopt new laws to change electoral and municipal jurisdictions to encouragefurther development of Neighborhood Councils but this has not yet occurred.Nonetheless 19 municipalities have officially established Neighborhood Councilsand 22 others have some type of special semi-public relationship with communityorganizations. All members of the Neighborhood Councils are appointed but themunicipal government is in many cases officially and legally required to consultNeighborhood Councils in their policy-making. Neighborhood Councils in Oslohave developed official neighborhood area plans to include "estimates of thepresent and future needs of the neighborhood . . . to become premises for theover-all city planning." Three of the ten urban municipalities with councilsprovide funds to their neighborhood councils which in Oslo amounts to between$15,000-$20,000 a year.

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Nor are Italy and Norway alone, A movement for greater decentralizationbegan in England with metropolitan reorganization and The London GovernmentAct of 1963 which created the two-tier government of Greater London. Thethirty-two autonomous boroughs are, of course, much larger than neighborhoodswith most of them having between 200,000-250,000 inhabitants but this de-centralization has sparked discussions of neighborhood government not only inLondon but in the smaller cities and towns. Several government committees andcommissions have called for neighborhood government and the Labor Partyappears now committeed to instituting neighborhood government when theyregain their power in Parliament. Most importantly, a national Association forNeighborhood Councils was founded in 1970 for the explicit purpose of creatingjust such a national system of elected neighborhood councils.

There is not time today to cover completely the experiments in Poland, Yugo-slavia, the Netherlands, Germany, and in other European nations with bothvoluntary neighborhood associations playing a greater role in cities and withmoves toward formal government decentralization. Each country has some uniqueexperience to contribute. The dominant fact, however, is the spontaneous growthof a neighborhood movement in all the industrialized nations which has sparkedan effort to empower neighborhood organizations and to provide neighborhoodgovernments with some powers, duties and authorities which have previouslybeen held only by the centralized government. This suggests that industrializa-tion itself and the achievement of a mass, urban society demands reaction andcounterdevelopments towards decentralization to overcome the inevitable prob-lems of impersonal governance, alienation, and in order to mobilize the voluntarycapacities of people living in communities to tackle their own problems moresuccessfully than a remote, bureaucratic government alone can manage.

In light of these political and governmental changes in the United States andthroughout the world and, particularly, in light of the budget cuts to existinggovernmental programs whose services are now expected to be performed byneighborhood and community organizations, we in the neighborhood movement,urge this Congress to pass neighborhood empowerment legislation to encouragethe creation of new neighborhood groups and to strengthen existing neighborhoodorganizations. Specifically, we need passage of legislation which will provideneighborhood organizations:

(1) A stronger voice regarding how federal and state funds are spent in theirneighborhoods;

(2) Authority to prepare and present a neighborhood development plan toguide future federal Revenue-sharing and Community Development Block Grantexpenditures;

(3) The ability and authority to monitor all government programs in theirneighborhoods;

(4) Public funds or grants to allow them to be staffed sufficiently to carry outthese enlarged public duties;

(5) The ability to define their own geographic boundaries;(6) The right to public access to city and state government documents which

are withheld from citizens now in many jurisdictions;(7) Notice of all plans for city programs in their neighborhoods in advance,

with the right to local public hearings on matters of special concern, and therequirement of a neighborhood impact statement on all public works or programsfunded by government funds.

We are, of course, attempting to pass "neighborhood empowerment" ordinancesand laws at the state and local government level in various sections of the country.However, the only sure guarantee that our rights will be granted uniformly is togrant them by federal legislation. Either a single neighborhood empowerment lawor a series of companion pieces of legislation would serve our purpose.

Particularly, before this Joint Economic Committee, I wish to stress the needfor amendments to existing federal legislation which I believe would significantlyempower neighborhood organizations. I speak of giving neighborhoods a legitimatevoice in governmental decision-making and providing a solid financial base fortheir newly assumed public duties. The first requires amending the CommunityDevelopment Block Grant and Federal Revenue Sharing legislation and thesecond requires initiating a neighborhood organization income tax check-offsimilar to the presidential campaign income tax check-off.

In the first case, citizen participation standards in CDBG and Federal Revenuesharing need to be expanded. No county, city, or community should receive thesegeneral federal funds if they do not provide for formal recognition of existing

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neighborhood organizations or establish new Units of neighborhood governmentwhich design their own neighborhood development plans and which are grantedthe opportunity to influence effectively city plans for expending these federalfunds. All city programs and projects which rely on these funds should be requiredto file a neighborhood impact statement similar to the currently required environ-mental impact statements. Neighborhood organizations or new units of neighbor-hood government should be allowed to file challenges to these neighborhoodimpact statements which would be considered by federal agencies before thosefunds for the specific neighborhood programs and projects were released. In thecase of objections by neighborhood governments, a partial veto power of federallyfinanced projects in their community might be granted.

All too often over the last decade federal block grant funds have been spentby the local government without real involvement by the neighborhoods. Tokenpublic hearings have not provided a real opportunity for effective participation.In the City of Chicago 14 administrative complaints have been filed by variouscommunity and civic organizations against CDBG programs but HUD hasfailed to use sanctions against the city. If neighoborhoods are to provide thelocus for citizen participation in government then neighborhood organizationswill have to be granted real powers that effect actual expenditures.

Second, if we want neighborhood organizations to assume more of the burdenin providing necessary services humanely in their own community they musthave a regular financial base in addition to the small voluntary contributionson which they now subsist. The best way to provide this financial base, is throughan income tax checkoff. It involves the least bureaucracy and the least restrictionson funds. As of 1978, the presidential campaign checkoff of $1 per taxpayerprovided $35.6 million a year.

The mechanics of such a neighborhood income tax checkoff system have yetto be worked into actual legislation. But, in essence, any community organizationwith a 501c3 tax status would be eligible to receive tax funds. A small officesimilar to the office of Revenue Sharing would certify an organization's eligiblityto receive funds checked off by taxpayers in specific postal zip code zone orcensus community areas. Taxpayers could then eaimark a small portion of theirtax funds to support neighborhood organizations within their own community.Neighborhood organizations would be motivated to provide the services necessaryto gain the support of taxpayers in their community. The final result would bebetter services for taxpayers at modest cost and the opportunity to have aneffective voice in the affairs of their own neighborhood through active communityorganizations.

I am aware that there are those who oppose empowering existing neighborhoodorganizations. Some opponents are uncertain about what is a neighborhood andwhat standards a neighborhood organization should meet if it is to be grantedofficial, quasi-governmental powers.

A neighborhood can be defined simply as a community of people living in acontiguous geographical area which the residents themselves recognize as aneighborhood. Like a nation, it usually has some common features such as commonlanguage, ethnicity, race or history but no one of these characteristics is required.

However, for the purpose of granting formal powers, such as a right to developneighborhood plans, a right to dispute neighborhood impact statements, a neigh-borhood income tax checkoff or a federal neighborhood grant program, Congressmight define these duties so that only neighborhood with more than some number,say between 10,000 and 50,000 residents, could qualify. Similarly neighborhoodorganizations eligible to exercise these powers might to elect to be open to allresidents in the neighborhood to become members, to elect their own officers anddetermine their organization's policies by democractic procedures.

Other opponents oppose "neighborhood empowerment" for fear that neigh-borhoods will use these powers parochically and will discriminate against minoritygroups. While neighborhood leaders reject this fear as unfounded, we also believethat discrimination is unlawful no matter which level of government might prac-tice it. Thus, we would be glad to have any federal neighborhood empowermentlegislation specifically prevent its use to aid discrimination and would supportany reasonable restrictions and safeguards.

Neighborhood Government in the 1980's-In order for us to deal effectively with housing displacement, unemployment,

crime and all of the serious problems which beset our neighborhoods and whichcan not be solved solely by other levels of government or by the private sector

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without partnership with neighborhood businesses, organizations, and residentswe favor neighborhood empowerment now. But we also favor neighborhoodgovernment as the long term solution to our problems.

Neighborhood government is in many respects as old as the practice of demo-cratic government. It is similar to Athenian demociacy 2,500 years ago as wellas our own New England town hall meetings 200 years ago. It was vigorouslyrecommended by Thomas Jefferson as the means of achieving the revolutionaryideal of Republican government. As he said:

[Republic] means a government by its citizens in mass acting directly andpersonally according to rules established by the majority; and that every othergovernment is more or less republican in proportion as it has in its compositionmore or less of this ingredient of the action of the citizen.

Edward Dumbauld explains the practical aspects of Jefferson's theory ofgovernment as follows:

With regard to the machinery of government, Jefferson also favored the prin-ciple that all questions should be decided by those whom they concern. Thismeant the application of a system of federalism or "government gradation."Local concerns would be dealt with at the local level. Jefferson favored the divisionof counties into "wards," for the administration of affairs affecting only groups ofthat size. County, state, national and international concerns would be handledby progressively wider units in the political hierarchy.

Today neighborhood government experiments, similar to those Jefferson en-visioned and ranging from neighborhood advisory councils to "Little City Halls",are occurring in more than 100 American cities. The National NeighborhoodPlatform recommended that in the future neighborhood governments be grantedthe following powers:

A. The ability to revise tax revenues.B. The ability to incur bond indebtedness.C. The ability to enter into interjurisdictional agreements.D. The ability to settle neighborhood disputes.E. The ability to contract with the City or with private providers of services.F. The ability to conduct elections.G. The ability to sue and be sued.H. The abilitv to determine planning, zoning and land use.I. The ability to exercise limited eminent domain.J. The ability to undertake public investment.K. The ability to provide public and social services.L. The ability to operate proprietary enterprises.Based upon experiments around the country and particularly from my own

44th Ward in Chicago, I think we can further specify the type of governmentwhich neighborhood leaders would prefer. In large American cities like Chicagothere would be four components to neighborhood government:

(1) Ward Assemblies or Neighborhood Advisory Councils in each neighborhoodof the city or least in all neighborhoods in which residents indicate their willingnessto participate more fully in government by collecting petition signatures.

(2) Administration decentralization in the form of "Little City Halls" withWard or Neighborhood Managers and Neighborhood Service Cabinets to co-ordinate the delivery of city services in each neighborhood.

(3) Specialized units of neighborhood government for planning, such as Com-munity Zoning Boards and Traffic Review Commissions.

(4) A city-wide, preferably metropolitan, Congress of Neighborhoods withrepresentatives from every ward, neighborhood, and suburb to guide general cityor metropolitan policy-making.

The central unit of neighborhood government is the legislative, participatorybranch. These Neighborhood Advisory Councils or Ward Assemblies should have aminimum of at least fifty voting members. Some will be larger and a few will besmaller according to the population in the neighborhood they serve and represent.These voting members may be chosen by several different methods: (1) membersappointed by the Mayor and the City Council from among both communityresidents and neighborhood businessmen, (2) community organization membersselected by each group with more than 25 or 50 members, and (3) at-large, electeddelegates chosen either at mass public meetings for the entire neighborhood, orpreferably elected at meetings of small geographical areas or precincts within theneighborhood. As we have seen from the European experiments, it would also bepossible to elect them directly as we elect City Council members in the UnitedStates.

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In addition to these voting members of the Neighborhood Advisory Councils,elected officials such as City Councilmen and State Legislators should be ex-officiomembers-perhaps even serving as chairpersons of the NAC's. All residents ofthe community also should be automatically non-voting members with the rightto attend and to address the NAC.

The responsibilities and duties of the Neighborhood Advisory Councils orWard Assemblies should include:

A. To consider the needs of the neighborhood it serves, and shall cooperate,consult, assist and advise any public official, agency, local administrator or locallegislative body with respect to any matter relating to the welfare of the neighbor-hood and its residents;

B. To meet regular with its City Councilmen to advise them on the specificneeds of the neighborhood and on pending city or metropolitan legislation;

C. To consult with city and other governmental agencies on the capital needsof the neighborhood, participate in capital and operating budget consultations,and shall hold public hearings on the capital project and service needs of thecommunity;

D. To prepare comprehensive and special purpose plans for the growth, im-provement, and development of the neighborhood. If a separate CommunityZoning Board and Community Planning Board are not established it should havethe power to review and decide at least as the agency of first hearing upon appli-cations for zoning variations and zoning map amendments and amendments todevelopment plans.

To fulfill these duties the NAC's must meet regularly at least once a monthand must be provided with a small full time staff to prepare for these meetings.

The second, more administrative unit of neighborhood government is whatsome cities such as Boston call "Little City Halls" and what the suburbs havecalled for years "City Managers". Obviously, inherent in the concept of neighbor-hood government is the idea that cities will be divided into Wards or Neighbor-hoods. These local units under the guidance of their own NAC's would hiretheir own Ward or Neighborhood Manager to coordinate the delivery of cityservices to the community. He or she would be charged not only with coordinatingservice delivery but with handling all service complaints, presiding over meetingsof the Neighborhood Service Cabinet, and carrying out those special programsand projects assigned to him or her by the NAC's.

In addition to the Neighborhood Manager, a Neighborhood Service Cabinetcomposed of various city agency officials and representatives from the NACwould be responsible for coordinating and planning service delivery in the ward.Thus, the Cabinet should include representatives of the city agencies and otherlocal units of government (such as special districts) which provide services on aregular basis in the neighborhood, the Neighborhood Manager, City Councilman,and representatives of the Neighborhood Advisory Council. Special agenciesof government involved in neighborhood programs from time to time may alsobe invited to join in special meetings of the Cabinet. The Neighborhood ServiceCabinet should meet regularly, perhaps as often as once a week in the morning.

Many cities have experimented with administrative decentralization. DouglasYates concluded his research on the experiments of New York and New Havenas follows:

Assessing the decentralization experiments in terms of these hopes, we findthat the administrative justification (decentralization will produce greaterresponsiveness) is most clearly supported by the evidence. . . . Assessing theimpact of decentralization on different kinds of urban problems, we have foundthat "responsiveness" problems are most susceptible to treatment throughdecentralization.

The much longer suburban experience with City Manager has likewise dem-onstrated the value of decentralization in terms of responsiveness and moreeffective service. Thus, the idea of a Neighborhood Manager and Neighbor-hood Service Cabinet may be the easiest component of neighborhood governmentto implement and have accepted. It is much more difficult to gain the right forcitizens to participate in policy-making than to achieve administrativedecentralization.

If the NAC's do not themselves handle all planning functions, there will bea need for specialized units of Neighborhood Government to undertake them.These units provide a public forum in the community in which proposed zoningchanges and neighborhood plans from traffic patterns to public works projects

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can be discussed and decided. It is critical to take these decisions on the physicalfuture of our neighborhoods out of the private boardrooms of developers andsmoke-filled rooms of politicians. Citizens who will have to live with the con-sequences of these physical plans for decades must have a voice in making thesedecisions. Hearings before local boards provide for local input and somethingapproaching community control.

The final unit of neighborhood government, which has been proposed butnot implemented by Mayor Byrne of Chicago, would be a citywide or metro-politan Congress of Neighborhoods. It would be composed of neighborhooddelegates or representatives including at least one elected representative fromeach NAC, all NAC Chairpersons, all Neighborhood Managers. In additionthe Mayor, city councilmen, and department heads would serve as ex-officiomembers. The Congress of Neighborhoods would:

A. Improve commtnication and coordination among the NAC's city depart-ments, and the Mayor;

B. Suggest and help to implement citywide programs, plans, and projects ofassistance to the neighborhoods;

C. Provide feedback to the Mayor and city departments on proposed com-munity programs;

D. Review comprehensive plans that affect more than one neighborhood,mediate any disputes between NAC's and provide NAC's with information onplans which affect local neighborhoods.

The Congress of Neighborhoods should elect its own steering committee andadopt its own resolutions on public policies by a 33's vote of those neighborhooddelegates who are present and voting.

Many neighborhood leaders and political analysts believe that we should movetoward Metropolitan Government at the same time that we move toward Neigh-borhood Government. The metropolitan region is a better area than the innercity in which to plan for and to deliver government services. It also containsmore financial resources and provides a wealthier tax base from which to fundgovernment services.

The existing suburban size and governmental structures are in many waysparallel to the proposed neighborhoods and neighborhood governments and thusmerger between neighborhoods and suburbs may be easier to achieve than themonolithic city. But whether or not we move toward Metropolitan Government,it is important that we move to Neighborhood Government.

Neighborhood government is not just abstract political theory. Since 1972in Chicago's 44th Ward there have been experiments in neighborhood government,including a 44th Ward Assembly with elected delegates from each precinct andcommunity organization in the neighborhood. These delegates from 1972-1980by their deliberations mandated their Alderman's vote in the Chicago CityCouncil. Ward Assembly delegates have proposed new legislation which their

Alderman has introduced and projects which have been undertaken in the com-munity without requiring official city approval. Currently, under an Aldermanelected by the Chicago Democratic Machine, the Ward Assembly is being con-tinued as a body to advise the Alderman on needed services and legislation.

The accomplishments of the Ward Assembly are numerous. Perhaps mostimportant has been the existence of the assembly itself as a model of the typeof neighborhood government which is possible. The 44th Ward Assembly pro-vided the critical manpower to deliver a 44th Ward Almanac with reports onthe state of the neighborhood and a guide to city services to 30,000 families.It conducted a 44th Ward Fair every year with deplays of community art, photo-graphs ethnic foods, community organization exhibits, and children's games forthe 3,000 people who attended. The Ward Assembly has also undertaken specialdrives such as fund drives for local private food pantries which feed the hungry ofour community. In the area of services, the 44th Ward Assembly has identifiedsites for playlots and parks which have been built. It has planned truck loadlimits which keep trucks over 5 tons of weight off sidestreets. It has coordinatedspecial service efforts on trash baskets, garbage pickup and street sweeping.Moreover, Chicago's anti-relining law which has since become the model forcities throughout the nation was developed by the Assembly. It has offeredamendments to a variety of city legislation on issues such as unit pricing andand condominium conversions that have become law.

A Community Zoning Board, Traffic Review Commission, and Spanish-Speaking Assembly, Asamble Abierta, have also established in the 44th Ward

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since 1974. The Community Zoning Board has heard over 40 zoning cases in-cluding the controversial legislation to down-zone the Lakefront of our communityto prevent further high-rise construction. It has been upheld in all of its decisionsexcept one in which the community itself was divided. The Traffic Review Com-mission has modified one-way streets and approved stop signs and traffic lights.Asamble Abierta has undertaken a number of ambitious projects including suingthe City of Chicago for discriminating in the hiring of Latinos.

In my testimony today I will not seek to detail the successes and failures ofneighborhood government in the other one hundred American cities where it hasbeen tried. Given the successes which have been achieved, it is sufficient to pointout that neighborhood government is the only system which can allow for demo-cratic participation; it is one of the few means by which higher levels of governmentcan be held accountable by our communities; and it is the only system whichcan provide humane and responsive government services. It is for these reasonsthat neighborhood leaders are dedicated not only to empowering existing neighbor-hood organizations but to full neighborhood government in the future.

ConclusionNeighborhoods have not fared well in the previous Congresses. Little neighbor-

hood legislation has been introduced, few hearings such as this one have been held,and almost no significant neighborhood legislation has passed. However, neighbor-hood leaders still have expectations of this Congress. We expect Congress to adoptlegislation to provide more funds and to grant legal status to existing neighborhoodorganizations. We also expect Congress to stipulate that future federal funds inprograms such as Revenue-Sharing and Community Development Block Grants,will be given only to those states and cities which legally sanction and createneighborhood government or, at least, empower existing neighborhood organiza-tions. We believe that only in our local communities can the values and institutionsnecessary to save our country be born. We ask only the opportunity to performthis mission. Given legal authority and limited funds, we are confident of ourability to govern ourselves.

NOTE.-Attached to testimony are six papers on model neighborhood institu-tions entitled "Neighborhood Revitalization" and a copy of the "NationalNeighborhood Platform."

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NEIGHBORHOODREVITALIZATION

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The revitalization of urban neigh-borhoods is becoming a national pri-ority. Housing abandonment, indus-trial flight and the consequent loss ofjobs, declining levels of urban ser-vices, and environmental deteriora-tion all bespeak a reduction in thequality of urban neighborhood life.At the same time, restricted areas ofthe cities are being "regentrified,"rehabilitated, reconstructed, andrepopulated, with wealthier residentsdisplacing poorer ones. To redressthis imbalance in neighborhood de-velopment, institutional revitaliza-tion is a prerequisite.

Revitalizing the urban neighbor.hoods of America is really the task ofrevitalizing our American civiliza-tion. We need to rediscover ouroriginal American values of self-suffi-ciency, independence, democratic par-:cipation, and human development.To do so in our mass, technological,materialistic society requires the re-discovery of communities and ourneighbors. It requires building newinstitutions to put our old values intopractice in the "brave new world" inwhich we now live.

This series of papers examines casehistories of six key neighborhood in-stitutions, whose regeneration havehad a significant impact on theirneighborhoods. Other institutionscould be added to this list. It is earcontention that if several dozen keyinstitutions of this sort were func-tioning vitally in a neighborhood, itwould be a healthy, vibrant commu-nity. The institutions included in thiscollection of papers deal with the poh-ty of the neighborhood, its economicdevelopment, and the provision ofsupportive son-ices in neighborhoodsin Chicago,

Each of the papers identifies thespecific needs which were present in

urban neighborhoods and the new in-stitutions or institutional reformula-tions which address these needs.Each discusses their structure andstaffing, examining the balance be-tween paid and volunteer staff. Eachpresents the special problems and re-sistances encountered in the renewalprocess. Each contains a generaldescription of how such institutionsare built and how they cope with theproblems of their neighborhoods.

The first paper. "NeighborhoodGovernment" by Judy Stevens,reports on the experiment inChicago's 44th Ward, in which theAlderman covenanted with his con-stituents to share his power by meansof a legislative Ward Assembly, aTraffic Review Commission, and aCommunity Zoning Board. The paperreviews other instances of emergingneighborhood governance as well,and the means, both formal and in-formal, of instituting them:

The next three papers are con-cerned with the development of theneighborhood economy. Squire Lancereports on the unique efforts of theSouthtown Planning Association, us-ing quasi-governmental powerthrough the creation of a special tax-ing district for the regeneration ofcommercial development in theEnglewood community. JoannaBrown describes the employmenttraining and placement efforts of theSpanish Coalition for Jobs, head-quartered in Pilsen, Chicago's largestLatino community. Judith Wittnerexamines the ise of neighborhoodcredit unions and their relationship tothe cooperative movement, focusingupon the North Side Community Fed-eral Credit Union in the heavily Ap-palachian community of Uptown.

The last two papers in this seriesdeal with the mutual support urban

residents require of one another. BillMahin's article contrasts an estab-lished neighborhood service agency,the Jane Addams Center of the HullHouse Association in the Lakeviewcommunity, with the development ofa chain of free health clinics by theMedical Committee for HumanRights, which grew out of the CivilRights Movement. In "NeighborhoodReligious Organizations" Fred Hessrecounts the Ecumenical Institute'sefforts to redefine the relationship ofreligious organizations to their neigh:borhood as attempted in the FifthCity Community Reformulation Proj-ect in Chicago's Westside ghetto.

Many other institutions could havebeen included in this series, each ofwhich have been significantly ex-perimented with in Chicago neigh-borhoods: independent politicalorganizations, protest movements,community organizations, communi-ty controlled education projects, com-munity news media, housing rehablli-tation organizations, and nationalneighborhood pressure groups.Vibrant neighborhoods are com-pleaes of interrelated critical institu-tions. Those interested in regener-ating our nation's urban neighbor-hoods will necessarily be engaged inrevitalizing these neighborhood in-stitutions.

This collection of papers is thus acall to experimentation and to spreadthe word about experiments whichhave already met with local success.These papers are not meant to end adiscussion but to begin a dialogue,not to end experiments but to en-courage them. For we are newpioneers trying to make a home inAmerica's neighborhoods, to civilizethem, to develop them, and to cherishthem. In this task, we hope we will bejoined by many who follow.

The Editors

83-512 0 - 81 - 4

INTRODUCTION

22

Civics books have always given usthe "Tuesday" theory of democracy:citizens are essentially only voters.On an election-day Tuesday, everyso often, they decide who will repre-sent them in the day-to-day work-ings of government. The person theyelect is to use good judgement andknow what government should dofor them. If their legislator uses ter-rible judgement or fails dismally torepresent their interests. on anotherTuesday. somewhere down the road.they can elect someone else (if some-one else they like better happens tobe runningi.

The Tuesday theory of democracyignores a lot of days of the year,days when that legislator is decidingon programs and priorities. most ofwhich receive no publicity. andabout which no one writes letters.makes phone calls, or otherwise pro-vides public input. Is it any wonderthat, as decisions become more com-plex and government affects theaverage person more, people feel in-creasingly alienated from the deci-sions which affect their lives? Infact, they are alienated-364 days ayear. Is it any wonder that legisla-tors represent special interests andlobbyists and their own often limitedviews? They are accountable on onlyone day every couple of years. The"Tuesday" form of representation hasgiven us expressways we don't want,social programs which are mis-di-rected, and, too often. inaction whenwe need action on serious problems.

For every neighborhood that is leftout of government decisions and pol-icy-making, there is a legislator whodoesn't know enough about whatinsther constituents want and need.

To open up the governing process byencouraging the participation of ac-tive and able citizens is to give thatgovernment both the impetus andthe information it needs to be rele-vant. That is the pragmatic value ofneighborhood government. The mor-rality of neighborhood governmentis that it affirms the dignity and the

value of the individual and places inproper perspective the role of gov-ernment as servant of the citizenry.These are some reasons why we"ought" to have neighborhood gov-ernment. But, additionally, the factis, we need it.

The 1979 National NeighborhoodPlatform of the National Associationof Neighborhoods proclaims:

People organized in neighborhooda,responding to their fellow cei-deats as human being, and land-ies, rath.e than as 1eanta. are beat

able to provide needed services.People organized in neighborhoodsare best able to pronounce andamplify is firm tones the voice ofcitizens so as to command the -aapoas of goverament and privateinstitutions. People organized inneighborhood assemblies are bestable to create gevereaint undertheir control ... The neighborhoodis a political unit which nakes thispassible, sice the smallness of theneighborhood enables al residentsto deliberate, decide, and act to-gether for the common good.Our government jwisdictions havebecame so large, distant, and a-responsive to peoples' lives andcoacers that our communities arecOw, to a cerious degree, unge-

erned. Admiiistrative neglect cadprivate actions have endangeredthe safey and justice of our roesmunities. We behave it is the re-oponsibility of citizens in oar deaiocratic republic to gosrn theaffairs of their own neighborhoodconunouities in common delibera-tion. with baiding junisdictionalpower, asd in constitutional rela-tionship to other communities.

The Platform proposed the follow-ing power for neighborhood govern-ments: the ability to raise tax reve-nues, incur bonded indebtedness, toenter into interjurisdictional agree-ments, to settle disputes within theirboundaries, to contract with the cityor with private providers of services.to conduct elections, to sue and besued, to determine planning, zoningand land use, to undertake public in-vestment. to legislate within its

boundaries, to provide public andsocial services, and to operate pro-prietary enterprise.

However, neighborhood govern-ance, as it has actually existed in re-cent years. has been less formal. Ithas allowed people from a given citylegislative district (or communityarea, in the case of at-large citycouncil members) to meet regularlywith their representative and influ-ence the decisions helshe makes.Some cities have established com-munity assemblies, with memberselected by residents of precincts orother designated areas of severalblocks. These "delegates", meetingtogether with their legislator, mayhave a determining vote on what hedoes. In other cases, their action issolely advisory. In some cities, com-munities focused only on the imple-mentation of municipal programswhile in others their concerns in-clude all the concerns of the city.

CHICAGO'S 441h WARD ASSEMBLYOne neighborhood's eight year con-

tinuing experiment with neighbor-hood government provides an excel-lent model for those interested inreclaiming an active role in the gov-erning process and instituting neigh-borhood governance. Since 1972, inthe Lakeview community on Chi-cago's northside, citizens have beenmeeting once a month with their Al-derman in what is called the 44thWard Assembly.

The Assembly began in 1971 as aproposal made by Political Scientistand 44th Ward Aldermanic candi-date Dick Simpson. It received widecirculation as one of his major cam-paign promises. After he was electedSimpson put together a documentspelling out the Assembly's purpose,structure, and process of creation.This draft was shown to friends,community leaders, and a variety oforganizations: al had an opportunityto discuss it in small meetings.

The forms of neighborhood govern-meat in the 44th Ward have been

23

tinkered with continually, but thebroad outlines of purpose. structureand process remain unchanged. TheAssembly's purpose is to advise theAlderman od votes in the City Coun-cil, on his own legislative proposals,and on local programs that don't re-quire city approval. The Assemblycan, by a two-thirds vote, bind the Al-derman's vote in City Council except,theoretically, on Bill of Rights is-sues). The Assembly has also draftedlegislation which the Alderman in-troduces.

Delegates to the Ward Assemblyare both selected and elected. Localcommunity groups with at least 25members can designate, in any man-ner they choose, one delegate andone alternate. Two delegates areelected from each of the ward's 61election precincts. Elections are heldat precinct meetings to which eachhousehold is invited (by leaflet) andwhich the alderman attends. In the44th Ward, delegates are elected forone year.

The Assembly meets with the Al-derman on the second Sunday ofeach month. During the first hour.committees meet in four differenttopic areas; afterwards, the entiregroup meets together to discuss andvote on issues which have been pre-viously considered by a committee.

The Assembly agenda is set by aSteering Committee consisting ofthe Chairs of the standing commit-tees, ten other delegates (elected bythe Assembly), and the Alderman.The Steering Committee meets threeweeks before each Assembly to de-cide on the agenda, make any neededarrangements for speakers, and donecessary research on issues. TheSteering Committee insures that aspecific resolution for adoption or rejection is composed by the appropriate substantive committee andmailed, along with background infor-mation on the resolution, to Assem-bly delegates in advance of the meet-ing.

During its eight years of existence,the Ward Assembly has involved it-self in a wide range of issues. It hasdrafted legislation or amendments tolegislation in such areas as prostitu-tion, residential security, sidewalkrepair and condominium conversions.It has drawn up priority lists fornew park sites. It has prepared alengthy evaluation of a police-citizenvolunteer liaison program and suc-cessfully proposed changes in it. Ithas distributed flyers explaining ani-mal control laws, tax assessmentprocedures and housing rehabilita-tion grants. It has distributed award almanac and telephone listwith information on useful services.

A Ward Assembly is not withoutcost. A staff person, part or full-time,

is needed, as well as at least $3,000per year for direct expenses such astelephone, printing, paper, postage,and so forth. When salary and officeoverhead costs are fully considered,it becomes clear that the Ward As-sembly could not exist without fi-nancial support from the Alderman,the government, or some existingcommunity organization. Best of allwould be regular city appropriationsto pay the costs of neighborhoodgovernment. In the 44th Ward, thecosts were paid by the Alderman'soffice and by fund-raising efforts inthe neighborhood by the Assembly,itself.

SPECIALIZED UNITS OFNEIGHBORHOOD GOVERNMENT

The Ward Assembly has "spunoff" two more specialized mecha-nisms for local decision-making, theCommunity Zoning Board and theTraffic Review Commission. One ofthe most basic decisions affectingany neighborhood is how its landwill be used. Instead of making landuse decisions "downtown" by thosenot immediately affected. it makessense to decentralize these decisionsand give the neighbors who live withthe results a direct voice in them.

The Community Zoning Board inthe 44th Ward consists of seven mem-bers, from different geographic areasof the ward, selected by the alder-man and approved by the WardAssembly. It holds an open com-munity hearing whenever there is anapplication for a zoning change (forexample, a store to be built whereonly housing was allowed before, ora bank where homes now are). As anexample, one key decision in the44th Ward involved the CZB, alongwith community groups, successfullyobtaining the "down-zoning" of alarge section of the community to reduce future residential density.

After the hearing is held, the Com-munity Zoning Board decides ineach case what action should betaken. Many of its decisions are in-troduced as ordinances at the citycouncil by the alderman, or, some-times, property owners may introduce their own zoning ordinancesdirectly, but in the hearing cite thesupport of the alderman and theCommunity Zoning Board. Virtuallyall such ordinances introduced orsupported by Chicago aldermen areassured of council approval. Otherzoning ordinances are presented tohearings of the city Zoning Board ofAppeals for its approval. All of the44th Ward Community Zoning Boarddecisions were upheld by the councilor the Board of Appeals.

Community zoning boards can beestablished and staffed by city ordi-

nance. Such boards might either bemandated, or more likely, permis-sively established upon request bypetition from the residents of theward. Thus far, the Chicago CityCouncil has refused to pass suchenabling legislation. However, because a Chicago alderman has vir-tual authority over zoning decisionsin his ward, he can delegate thisauthority to a CZB with almost thesame effect as if the body were created by law.

A Traffic Review Commission inthe 44th Ward. also with sevenmembers and patterned after theCZB, meets to decide on such localdecisions as conversions to one waystreets, the placement of stop signs,and the establishment of no parkingrestrictions.

Another extension of the conceptof neighborhood government, and anideal companion to a neighborhooddeliberative body or assembly, wouldbe a local "Little City Hall" to ad-minister and deliver decentralizedcity services. Currently, the closestthat Chicago comes to this are theWard Superintendents who super'vise garbage removal and other streetand sanitation services in each ward.These services, unlike those handledentirely from downtown, are betterand more responsively delivered.

CREATING NEIGHBORHOODGOVERNMENT

While the City of Chicago has refused to pass citywide legislationpermitting Ward Assemblies, Com-munity Zoning Boards, Traffic Re-view Commissions, or Little CityHalls, similar forms of neighborhoodgovernment have been officiallysanctioned and exist in other citiessuch as Kansas City and Washing'ton D.C.

Creation of neighborhood govern-ments in other cities in the futurecan be brought about 1) by referen-dum to alter a city charter where oneexists, 2) by city ordinance, 3) by astate enabling act, or 4) as in the44th Ward case, by an informalagreement or covenant between anindividual legislator and his consti-tuents.

It is important to remember thatsuch structures can be created with'out the passage of laws simply by alegislator agreeing to share powerand to invest some of his decision-making powers in neighborhoodstructures. Although in many citiesneighborhood groups serving gov-ernimental functions are often in-formal and possess only advisorypower, most 44th Ward Assemblymembers feel that the extra work in-volved in electing delegates to abody with real power is well worth it.

24

The Ward Assembly and otherLakeview community organizationswork cooperatively for the good ofthe entire community. Communitygroups can better create effectivepressure on the city to provide nec-essary services, make structuralchanges, or pass legislation. Theycan mobilize popular support for par-ticular issues. On the other hand, theWard Assembly studies pending orpossible city legislation in greaterdetail than other community groupshave the time or interest to do. And,through the Alderman. it providesdirect access to the city government.Thus, the two types of organizationcan complement each other, supplyeach other with useful information.and be mutually supportive on is-sues.

The Ward Assembly in Chicagohas opened up the process of citygovernment to several thousandWard residents who have served asWard Assembi, ' .eeates in is eightyears of existence. It -us givenits members a sense of their ownability to understand governmentand to get things done. They havelearned to draft legislation, take sur-veys, testify at hearings and debatecontroversial ideas. And they havebeen effective at changing at leastsome of the laws of the city that af-fect their neighborhood and othersthe most.

When city government becomestoo remote, it loses its direct link withcitizens. The creation of local institu-tions, formal and informal, can beginto restore that direct relationship be-tween citizens and their elected repre-sentatives. It can teach people newforms of citizenship and it can forcegovernment to be more accountable.In this case, the practical answerisn't just enpedient: it's idealistic.Neighborhood government isn't onlywhat we ought to have-it's what weneed.

ResourcesKotler, Milon. Neighborhood Goeen'

meat The Local Foit.dioss of PulincolLifte. Indianapolis: Bobbs Merrill. 1969.This book is the principle theoretical workon neighborhood government now available. It provides a philosophical basis furao forms of neighborhood governaoce.

Hallmao, Howard. The Orgoniezntisand Ope-itton of Nrighbrbhed Councils.New York: Praeger, 1977.A survey of neighborhood government enperiesee across the country. thin book is arich reource of practical efforts whichhave been undertoken to empower neigh'borhoods. It provides a guide to the acrtuol operations of various types of neigh-borhood governmeot as well an casestudies and an enplanaiuon of how theyhave historically been created.

Simpsoo. Dick. Judy Stevens, and RickKohnes, eds. Neighborhood Gocemmentin Chicogo's 44th Wore Champaign, I11linois, Stipes, 1979.The editors present detailed accounts ofhow informal oeighborhood governmentman mode to work through a covenant be-tween community residents and their al-derman. The book contains essays.speeches. newspaper articles. peacticalmanuals, and constituting docomentsthat present the philosophy, vision, andstephbystep wechanics of neighborhoodgovernment.

Neighborhood Goceesmwet inChtcogo' 44th Word. A 35 minote. ihcolor Videocassette. Office of In-t-eotosal Resources Development, Uni-eenity of Illinois at Chicago Circle: 1978.A video deaumentory record of howneighborhood government in the 44thWard came to be. asd how participatorydemocracy actualy functioned there.This Videocassette is on excelient teach'ing tool or a guide for discstsion and planening by comunoity groups who wart tobetter control their own neighborhoods.Available from: University of Illinois atChicago Circle, Office of Insteoctional Re-coorces Development 8 465 Library. Boo4348, Chicago. Il1nhis 60680

Notn.sol Neighborhood Pltfrrm. Na'

tionaf Association of Neighborhoods,Washiigtoo, D.C.: 1980.This document is the remIt of 47 localconventions aeros the nation. each ofwhich articubated rrsoltmss aimed atstrengthening neighborhoods. The plat-form was connenned upon by a nationalconvention of delegates from the localconventions and grUosroots neighborhokdorganizaions, in Lootsvife, Keotocky inNovermber, 1979. Copies are availableupon request to N.A.N.

Nd n.n. Auscinon offNeighborhoode,1651 FPller Street, Northwest. Weshiog'ton, D.C. 20009.This organization isa national onabti-r tneighborhood organizations struggling toempower and revitoli-r their commuoni-ties. A small, dedicated ataff, directed byMilton Kotler, coordinates the activitirsof member organizations on issoes of cam-moa interest, such an the NeighborhoodPlatform, keeps member organizationsabreast of issMes of sigificarne to theneighborhood movement and providesmanaIgerial and technical enpertise uponrequest. A aew lobbying rm,. theNeighborhood Action Coolitios. has beenformed to present the platform to governreot officials and the potscal partie.Organizations and individuals ore invitedto become members of N.A.N. endlorN.A.C.

Thirty Localities with Neighbonhnod Coomila, by Major Clusers

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25

Two years before the war on pov-erty began and some ten years priorto the Comprehensive Employmentand Training Act passed into law.The Woodlawn Organization, a mass-based community organization onChicago's south side, convinced theUniversity of Chicago and the U.S.Department of Labor that it couldmake the difference in getting blackstrained under the Manpower Train-ing and Development Act to stay intraining and on their jobs. The pro-gram was a moderate success. T.W.O.did indeed have a greater retentionrate than the national average. Thesuccess was an outstanding achieve.ment. But, what was more significantabout the T.W.O., Labor Department,and U of C project is that it was thevery first time the Department ofLabor signed an agreement with acommunity based organization toparticipate in the training process.

While this is not the place to tellthe story of T.W.O., it is important tonote that the organization thenmoved steadily from protest to ser-vice programs (On The Job Training,nursery schoolsi to economic develop-ment (ownership of a supermarket,gas station, movie theatre and hous-log complexesi.

This progression itself is signifi-cant because it reflects an importantbasis for the creation and continuingsuccess of community economic de-velopment.

My premise is that communityeconomic development is a meaning-less bunch of words in the absence ofneighborhood organization. At somepoint a community has to realize thatits own local people, when organized,do have the intelligence and ingenuityto plan, establish and run their ownfactories and stores and that the com-munity, as much as anyone else, has aright to entrepreneurship. To hellwith charity-the only thing a com-munity gets is what it is strongenough to get-and it has no strengthwithout organization. Without organ-ization it gets nothing! Some individ-

uals may benefit on their own, butthat's about it.

When you look at a successful com-munity, what you are seeing is a posi-tive mixture of economic influences-a convergence of the impacts of in-dustry, manufacturing, commericalservices, construction, marketing, re-tailing, transportation, human ser-vices, and employment in a givencommunity. What you also are see-ing, perhaps not so clearly but youknow it's there, is the interdependence of these economic factors. And.if you're a realist, you immediatlyunderstand two things. One, such acommunity doesn t come about by ac-cident. People create industry, ser-vices, marketing, etc. They must beorganized. And two, nothing happenswithout the ability to amass and usecapital. It is a way of saying thatthere are two sources of power, peopleand money: both have to be organizedto create a successful neighborhoodeconomy.

What we at Southtown PlanningAssociation have done is to removecommunity economic developmentfrom the marshmallow chairs ofacademic discussion and put it ontothe hard pavement of the streets. Nopet theories about developing coun-tries, capital leveraging. or racism aregoing to move a neighborhood anycloser to a successful economy-or-ganization will. Undeveloped and n-derdeveoped neighborhoods still haveto rescue themselves from the sociolo-gists and economists who have a wayof describing the problems of commu-nities according to their theoreticalsolutions.

BEGINNING TO ORGANIZETo embark on a program leading to

community economic development.the first step is to get the people orga-nized into some kind of broadly basedgroup representing as completely aspossible all the interests in the neigh-borhood. Let me soy right out front-I don't think it makes much differ-ence whether the group is a coaliton,

an alliance or a federation. It is, how-ever, important for it to be repre-sentotive of the neighborhood.

IEve discovered that, as a generalrule, you can only organize at thelevel of the people's experience. Ifyour approach or structure gets toocomplex or involved, they won't par-ticipate bemuse it's too hard to un-derstoad. If it's too simple, peoplewon't participate because they'll sy,"We've done that already." Theanswer lies somewhere in between.This is a good testament to the factthat organizing is a profession and anart, not some amateur sport done inyour spare time.

The good organizer, knowing wherehis community is and where it has togo to be successful, will put togethera structure that can ultimately coor-dinate planning, human servicedelivery, capital development andemployment training. He alreadyknows that organizing for power is anoverriding objective, for how else willa community succeed except that itmaintain considerable political con-trol over its own economic destiny?

The 1979 National NeighborhoodPlatform of the National Associationof Neighborhoods is quite clear onthis point:

*People organized in neighbor.hoods are best able t pronounceend amplify in Sim tones the voiceof citizens so a to command the re-sponse of goverament and privateinstitutions.'

It is critical that the spin-off effectof the organizing effort is an institu-tion, or several. which has the capa-bility of coordinating the economicactivity of the neighborhood.

THREE STAGES OF ORGANIZATIONThe very first stage of the organiz-

ing effort should establish a set ofissues around which the group selectsits leadership and sets policy. Thegroup's priorities, however, shouldnot be confused with the issues them-selves.

NEIGHBORHOOD ECONOMICDEVELOPMENT

by Squire Lance

26

In this first stage the priorities are:-one, to organize around all issues ofconcern to the residents of the neigh-borhood;-two, to win on most of the issueswhere there is a conflict or differencebetween the neighborhood and out-side interests or interests perceivedto be from the outside: and-three, to pay attention to survivalneeds such as finances and manage-ment.

Some economic development issuesat the first stage might be breakingdown discriminatory barriers to equalemployment, agitating for more jobsin government and in the private sec-tor, equal treatment by lending insti-tutions, improvement of housing, andbetter garbage collection. It is im-portant in this early stage to setpobcy and choose leadership aroundall issues with which the neighbor-hood is concerned. Winning and survival, in this first organizationalstage, are not nearly so important.Concern with all neighborhood issuesgives the group its identity as a mass-based organization and sets its style.

As the issues become clearer andthe leadership becomes sharper, theorganization will move into a secondstage of development where there is ashift in priorities.

At this stage winning becomes theorganization's number one priority.Organizing is now second and surviv-al third This shift is understandablein light of the fact that the or-ganization's credibility in the neigh-borhood is at stake They haveelected their leaders and they haveset their policies "Can the organiza-tion win?" is a legitimate and crucialquestion.

It is at this point that the organiza-tion must sift through the issues andselect those on which it can win. Thisrequires a good assessment of the or-gaoization's power, its will, and it.ability to last in a fight. An organiza-tion with experienced leadership willnot make the mistake of selecting anissue based on the intensity of theneighborhood's mood but will ask thevery practical question, "Can wewin?"

Issues at this stage need not becontroversial or confrontational. Infact, confrontation and conflict mostoften occur in the first stage when theorganization is drawing maximum at-tention to itself, saying to neighbor-hood residents, "We're concernedabout you," and to its adversaries,"We'll battle for what we want."

This second stage provides the op-portunity to begin building poicyand direction toward economic devel-opment through work on relatedissues A housing issue now leadsfrom "getting the City to tear itdown" to "building our own" on the

vacant land; a fight over jobsbecomes a CETA contract to cleanthe vacant lots; high health cost leadsto establishing a Health MaintenanceOrganization.

But it is in the third stage of or-ganizational development that theneighborhood organization becomesthe neighborhood institution. nowwith the power to establish an infra-structure capable of producing aviable neighborhood economy.

If a neighborhood group has madeit to this stage, its priorities havetaken on the characteristics of mostinstitutions in the society. Sarcicol isfirst and foremost, which means thatmoney and management are its chiefconcerns. In the second place it iscancerned about its track record-winning-getting things done-doingfavors for its constituency. Finally, itis still concerned to organize But,bringing in new blood and new mem-bership can at times be more of athreat than a priority

It is precisely the institution's con-cern for the bottom line (money andmanagement) that provides its great-est potential to establish and carrythrough on a community economicdevelopment program.

ORGANIZING FOR ECONOMICDEVELOPMENTWhat is needed are three keyelements: One, an overall strategy, in-cluding a set of specific goals whichgenerally emerge from the secondstage, two, a working relationshipwith private and public sector instito-tions. and three, technical assistanceresources (i.e.. lawyers. accountants,researchers, etc.).

There is a coordinated set of organi-zations on the southside of Chicagowhich, though different in style, havearrived together at the implemento-tion stage of an overall neighborhoodeconomic development strategy.

The Southtown Planning Associa-tion, during the sixties. established atrack record on housing, zoning andtransportation issues.

As part of its housing program, itestablished the Southtown Land andBuilding Corporation, a for profit or-ganization which built 100 singlefamily homes in Englewood. In addi-tion, it formed two not-for-profitgroups which sponsored the construc-tion of two high-rise apartment build-ings in the neighborhood

In the commercial area, SouthtownPlanning Association negotiated thecreation of a five-member commissionwith taxing authority which managesthe 63rd & Halsted Englewood Shop-ping Concourse.

STRUCTURE AND ORGANIZATIONSouthtown Planning Association is

diverse in membership, with a tradi-

tional management structure and astrong business support base.

The organization's Board of Di-rectors includes membership fromneighborhood churches, residentorganizations. businesses, and localgovernment agencies.

Its management structure has anExecutive Director as the ChiefOperating Officer, a Planning Co-ordinator as Chief Strategist, and aDevelopment Analyst as an Assem-bler of Financial Resources. In addi-tion, the agency employs a ProjectAdministrator to oversee the inter-nal, fiscal, and administrative affairsof the present organization and itsspin-offs.

The diversity of Southtown Plan-sing Association's membership in akey element in its ability to functionwell on economic issues in the neigh-borhood. This diversity existed longbefore the organization's economicdevelopment thrust crystalioed in themid-sixties

Residents, business people, andgovernment representatives are ableto use the organization as a forum forthe discussion of new ideas, plans,and strategies for future economicdirection.

COMMERICAL REVITALIZATIONIt was out of this setting that

Southtown Planning Association cre-ated the Englewood Concourse Com-mission which is at the canter of itseconomic development thrust, TheEnglewood Shopping Mall is. withoutdoubt, one of the most significanteconomic development achievementsby a neighborhood group in a hun-dred years.

Since 1960, the Englewood buoi-ness district had been on the decline.Most businesses at 63rd and Halstedwere following their customers to thesuburbs, leaving behind the least suc-cessful enterprises and a communitybecoming increasingly black andpoor.

A decision was made: Attemptwhat no other neighborhood had eversucceeded in doing. Save the businessdistrict! Southtown Planning Associ-ation took the lead. It recommendedto the City that it declare 63rd andHalsted an Urban Renewal area, thusqualifying it for a large infusion offederal funds, approximately 517million. With this infusion of dollars,the City was able to redesign the areato be more in conformity with theneeds of the time. Improvements in-clude off street prking, landscaping,benches, limited through traffic, andcanopies over the sidewalks.

The infusion of these funds was atremendous incentive to local busi-nosses which, in turn, pumped $54million back into the neighborhood in

27

capital improvements. Such were thephysical improvements and fiscal in-vestments

Meanwhile, the real excitement wasgoing on in the meetings on how tomanage and maintain these improve-ments. This was a natural concern forthe men and women who not onlykept their businesses in Englewood,but also made substantial reinvest-ment in their own future and that ofthe neighborhood.

Under the leadership of SouthtownPlanning Association, a series of ulti-mately crucial decisions were made:

1. The tab for the creation of theEnglewood Shopping Mall at 63rdand Halsted (not paid for byUrban Renewal funds) would bepaid for by the property owners inthe mall over a 20 year periodthrough an annual assessment;

2. The management of the mallwould be placed under the author-ity of the Englewood CommercialCenter District Commission madeup of five bhsinessmes appointedby the Circuit Court on the recom-mendation of the Englewood Busi-nessmen's Association and theSouthtown Planning Association:and

3. The Commission in turn wouldhave the power to levy taxes in themall to cover the cost of extra-ordinary maintenance, lighting,security, and administration.

Several actions followed these deci-sions:

1. Legislation was passed at theState level, granting the City ofChicago the power to create thenecessary ordinances under HomeRule laws, and by the Chicago CityCouncil to accept that power; and

2. The enactmeit of the ordinancesby the City Council creating theEnglewood Commercial CenterDistrict.

The impact of the mall's creation isfar ranging. In spite of some ups anddowns which are always the case withman-made institutions, the mall hasbeen successful in maintaining astrong commercial base. Ground hasbeen broken for 13 new stores and anArthur Treachers on the northeastcorner of 63rd and Halsted at a costof $1.2 million, creating 100 new jobs.Aldi's food chain has just opened anew store in the area, at a cost of0500,000, creating 15 new jobs; andWalgreen's drug store has spentS500,000 on improvements.

Of equal impact is the shift of au-thority to the neighborhood and itsrepresentatives, giving them thepower not only to make key businessdecisions, but also to levy taxes.While it is not our purpose here to ox-plore the broader significance of thepowers granted to the EnglewoodCommission, I think one can readilysee the relationship these powers

have to the reestablishment of neigh-borhood government.

THE FUTURESouthtown Planning Association is

now moving to establish a more com-prehensive economic developmentstrategy based on neighborhood re-vitalzation.

Its primary goals are new construc-tion, rehabilitation, commercial re-vitaliation, and the establishment ofa light manufacturing district.

As spin offs, the Association plansto form the Englewood DevelopmentCouncil which would raise funds for,and coordinate the activities of, some12 other neighborhood corporations.

While the evolution to this stage ofimplementation has been a long andtedious one, it has bees successfulbecause of the tireless attentionneighborhood residents have given totheir organications.

ResourcesAhesky, Soul D., Recrilia Fo. Radila,

Vintage Books, 1969.Originaliy published is 1946, and updatedto take into account the changed cireem-stances of the Civil Rights Movemeat,

I this bsok summariaes Alinskys confru-tationol organizing philosophy andmethod. Aliskys opproach damniatedcommunity organicati.n thinking fromre tn to decades, eve when it was

being rejected.Fish, John H., Black Poe'White, Cos-

28

tni, Princeton U .niversity PNe. 1973 dangers of starting smalf mi.noty busi- vitalization with that which only prnvidesThin account of The Woodlbwn Orgunia- nses with inadeqoate capital. It is m ameliorative services aod income mwtetion's first deeadr tracro its development sharp contrast to the direction wkhen by nnncefrom pratest to pohtical struggle to the Southtown PIanoing Assuciation Southtown Phninmg Anoncintian, 811economic investment and management. Htetsonmhcdgrs~ hewmboldyog Cet3dire om1 h oIThe-ini -onetion ofd neighorhna sel .G. Alfrd. Jr., "Community Orga- West 63rd Stret, Roam 213. Chicago. MITh. of tighb.,h -If- otUati in Chicago, The Wieholdt Fuon- lio~is 60621. 3121873-7474.determna tio- n and sef-rehance are placed dation. Chicuga. 1979 (lmimeogrephedl This neighborhood development oegma.-listhc Thin paper contais a srvey of the pob tios is led by its esecative director. Squi e

-tic. bshed studies of major community orga- Lance. It represeots a unique npprnach toTowoed Re-pso-ihr Freedom. Co- niation is Chicago Irom 1945 to 1973 It economic development and commercinl

innity Renewal Society Chicag. no dale contrasts the resistive efforto of orgusi revbitaliaston comhining traditional om-mimeogesphedl. cations on the edge of the ghetto with the munity -rgaioaing techniques with quasi-

Thin evluaion of a joint project between more constructive development efforts of goveremental foctions. Ito novel p-the Commuity Renewal Society and the those within the ghetto. It compares the pro-ch in esemplary of the eperimento-renwood Oaklnd Community Orgeniz- effectiveness of money osid fo recon- tiuo necessary to Naighbirhood Recitli-tion contaMis et.nsive iights ito the st-ction which geneentes economic re- -aiiu.

29

Unemployment is a plague of mod-ern urban life, sapping self-respect,disturbing family life, and creatingpoverty and despair. It is a diseasewhich strikes hardest at certaingroups in the society. in particularminorities, youth, and women-groups which are both discriminatedagainst by employers and which tendto be less trained by society in theskills necessary for secure, full-timeemployment.

Unemployment attacks not only in-dividuals, but neighborhoods as well.Minority neighborhoods have highunemployment rates, and the cumula-tive effect of large numbers ofunemployed, and therefore impover-ished, workers is crime, poor educa-tion, deteriorating housing, lack ofpoetical clout, and local businessfailures.

In order for a community to behealthy, functioning, and able to sup-port its own institutions, its membersmust have jobs. But workers facedwith job discrimination, lack of skills,and lack of available jobs have littlerecourse as individuals.

Just as unemployment affectsneighborhoods, so some solutions tothe problem can be found at theneighborhood level. The very effect offighting the disease can help rebuildneighborhood institutions. By turn-ing individual problems into a collec-tive problem, a community can focusita combined resources on mitigatingthe unemployment dilemma.

This paper describes an attempt toattack unemployment at the neigh-borhood level, using collectivestrength to demand financial re-sources from the state and jobs fromprivate employers, and using local re-sources of talent, knowledge, and con-cern to help local residenta helpthemselves.

The Spanish Colition for Jobs in anorganization created expressly forthe purpose of using collectivestrength and knowledge of "the sys-tem" to 1) force employers to hire

minorities, in this case Latinos; 2) de-mand a fair share of government anti-poverty funding for Latino communi-tie; 31 train workers for the kind ofjobs which are available in their com-munities; and 4) help provide staffingfor community service organizations.The Coalition, in other words, at-tempts to bridge the gap which separ-ates vast numbers of unskilled orsemi-skilled, unemployed or under-employed workers of the inner cityfrom the decent jobs which are theunderpinning of a secure and ade-quate community life.

HISTORYThe Hispanic community in Chi-

cago in 1980 is just beginning to feelits politics! strength, but there havelong been numerous neighborhood or-ganizations and social service agen-cies within the largely Latino neigh-borhoods of Pisen, South Chicago,Little Village, Westtown, and Lake-view,

In 1972, a number of these organi-zations, feeling the need for a unifiedfront in the ares of employment,formed the Spanish Coalition forJobs. The original purposes of SCJwere twofold-to procure govern-ment funding for job training andplacement efforts of community serv-ice organizations, and to act as s cen-tral spokesman for community ef-forts to force affirmative action hiring of Latinos.

The Coalition still serves thesefunctions. In addition, through gov-ernment contracts under the Compre-hensive Employment and TrainingAct, (CETA) the Coalition runs itsown training programs and placesabout 30 CETA employees with com-munity organizations where they dothe work of those organizations inproviding community services. Un-like most CETA programs which aimmerely at providing work for the indi-vidual long-term unemployed, SCJ'sCETA programs are aimed at pro-viding much-needed services for theneighborhoods. SCJ's own job place-

meet center is also staffed by CETAworkers.

About 15 agencies were repre-sented in the formation of the Coal-tion. The charter members were AdaMcKinley, Association House, CasaCentral. Cuidar. Gads Hill Center.Se-Jobs for Progress and Una PuertaAbierta. With one exception (UnaPuerta Abierta is a job service) thesewere multiple-service. largely Latino,organizations with employment asonly one facet of their programs.

Each of these organizations hadtheir own sources of public and pri-vate funding. Public funding was be-ing channeled through the ChicagoFederation of Settlement Houses, towhich many of these organizationsbelonged. At the time, the govern-ment was increasing its funding toemployment services in the inner-city, but in Chicago, little of this wasgoing to Latino organizations.

With the formation of the Coali-tion, many of these agencies brokeaway from the Federation and nego-tiated contracts directly with ModelCities. In this. the Coalition acted asa broker.

In 1975, with the implementationof the Comprehensive Employmentand Training Act, SCJ began to focuson CETA money, writing and submit-ting proposals for all its members.Today, virtually all SCJ moneycomes from CETA.

At the time the Coalition wasformed, a number of Latino organiza-tions had become involved in affirma-tive action efforts. In 1970, elevenneighborhood agencies began affirm-ative action negotiations with severalemployers, among them Illinois BellTelephone Company. According tothe Coalition. this was the first timethis sort of direct action had beenbrought to the doorstep of a publicutility, and it was something new forall concerned. The agencies foundthey needed a legal representative tosign the affirmative action agree-ment, and the Coalition stepped in tofill this role.

83-512 0 - 81 - 5

NEIGHBORHOOD JOB TRAININGby Joanna Brown

30

PURPOSESAs expressed in its by-laws, the

purpose of the corporation is to "fur-tUer the participation of the Spanish-speaking residents of Illinois in thelife and activities of that community;and to seek the development of thesocial, educational, cultural, and eco-nomic interests of the Spanish-speaking community."

The Coalition's primary goal is "toplace unemployed, underemployed,and economically disadvantaged per-sons in meaningful employment thatwill raise their income and provide op-portunities for upward mobility. Ofprincipal, but not exclusive, concernare the Latino residents of the above-mentioned communities."

SCJ has deep roots in the Latisocommunity, particularly in Pilsenwhere its offices are located. This re-lationship benefits both the com-munity and the individuals whomSCW serves. On the one hand, SCJprovides economic benefits to thecommunity. Says Mary Koenig, part-time executive director of SCJ and ofGads Hill Center. a Pilsen multi-ser-vice agency, "SCJ employs neighbor-hood people, who tend to shop athome. This feeds minority business.It makes a difference in alcoholism,child abuse, and family breakdown."

On the other hand, says Koenig,SCW's closeness to the communitymeans that its training staff canrelate to the experience of their stu-dents, and help them with their per-sonal, as well as their academic, prob-lems.

SCJ tries to affect both the indi-vidual and the community. usingCETA funds to train community resi-dents in skills while providing neededworkers in community organizations.

The Coalition's four main activitiesare affirmative action, job training,procurement of government funds,and provision of community services.

AFRRMATIVE ACTIONThe Coalition has undertaken af-

firnative action efforts together withother community groups, participat-ing in negotiations with Illinois BellTelephone: A & P grocery stores; Chi-cago Transit Authority; RegionalBureau of the Census; Chicago radioand television stations; Blue Cross!Blue Shield; two Pilsen Savings andLoans Associations, and the Mayor'sOffice of Manpower and Training.

In some cases SCJ initiated the ac-tions; in others, SCJ joined in to givesupport to other groups.

For example, according to SCJ Pro-gram Director Tom Langdon, thecampaign against the Savings andLoans was spearheaded by PilsenNeighbors. The 18th Street Develop-ment Corporation and SCJ joined in,

using CETA workers to help organizearound the issue.

These S & Ls were sustained bycommunity savings. says Langdon.Yet the community organizationsfound an unacceptable proportion ofloans given out by these associa-tions were going to the suburbs. TheS & Ls were pushed to reinvest in thecommunity, to seek out people in theneighborhood who wanted to remodelor buy houses and lend to them.

Another issue centered around thehiring policies of Chicago radio andtelevision stations. In this case SCJwas the initiator but was joined byover 20 other Latino and media re-form organizations.

A man whom Landon describes as"a talented, qualified Latino journal-ist," applied for a job at WBBM-TV."WBBM played around," says Lang-don. "First they said they would hirehim. Then they offered him a differ-rot job from the one they had firsttalked about. He felt that WBBMwas playing with him. He walked intoSCJ one day. We took up his case,and began an investigation into hie-ing statistics of Chicago-area radioand television."

SCJ found that a number of localstations had virtually no Latin. em-ployees. This is contrary to FederalCommunications Commissionaffirmative action rules. Togetherwith other groups, SCJ filed a peti-tion with the FCC asking them todeny the renewal of the licenses ofthese stations. The case is still pend-ing before the FCC.

Another affirmative action projectis a lawsuit which SCJ recently filedagainst the Regional Bureau of theCensus, charging the Bureau withdiscriminatory hiring. "We are goingon the hypothesis that the census willnot count Latino workers," saysLangdon, "and we are trying to forcea proper counting." SCJ has collectednumerous affidavits from Pilsen resi-dents who say they were denied jobsby the Census Bureau and were notalowed to take the employment testin Spanish.

In addition to the lawsuit, SCJ istaking its own private census, both inWesttown and Pilsen, which it willcompare with the results of the government's census in those areas. Allthese activities, says Langdon. de-pend on a good network of communi-cation between SCJ and communityresidents, built up through years ofexperience in the neighborhoods.

PROGRAMSExcept for a minute amount of pri-

vate contributions, all Coalitionmoney comes from CETA in one formor another. SCJ has contracts underCETA Title IV and CETA Title VI,

funded through the City of ChicagoDepartment of Personnel, and twotraining programs, one fundedthrough the city's Department ofHuman Services, and one fundeddirectly from Washington.

In addition, the Coalition runs anemployment service in conjunctionwith Gads Hill, a local social serviceagency. The employment service isstaffed by CETA workers under con-tracts obtained by SCJ.

In previous years, the Coalitionparticipated in two additional pro-grams funded by the city. The Coali-tion placed 838 persons in pnvateemployment under a three-year con-tract with Placement and Retention(PAR) and placed 1,809 persons inprivate employment under the Com-munity Action Referral and Employ-ment (CARE) program. Both thesecontracts were obtained by the Coali'tion and farmed out to its memberagencies. PAR has been dropped be-cause under it community groupsended up doing a lot of work withoutgetting paid for it; CARE has beenpicked up by individual memberagencies.

The Coalition began its fifth clerk'typist training program in March,1980. Each has trained about 20 per-sons, and 97 percent of the last threeclasses were graduated and placed inprivate jobs using their new skills.

CETA VI: The Coalition has a con-tract with the Department of Person-nel providing funding for 40 CETAVI slots. SCJ obtains the contract,which runs for 18 months, and thenhires people to fill the slots. CETAworkers can stay on the job for amaximum of 18 months, duringwhich they are expected to learnskills and work habits, in order tobecome employable in private indus-try. The success of a CETA programis judged on the percentage of CETAworkers who become employed afterthey leave their subsidized jobs.

To qualify for a CETA position, aworker must be ineligible for unem-ployment benefits, and have a below-poverty family income. The Coalitionwrites job descriptions and submitsthem to the city, which sends pro-spective workers to be interviewed.The Coalition can reject applicants.but they have no control over whocomes in to be interviewed. "The citydoes not send enough applicants,"says Langdon.

Six CETA VI workers make up thebulk of SCJ's central staff, workingas secretaries, receptionists. affirma'tive action officers, and job place-ment counselors. The other workersare farmed out to community organi-zations, both members and non-mem-bers of The Coabtion. They provideday-care, drive buses for senior citi'zens, run after-school programs, and

31

do secretarial work."For a CETA program to be our-

cessful," asserts Langdon, "it's im-portant to make sure people are wark-ing, doing real work." Some CETAworkers develop an interest in corn-munity issues from working in SCJ,especially toward the end of theirterms, he says.

The Coalition also fills 30 slots forCETA IV workers, young people inhigh school or junior college whowork a maximum of 12 hours a week.(25 hours in the summer). They fillthe same kinds of jobs as CETA VIworkers.

In 1979, 21 of SCJ's Title VIworkers were funded under a contractcalled Hispanic Community Assist-ance. This program:

served 250 persons through fourparalegal workers;

served 40 families through daycare and citizenship classes;

served 125 unemployed personsthrough two job counselors.

Of these Title VI workers. 14 (67 per'cent) entered unsubsidized employ-ment after their CETA jobs endedand four others entered university.

The Coalition's other Title VI contract, called Health Education andFamily Fitness, put on two commun-ity health fairs. 82.4 percent of theseworkers ultimately entered unsubsi-dized employment, the goverument'scriterion of success for CETA pro-grams. Depending on the particularcontract, 75 to 88 percent of SCJCETA workers have had what thegovernment calls a "positive termi-nation."

One successful example is the Pil-sen Legal Assistance FoundationtLAF) office. a government-funded,poverty law office where SCJ placesCETA workers as paralegals. Aftertheir 18 month contract expired, SCJbrought pressure to bear on LAF tohire the paralegals. whose servicesLAF had been using for free. In 1979.LAF hired four CETA workers."That's how CETA is supposed towork," says Langdon. Unfortunately,many of the organizations which takeSCJ's CETA workers cannot affordto hire more staff, and are in factdependent on CETA for providingmuch of their staff.

Coalition CETA workers are cur-rently conducting a block-to-blocksurvey of Pilsen-what kind of busi-nesses are located there, how longthey've been there, who the ownersand managers are. Says Langdon,"We would like to take the results ofthe survey and work with the localChamber of Commerce to help fosterbusiness development. We will alsofeed the information to other groups.such as the 18th Street DevelopmentCorporation."

CETA workers are monitoring andimplemeating an affirmative actionagreement which SCJ signed with A

& P Stores. They are also doing com-parative retail pricing. "As a spin-offfrom this we will hold block meetingsto make people aware of prices." says

Langdon. "We can use this to talk tothem about cooperatives.'

SCJ's current CETA VI contractruns through September, 1981. Fund-ing for the 18 months is S640.382, ofwhich 93 percent goes directly toCETA workers in salaries and fringebenefits. Less than five percent goesto SCJ for administration. (By thetime neighborhood organizations getthe money, however, perhaps an addi-tional 50 percent has already been ap'propriated for federal and city grantadministration.)

Although 5600,000 sounds like alot of money, the Coalition's programis smaUl compared with organizationssuch as the YMCA or Catholic Chari-ties which might have 250-300 s:Ots.Langdon observed.

Running a good training programdoesn't necessarily require years ofexperience, but it does require admin-istrative know-how. A new programshould be hooked in with an existingagency.

Often CETA programs fail for ad-ministrative reasons. Landon says.Youth are hired to sweep streeto. butno brooms are provided. Langdonsuggests that SCJ's success is due, inlarge part, to its executive director,Mary Koenig, who "runs the shipvery tightly," knows who to call inthe city hall. and has years of experi-ence working administratively incommunity organizations.

TRAINING PROGRAMSSCJ runs two training programs,

one a three-month bookkepping pro'gram, and one a clerk-typist program.Both are funded with Illinois stateCETA funds.

The clerk-typist program, runningMarch through September, 1980. wasthe Coalition's fifth. Employing twoteachers and one program director,the course trains 20 students, all ofwhom are paid weekly stipends. Theprogram is strict. Classes meet 9-5.five days a week. Trainees sign a con-tract; after three unexplained ab-sences they are dropped from the pro-gram. There is one typing teacher,and one teacher of academics, whichincludes reading, math, English.GED preparation, grooming. make-up and interviewing. The studentsvisit corporations to become familiarwith work situations.

SCJ helps trainees find jobs, andcounsels students. "Everyone in thelast graduating class," says MaryKoenig proudly, "passed the civilservice test." Koenig continues,

"Without the program these peoplewould have been on welfare or inmenial factory jobs where they werelast-hired, first-fired.' Of the last 61graduates,. 59 went on to regularemployment at more than theminimum wage. One went on to col-lege.

SCJ recruits the trainees throughits member agencies, through localnewspapers, and by word of mouth.Often trainees come into SCJ lookingfor employment, and are steered intotruining programs by the counselors."We look first at the students' desire,and then at whether they are eligiblefor CETA," says Koenig.

"The only programs with resultoare the grassroots programs," shesays. "They work on more than aca-demic needs. The most importantthing is to have bright. sensitiveteachers, who can relate to the experi-ence of their students and take a per-sonal interest in their problems."

Most of the trainees have been highschool dropouts, many were on publicaid, and most were female, singleheads of household. Many have atti-tudes that are difficult to work with,Koenig says. "Sometimes you wantto pull your hair out. but the teachersmust be able to love these kids."

There is a vast difference betweencommunity-based training programsand programs such as the city col-leges provide, which she describes as"impersonal, bureaucratic." "If wesend (trainees) on a job and it doesn'twork out for some reason, they canlevel with us. We follow up. We arestill seeing kids who graduated fromour first training program.' Sheadds, "A good program is geared tospecific jobs."

The total training cost for the 1979clerk-typist training program, includ-ing instructors, texts. manuals, oper-ating overhead, and fiscal and admin-istrative management, was only81,280 per trainee.

PROBLEMSCETA has been a boon for com-

munity organizations, most of whomare perennially starving for moneyand staff. Yet public funding has itsproblems, and the Coalition has feltmany of them.

The federal CETA money is chan-neled through a "prime sponsor," inChicago that is the Mayor's Office ofManpower and Training, which sub-contracts it out to various agencies.In SCJ's case, the money comesthrough the city's Department of

,PersonneLThe money is not a grant, but a con-

tract. This means that projects aregiven a small mount of start-upmoney, and then are reimbursed forexpenses after they pay the bills and

32

submit vouchers to the sponsor.In June, 1980, the city was four to

five months behind on repayment,and had been so for some time, ac-cording to Langdon, who says thereare flagrant breakdowns in the city'sadministration of CETA money."There is unbelievable chaos," hesays. "They're getting interest onthis money. It borders on the crimi-nal. "

As an example, Langdon cites theCoalition's clerk-typist training pro-gram of March l-September 30, 1980.SCJ began interviewing applicantson March 1, when the contract wentinto effect, and on April 7 begantraining. It was five weeks later, May16, before the first check came fromthe city, amounting to 0159 for ad-ministrative costs and $3000 forstart-up funds, barely enough tocover two weeks' stipends for thetrainees. It was early June before thestipends were brought up to date. Inthe meantime, SCJ scraped togetherwhat money it could to keep its stu-dents, many of them single motherswithout savings, housed and fed. TheCoalition wrote letters to landlordsand utility companies, explainingwhy its trainees' bills were not beingpaid. "When we complained to thecity," says Langdon, "their answerwas that we shouldn't have starteduntil we got the money."

"When you use public fundingyou're asking for bad trouble," headds. "We are trying to get privategrants and use them to borrow fromwhile we wait for our vouchers to getpaid." Some community arganiza-tions have also talked about settingup their own prime sponsors.

SCJ is also looking for privategrants, but this has proved difficult.Both Koenig and Langdon blametheir earlier fund-raising failures onlack of a clear organizational struc-ture. "We had a board of the fourstaff members," says Koenigi "Theprivate organizations saw us as anorganization with a weak structure."Last year the Coalition restructuredits Board of Director.. There are now22 members, with expertise in law,education, local government, unions.and business.

The fact that SCJ, using publicfunding, trains people so cheaply,with teachers doubling as adminis-trators, also makes its organizationlook suspiciously loose to peoplecoming from the corporate world,

"We have got to get out from underpublic funding," says Langdon. "Thewriting's on the wall. Pubbc fundingis going to be shaky." In addition,SCJ wants to do things that can't bedone with public money-like buyingmore typewriters, and paying admin-istraters,

"It's a Catch-22," says Langdon.

"Foundations tell us they don't givegrants to agencies working entirelyoff public funds," In addition, theytend to see job training as a govern-ment area, preferring to fund re-search.

To raise money, SCJ has begunsending out letters, asking privatefunding sources to "adopt a trainee."The Coalition also has begun to planself-sustaining projects, such as abuilding maintenance corporation.which could employ local workerswhile helping to fund the Coalition.

Private funding would allow theCoalition to set its own eligibilityguidelines. Koenig says Title VIguidelines are getting tighter all thetime. "It looks," she says, "like theavailable CETA money will be gearedto welfare," The Coalition may soonbe in the position of having to sug-gest to clients that they get on wel.fare in order to become eligible for theprograms. "Yet," says Koenig. "wewant to instill pride."

"The employment picture isscary," she adds. "The recession willhit us terribly. Many of our walk-insspeak only Spanish, have no cars,have low education, and are the vic-tims of lay-offs or runaway plants."

Unemployment is always a personaltragedy, damaging both the economicstability of a family and the self-respect of the worker. But it is also asocietal calamity, undercutting acommunity's sustenance and spread-ing apathy and despair. Neighbor-hood job training institutions, suchas the Spanish Coalition for Jobs, arean effective way to bring to bear thecorporate resources of a communityon one of its most pressing problems.They are one crucial element inNeighborhood Revitalization,

ResourcesBernstein, Scott and James Pitta, Mal-

ing CETTA Work: for Workers and forNeighbarhoods, Community Renewal Soiciety, Chicago. 1980. $4.00.This hook is a gaide to s.ig the titles andnew regulations of the ComprehensiveEmployment sad Training Act iCETAI incontinuing programs of neighborhooddevelopment.

Flanagan. Joan. Thke G-i'Roots F.and-Ruiaisg Beak, Swnlow Press. Chicago,1977.This little book has become the basic textfor local eeganiatinns setting up a solic-ited support bas.

White, Virginia P. G-tsi, Hote TaFied Ont About Them nod Whai To DoNext, Plenum Press., New York, 1975.Another practical guide to secuing fund-ing through contributions from chariteblefoundations, corprastione, and public

Reference LibrariesDonor's Feram, 208 S. LaSa.1e, Suite

600. Chiago, IL 60604, 726-4877.This eno-profit association of grant-mak

iag foundations and corporations roe-amin the regional library of the New York

bhoed Foundation Center. It hen inWarms-tien bahot state diectanes., fundingguides, and funding institutions.

Department of Labor. Emplayment sndTraining Adriistrtien Resource Cen-ter. 230 S. Dearborne, Chicago, IL 60604,353-5061.The Resource Center has over 1 100 pnbl-ctanios, deaihg with employment andtrauning, vailable to the public.

Mulnipal Refereoce Library, City Hall,Room 1004. 121 N. LaSalle, Chicago, IL60602, 744-4992.In addition to books sed pamphlets asemployment and traming, this library hoeas extensive newspaper clipping file withlistings for Affirmatice Action. Hiring,and Job Training.

Mayor's Office of Employment andTraining, 180 N. LaSae., Chicag,. IL60602. 744-5896.While the resources of this office are not alibrary, per se, it way be the bhot refereece for frading specific aous of CETAprogramis and the specifications on thecasous titles of the act.

Spanish Cealition for Jobs, Inc., 1737W. 18th Street. Chicago, IL 60608.This organization, highlighted in thisessay as an exemplary seighborhoodorganizatios, is one of the most effectivegroups assisting Latino nighborhoods tosecure an adequate economic foundationfor vibrant comwooity life.

33

This paper concerns a form of com-munity financial organization basedon neighborhood credit unions. Itdescribes the structure and operationof credit unions and examines theirpotential as organizations devoted tolocal development and popular demo-cratic control. It includes an outlineof procedures for organizing a neigh-borhood credit union. A resourceguide and bibliography is appendedfor those who would like more de-tailed information or practical sug-gestions.

As cooperatives, credit unions areexperiments in local financial democ-racy. In contrast with privatelyowned, profit-making banks andother commercial credit institutions,credit unions are owned by theirmembers for the purposes of "pro-moting thrift." making loans that are"provident and productive" and "as-sisting (the) community." In Europe,credit unions were used by membersto offer substantial economic supportto producer and consumer coopera-tives. For eaample, in Sweden the co-operative movement as a whole is85% internally financed by sales tomembers and credit union capitaliza-tion. Only 15% of its financing comesfrom government sources, private sec-tor grants, or sales to non-members.In America, credit unions were not anintegral part of a wider cooperativemovement. For much of the presentcentury. their main purpose has beento promote the personal security orsuccess of individual members andtheir families. In the past decade.changes in governmental regulationof credit unions, the emergence ofnew sources of capital and funding,and the resurgence of cooperative ac-tivity at the local level have enhancedtheir potential to function as the fi-nancial arm of an organied commun-ity or neighborhood.

WHAT IS A CREDIT UNION?The Federal Credit Union Act

defines a credit union as "a coopera-tive association organized in accor-

dance with the provisions of (the Act)for the purpose of promoting thriftamong its members and creating asource of credit for provident or pro-ductive purposes." Credit unions aredepository financial institutions de-signed to provide inexpensive sav-ings and loan services to sharehold-ers. Unlike banks, they cannot dobusiness with the general public. In-stead, their charters restrict them toserving groups with a common bondsuch as occupation, association, orresidence.

The bulk of credit union assets arein the form of loans to members.Most of these are consumer loans forautomobile purchase, home repair.education, and debt consolidation.Federal credit unions also make loansfor real estate and business purposes.Interest rates on loans are limited bycredit union law. The ceiling on loanshas been 12%, or 1% per month. Re-cently, that ceiling has been raised to15%. But credit unions may pay aninterest refund to members. In 1975the refunds from the federal creditunions ranged from 5% to 20%, withan average of 10%. Like all savingsinstitutions, credit unions also pay in-terest on deposits. In Chicago, theNorthside Federal Credit Union, aneighborhood credit union located inthe Uptown Center Hull House, of-fers 5% interest on savings.

Credit unions may also providegroup services to their members.These include group insurance forloan protection, auto and homeown-ers insurance, group purchasingplans, and group legal services. Theyare eligible to participate in govern-ment loan guarantee programs forstudents and small businesses. Addi-tional services include check cashing,money order purchases, counselingsereices, crime insurance, and share-draft programs (similar to checkingaccounts).

CREDIT UNIONS AS SERVICEORGANIZATIONS

Credit unions were developed

around the turn of the century for thepurpose of extending banking andfinancial services to working classcommunities where they had not yetpenetrated, and to bring the workingman and his family into the main-stream of American economic life.The intent of these early societies wasto promote regular savings habitsamong workers and to advance capi-tal for small business ventures. Lead-ers of the early credit union move-ment hoped that this would move theworking class toward greater eco-nomic self-sufficiency and therebyeliminate the threat of its politicalmobilization for major social change.After 1920, the mass production ofconsumer goods stimulated the needfor mechanisms of credit to increasethe purchasing power of workers.Credit unions in this period began toidentify themselves as organizationsdesigned to serve the credit needs ofthe growing class of consumers.

As in the early stages of theirdevelopment, credit unions in themiddle decades of this century pro-moted the individual goals of theirmembers. Though they stressed coop-erative activity as the means to thesegoals, their primary purpose was notto strengthen collective forms of pro-duction and consumption. Althoughmembers had access to the creditunion through their common work-places and associations, they coopera-tively managed their combined capi-tal in order to extend personal finan-cial services to their membership. Inthese years, credit unions assistedcommunities mainly by assisting theindividuals who comprised them. On-ly much later did the community em-phasis come into focus.

Today, credit unions provide theirmembers a range of services whichgrow out of this early history. Theiroriginal purposes remain: to offermembers credit at low interest ratesand with flexible forms of repayment,and to stimulate savings. But thelow-cost loan is not the sum and sub-stance of sereices they offer. Equafly

NEIGHBORHOOD CREDIT UNIONSby Judith Wittner

34

important, credit unions make loansavailable to people who cannot meetcommercial standards of "credit-worthiness.' When banks refuse loansfor reasons related to the prospectivebhrrower's status-his or her workand credit history, employment pros-pects, residential stability, and thelike-they are in effect discriminatingagainst classes of potential borrowerswhose sex, race, age, or occupationmakes them "bad" investment risks.This in turn has a serious impact onthe communities in which these highcredit risk individuals live and dobusiness. In these ways, ordinary and"responsible" business practices con-tribute to the maintenance of inequi-ties in investment and consumptionopportunities, and to the continuingdeterioration of urban neighbor-hoods. By providing low cost loans tohigh risk individuals, credit unionsserve a need that cannot be met byprivate financial institutions. In sodoing, however, they assume therisks and the liabilities that the bank-ing business tries to avoid: high ratesof deliquency: small, administrativelycostly loans; and low levels of savingsincome for investment.

Credit unions attempt to addressthese problems by providing yet another set of services: "credit coun-seling." These services emphasizeconsumer education and an introduc-tion to the uses of credit for thenovice in banking and financial prac-tices. At a very basic level. the serv-ice is geared to those who might beunfamiliar with and intimidated bythe commercial world of finance. Oneworker at the Northside FederalCredit Union described this servicefrom the point of view of the new-comer:

You can come in here and gettwo to three hundred dollarsright away. You're not lookeddown on. You don't have to bedressed in a suit and tie, orhave a brand name suit on.

Loan officers advise and assist pro-spective borrowers, informing themabout credit, banking, saving, andborrowing, and providing individualized personal services as well. Oneloan officer described her work as fol-lows:

We try to figure out if there isa different way to go if theycan't afford what they want.For example, we could extendthe length of the loan. Weshow them in actual dollarshow much it would cost. Orthey could use their sharesand reduce the interest. Mostpeople reduce the interest. Wetry to work it out the bestway. Most people who come

here never borrowed before.They don't understand inter-est. We show them the actualamount on the tables.

Loan officers and other credit unionvolunteers take an interest in theuses to which their loans will be put,but they do not employ the samestandards as bankers interested inmaximizing profit:

A woman wanted to borrowfrom us to buy a big Buick. Itwasn't a sound investment. Infact, the blue book value of thecar was lower than the askingprice. She listened to us andbought a much smaller car.

Clearly, such services are impor-tant and valuable to the credit unionmembers. In small ways they help torestore to individuals some of whatthey have lost in the normal func-tioning of the present economic sys-tem. Nevertheless, at the level of in-dividual service, credit unions arecaught in a contradictory set of cir-cumstances. First, if they are to fillthe void left by banks and provideservices to those who are most inneed of them, they run the risk ofdepleting their reserves and limitingtheir effective range. Thus, they arelikely to find themselves underpressure from members and from fed-eral regulatory agencies alike totighten their loan policies and to raisetheir interest rates to borrowers,undermining the very purposes forwhich they were organized. Second,,if they remain fixed at the level of ser-vice to individuals, financial "band-aids" and "crotches" are the onlytreatments they can offer. Preventivemedicine-restoring power and re-sources to the people-requires agreater emphasis on collective goals.By themselves, of course, creditunions, even those organized as coop-erative societies dedicated to collec-tive goals., cannot effect majorchange in the economic environment.However, the neighborhood or com-munity development credit unionmay be one factor ultimately contrib-uting to this end. The next sectiondescribes these organizations.

CREDIT UNIONS AS NEGHBORHOODINSTITUTIONS

In politics, the theory of counter-vaiiing powers holds that the devel-opment of powerful interest groupsstimulates the growth of counter-organizations on the same scale. Forexample, big business brings forth itscounterpart, "big labor." Creditunion history demonstrates both theinsights and the limits of this theory.Credit unions are organizationswhich concentrate small individualsavings as potential capital, bringing

their combined owners greater equal-ity of resources-"money power"-inthe competitive market-place.However, the history of credit unionsshows that while cooperation has itsadvantages for producers and coo-sumers. it has not enabled them tomatch the resources and power of pr-vate finance. Nor has the desire tocompete with capitalist enterprise onequal terms dominated credit unionphilosophy until recently. For muchof this century, leaders of the creditunion movement promoted the ex-pansion of credit unions among in-dustrial, transportation, and com-munications workers and amongstate employees by stressing the ad-vantages to management of employeefinancial stability and economic well-being. Credit unions from this pointof view were not agencies of socialchange. Quite the opposite. Theywere designed to prevent mobiliza-tion for change by correcting some ofthe most blatant abuses of the moneysystem such as usury, and by pro-viding more security to working classfamilies.

In the post-war decades, however, anumber of forces converged to changethe focus of credit union activity, tostimulate anew it. potential to sup-port alternative forms of economicorganization, and to enhance people'scontrol over the conditions of theirlives. Briefly, urban decay and politi-cal cnsis stimulated attempts by na-tional credit union leaders and federalofficials to adopt credit unions aspart of a package of urban reform anddevelopment. As a result, the Of ficeof Economic Opportunity's Commun-ity Action Programs in the sixtiesoften included funding and technicalassistance to targeted communitiesfor the development of credit unions.Two such credit unions, the PisenNeighbors Federal Credit Union,serving mainly Hispanics, and thePrairie Halsted Federated Churches,an all-black group, were organized inChicago during this period. These ex-periments met with limited success.Nevertheless, the legacy of the OEOprogram was a new definition of thelegitimate "field of membership"from which credit unions might bebuilt. The early successes of thecredit union movement in this coun-try had been among industrial work-ers, and later among white collar,salaried government and pnvate em-ployees. As the movement developedits own state and national organiza-tions, and as state and federal legis-lation surrounding credit unionsgrew, these successes were institu-tionalized in the law. In 1972, theFederal Credit Union Administra-tion, the federal regulatory agency,formally added the urban residentialcommon bond to the field of member-

35

ship definition for federally charteredcredit unions.

This new definition made it possi-ble for residents of urban neighbor-hoods to enjoy the benefits of creditunions and to receive federal supportand protection. Moreover, it providedurban communities with new tools tohelp organize resistance to forcespromoting urban decay: redlining.disinvestment, gentnfication, large-scale development, local unemploy-ment, and declining neighborhoodbusiness. Presently, limited federalmoney is available for the capitaliza-tion of Community DevelopmentCredit Unions )CDCU's), whose pur-pose is to stimulate and coordinateeconomic development in their owncommunities. Urban residentialcredit unions, particularly CDCU's,seek to reduce disinvestment andother neighborhood ills by mobilizingneighborhood capital to end the domi-nation of bankers, developers, andother "outside forces." Thus theydraw on the familiar notion of self-reliance which has played a majorrole in credit union philosophy, turn-ing that notion into one of collective,community-based resistance to de-structive private investment prac-tices and to the outflow of funds fromurban communities. The individualis-tic ideology of the earlier years, how-ever, has been abandoned by the newcommunityoriented credit union ac-tivists. In place of the focus on thriftand consumption, there is sew atten-tion to the usefulness of credit unionsas financial institutions which willenable the community to retain con-trol over its economic resources andto begin to transfer control overneighborhoods to the residents them-selves.

The North Side Federal CreditUnion is a neighborhood credit unionwith three branches on the north-side of Chicago. The members of theNorth Side Credit Union hope to usetheir organization as a community re-source in housing development andcommercial revitalization. The creditunion was organized in 1974 to com-bat redlining in the Uptown commun-ity, and today seeks to play a role inmobilizing resistance to gentrifica-tion and renewal pressures whichthreaten to transform many north-side communities solely for the bene-fit of developers, bankers, and poli-ticians. The credit union hopes to beable to provide financial backing topeople threatened by this process, tostabilize the neighborhood, and tohelp the neighborhood retain its classand ethnic balance. While they can-not hope to match the power and re-sources of commercial lending insti-tutions, they hope to contribute tochange on the community level byhelping the community to break away

from its almost complete dependence trading in money and credit. General-on financial institutions which it can- ly their financial basis is the poolednot control. savings of the members who in turn

Credit anions, especially neighbor- may borrow from their credit onion athood credit unions, have the potential lower rates of interest than those of-to become inks in the developing net- fered by banks and other commercialwork of democratically organized lenders. Banks also accumulate reve-groups which aim to establish forms nue as savings and redistribute it asof popular control over the workplace, loans, but there is a critical differencethe marketplace. and the neighbor- between these private, for-profit oper-hood. While credit unions and other ations and credit unions. Banks,cooperative enterprises embody unlike credit unions, restrict invest-many shortcomings related to their ment and loan decisions to a small in-relative powerlessness and their de- ner circle, Patrons of a bank are thependesce on private interest, they are bank's clients and customers, with-nonetheless important experiments out the right or the power to partici-aimed at developing more egalitarian pate in decisions concerning the usesmodes of production and consump- of their combined capital. Patrons oftion. Their success will depend on credit unions, however, own and con-whether they can overcome their frag- trol the institutions which servementation and localism without at them.the same time undermining their in- Credit unions are organized astention to build. in their daily practice. democratic associations, Each mem-workable forms of democratic partici ber has an equal say in the selectionpation which will mark the transition of officers and may participate in thefrom exploitative systems of produc- construction of credit union policy.tins and exchange to a newer world Members of the credit union elect thewhich we will all shape together. Boord of Directon and the members

of the Credit Committee. They mayHOW ARE CREDIT UNIONS also vote on proposals to merge withSTRUCTURED? other credit unions and to convert the

The organizational structure of credit union from holding a state to acredit unions is dictated by law in the federal charter, or vise versa. TheUnited States. The Federal Credit Board of Directors is responsible forUnion Act provides that any seven or the direction of credit union affairs,more persons may apply for a federal including 1) bonding employees or of-credit union charter. The field of ficers who handle funds; 2) control-membership is limited to "groups ling investments: 3) setting thehaving a common bond of occupation amounts, terms, and rates of loans;or association, or to groups within a 4) declaring dividends and interest;well-defined neighborhood, commun- 5) setting the wages of all employeesity or rural district." In addition to of the credit union; and 6) determin-individuals, organizations such as ing the number of shares each mem-other credit unions and community ber may hold. The Board generallyassociations, whose members meet consists of between 5 and 10 membersthe requirements of the field of mem- who are elected at the annual mem-bership of the credit union may join bership meeting. Federal regulationsit. Potential organizational members and most state laws prohibit payinginclude churches, neighborhood asso- members of the Board. The Boardciations, food and housing coopera- elects a president, vice-president, sec-tives, recreational associations, and retacy and treasurer from among itsthe like. members. Usually, among the offi-

Before a federal credit union is cers, only the treasurer receives com-chartered, the National Credit Union pensation.Association must determine its eco- The Credit Committee reviews allnomic advisability. To receive a char- applications for loans. It is requiredter, organizers of residential credit by law and is elected by the generalunions must demonstrate that there membership of the credit union. Us-is a minimum potential membership ually it has at least three members.of at least 300, must give evidence of Statutes permit (but do not require) itgroup interest and leadership, and to delegate its functions to loan offi-must show the willingness of volun- cers, who are appointed by, and re-teers to assume responsibility for sponsible to, the Credit Committee.running the credit union. All mem- The Supervisoiy Committee makesbers of the credit union must be with- annual audits and checks credit unionin the field of membership set forth in operations against the federal guide-the charter. Members of residential , lines. It is appointed by the Board ofcredit unions must live or work with- Directors or elected by the members.in the boundaries of their designated Credit unions may also appoint orgeographic area. In addition, each elect a fembership Committee whichmember must purchase at least one functions to certify the elgibility of$5 share in the credit union. prospective members, a Delinquency

Credit union' ree cooperatives Committee, an Investment Comonit-

36

tee to explore potential investmentopportunities, an office manager, andother employees. The organizationalstructure of credit unions is shown inthe following chart. This chart, aswell as a more complete description ofcredit union structure and organiza-tion, can be found in Melvin, Davisand Fischer, Credit Unions and theCredit Union Industry (New York In-stitute of Finance, 19771.

ORGANIZING A CREDIT UNIONThe steps necessary to organize a

neighborhood credit union are out-lined here. More detailed descriptionsof the process may be found in thebooklet, "Community DevelopmentCredit Union," available for $1 fromthe National Center for Urban EthnicAffairs. Additional sources of infor-mation and assistance cam be found inthe "Resources" list.

1. The first step in organizing aneighborhood credit union is to forma Sponsoring Committee consistingof the core people interested in theproject.

2. Look for support from an estab-lished community organization suchas a church, business, or social ser-vice agency. The sponsor is a key to acommunity credit union's ultimatesuccess. Sponsors may provide as-sistance in the form of office space,access to potential members and vol-unteers, and other ser-ices. Addition-ally, a sponsoring agency may be-come a critical link between the creditunion and the community it hopes toserve. The North Side Federal CreditUnion is sponsored by the UptownCenter Hull House, a relationshipwhich has helped the group to projecta community service orientation tothe surrounding neighborhood and toestablish its eligibility for federalfunds as a community developmentcredit union.

3. Begin to organize people in thedesignated neighborhood. Organizersshould hold meetings with neighbor-hood residents and organizations,and with others whose knowledgeand experience with credit unions willbe helpful. At this point appropriateorganizations and agencies should be

contacted to provide technical assist-ance. The resources of the NationalCredit Union Administration, the IWi-nois Credit Union League, and the Il-linois Department of Financial In-stitutions are available withoutcharge to groups attempting to estab-lish credit unions.

4. Survey the community for inter-est and invite residents to a publicmeeting where credit unions will beexplained and volunteers identified.This is an especially important step,since finding an adequate number ofvolunteers is critical in the earlystages of organizing the credit omion.

5. Prepare for a review by the fed-eral regulatory agency which over-sees federal credit unions, the Na-tional Credit Union Administration(NCUA). The NCUA considers threefactors before granting a charter toneighborhood credit unions: the com-mon bond and field of membershipchosen. the economic advisability ofthe credit union, and the characterand fitness of subscribers.

6. Once a charter is granted, theneat task of credit union organizers is

Credit Union Structure and Organization

I CREDIT UNION MEMBERS I

elect

RD OF DIRECTORS CEDIT COMMITTEE

AppointsAppoints

RER AFICE |

Optional

37

to search out possible subsidies in theform of office space, CETA job slots,volunteers, training and technical as-sistance, operating money, office sup-plies, and chartering expenses. Regu-lar savings derived from payrolldeductions can be important sub-si"Des for the credit union. Towardthis end, community institutions(civic groups, foundations, churches.and schools) should be contacted, andpress releases distributed to city andneighborhood papers. Perhaps someof these local groups will be willing toinvest in the credit union without col-lecting interest for the initial periodof its operation. The North Side Fed-eral Credit Union has developed a"Pay Yourself First" program to en-courage members who do not have ac-cess to payroll deduction plans tosave regularly.

7. At this stage, members can pre-pare to open an office. This involvesdeveloping short and long rangegoals for growth, training creditunion officers, and ordering supplies.Thus, the credit union is establishedand can begin its service to the neigh-borhood.

SOME PROBLEMS OF CREDIT UNIONORGANIZATION

Within guidelines set by state andfederal regulations, and within theconstraints of good loan and invest-ment policy, members of a creditunion and their elected representa-tives control its operations and thedisposition of their combined sav-ings. In practice, these regulationsand the constraints imposed by thebusiness and financial environmentwithin which credit unions existcreate formidable obstacles to therealization of internal democracy andto members' control over invest-ments

The democratic decision-makingapparatus of the credit union dependsto a large extent on the dual role ofthe volunteer who is both providerand client of credit union services.Credit unions are built on the labor ofvolunteers, and the voluntary com-mitment of members to the work ofthe credit union has been a centralprinciple of this movement. Indeed,there would have been no movementat all without members' contributionof their time and effort. Volunteershave been the foundation of the coop-erative and democratic impulse whichhas guided much credit union activ-ity. Nevertheless, the attempt tooperate these organizations with vol-unteer labor has met with mixed suc-cess. The work required of volunteersis time consuming and technically de-manding. It is not easy to enlist suffi-cient numbers of people who are will-

ing and able to donste their time tothe necessary tasks. As a result,credit unions often are plagued withtoo much work and too few workers,exacerbating the "burn-out' andhigh turnover endemic to organiza-tions dependent on volunteer labor.Moreover, as federal regulation andsupport grow, credit unions are in-creasingly held to standards of man-agement and accounting that requiretraining and technical asoistancefrom experts and which place a pre-mium on long term experience in thework of the credit union. But sea-soned volunteer workers are scarce.Problems such as these generatepressures on credit unions to relymore and more on paid and profes-sional staff, though a lack of fundshas held this tendency somewhat incheck.

The lack of capital is one major rea-son for the relatively weak and un-even growth of a cooperative sector inthis country, and the appearance ofnew sources of funding and assist-ance will help to promote the greaterstrength and stability of cooperativealternatives to "business as usual."Nevertheless, some credit union acti-vists are wary of the trend towardprofessionalization which increasedfunding promotes, seeing in the reli-ance on paid staff and on standardconcepts of business efficiency athreat to members' control over theirinstitutions and to the concept ofcredit unions as democratic commun-ity organizations In their view, thegrowing role of the federal govern-ment in the support of communitycredit unions for the purposes of localdevelopment and control is simultan-eously threatening and promising. On

'the other hand, capitalization fundsare badly needed by community cred-it unions so that they may begin tooperate as agencies of community de-velopment. But these funds increasethe push toward a more conventionalorganizational structure, in whichhired staff and paid experts serve apassive client population. This is in-compatible with the ideal of coopera-tion and internal democracy.

Credit unions have always em-bodied these opposing and competingpossibilities. Whether they developas junior partners of the private com-mercial sector, extending smal scaleservices unavailable from the majorprofit-making institutions, or evolveas an integral component of an alter-native democratic and cooperativesector of production and consump-tion, depends in a way on the fate ofthe volunteer impulse. In this sense, adetermination to maintain the es-sence of volunteer labor, if not itsform, is critical Clearly, the activeand committed participation of the

members of the organization must bean integral part of any programwhich seeks to develop credit unionsas agents of social and economicchange.

ResourcesMoody, J. Carroll and Gilbert Fite. The

Credit Union Movemen- Oniniss ad Deretopenst, *BM-1970, University ofNebraska Press, 1971.This book provides a detailed and usefulhistory of the credit anion movement, itssuccesses and failures from the point ofciew of the national credit union leadership It is published under the auspices ofthe World Council of Credit Udo-s

Giles, Ricrard, Credit for the Millions,Harper, 1951.An interesting anecdotal history of themovement from the point of view of ordi-nary members of credit unions ispresented in this beok.

Freundlich, Paul led.I A Gsid, toCoopeertice Alternstiie-, CommunityPublications Cooperotive, 1979.This book. it praise of the cooperativemovement, describes the widerange eaperiments in cooperative business andcommunity organizations tnday. It isrspsciaily useful not only for its exten-sive coverage of cooperatives but obobecause it cntmains a full listing of contact, resources. and publications, in-eluding thoe usetfl to orgianrr ofcredit unions.

Ca-, Jobn end Rosemary Taylor lads).Coope, Communes, and CoUerties: Es-pr,-menis in Social Chonge is the 19605und 1970s, Pantheon, 1979.This is an as-seoment from a rndicalperspective, of some of the communal andcooperative actties of the last twodecades See especially the article by PaulStnrr. -The Phantum Community,where the distinction between adversaryand exemplary istitutions is developed.Starr is pessimistic about the ability ofthe cooperative movement to pruvido realalternatives, based on its past record ofcallapse and convergence with privateenterprise.

Mar,. Kar. Copital III, ForeignLagfuages Publihing Iouse., MoscowAn intrstig 1teresa ive view, muchmore optimistic ir found in this book,especially in Charter 27. "The Role ofCredit in Capitalist Production '.

Melvin. Donald. Raymond Davis andGerald Fischer. Cwdit Unions and theCredit Union Industry: A Study of thePoer, Orgonicano, Regulan, adCompetinos, New York Institute ofFioance, 1977.A comprehensive general -urce of in-formation on credit union organizationand the credit union industry

Lundberg. W.T. Consumer OwnrdSweden a Coopem-ve Demo-mey, Con-numers Cooperative Publibhing Associa-tion. 4294 Wilkie Way. Palo Alto Califor-sia 94306. 1978.A description of the succs-sful Swedishcnnsnmer cooperative movement and ofthe role credit unions have played in its.utc-..

83-512 0 - 81 - 6

38

An Asalyoio of Co.n.ssity De-l-opment Credit Usio.s 1971-1976. No-tionl Federntion of Commonity DeveIp-ment Credit Uoios.Thio book is oviloble for 6500 fomNFCDCU. 16 Coot Street. Booklyn.N.e York 11201 (212/522-5904). 0 org-niz tion mkich wos entblinked to protertnod promote the ioterests of CDCUe. The

orgooioatioo meets oouol.y ood pobbishes proreediogs reponr. od memon.boot CDCU.s

Community Developoent CreditUnwi.n. Economi s for NeighbhoroodsAlternative EronomicoThin pamphlet in vailhblr for S3.00 fromAlternative E on.ocis. P.O Boo 29146.W.shingtoo. D.C. 20017 4202/832 52001.Alter.otive Economics .1no providestreiniog for CDCU etaffs

Other Contacts forEstablishing Credit Unions

Notional Credit Union Ad.miotrotion

(NCUA), Region IV inclodee Ibiooiol)Federod Office Bu9diog 234 Noth Sum.mit Street. Rom 704. Toledo Ohio 43604(419/259-7511).Credt moions mont be hnrteed by eitherstate or federdl genies, bht Comm. oityDeveblpmet Credt Umoos mont be fed.e-ly chartered. AD federlly harteed

redit osin ore - apervined by NCUA.

llimois Deportment of Fiaeial Isti.totnons.This is the state *gecy that nopervijesstLte chrtered redit onions in Ilinois.Sovings beld in redit onioss ore bondedon required by im. Federl shre ino.r.osce coriig ssvings op to 640.000 ismondotory for feder credit ooios. hotoptional for thos milk st te charters.

Illosois Credit Union Leogue 1035Sooth York Rood Bensenville Ioioin60106 1312/7666650).The volostory nosociatios of Ifmonis

redit union, the leagon helps to form

oem c t roinn nod offers tchoic noemitom oi bokkepig, innxe. mogement. nd other dires.

The Institote of the Notional Center forUrbha Ethc Affnirs, 1521 16th St..Woshioglo. D.C. 20036 (2021232-36001.The Institnte provdes troioiog nd tech-ndir onnincame to orighborhood reditsiione end to groops imternted i form.ing o redit ion. A v-loble step-bystep goide to orgooiiog o cooonityredit onio. Commincoity Develpment

Credit Unison my be obtiod from theInstitute for 1.00.

Notional E onomic Development tmProject. 2150 Shactck Ave .Berkeley.Coiforni 94704Thin group has reetly pubished o mooo.I for group iterested im strtiog aCDCU, cald Community DevelopmentCredit Unison. It in voiloble from All-on Bronstem. t the obove oddress

39

Neighborhood service deliverymeans the provision of assistanceconsidered vital by community resi-dents. The various services maycome eat of the community itself ormay be provided by outside agencies.Such services may involve food, daycare, and medical programs, or sportsand cultural activities. The numberand type and means of delivery ofsuch services is so varied as to makeany general couunent difficult: thisis not to suggest, however, that suchan attempt is without value.

The following discussion on the de-livery of services to neighborhoods isbased on two case histories: a majorchange in direction by the JaneAddams Center of the Hull HouseAssociation: and the creation of freehealth clinics in Chicago. The experi-ence and insight of the following per-sons provided the basis for thearticle:

Bruce Young. director of the JaneAdams Center from 1969 until1979. presently Chicago 44th Wardaldermen.Ben Schesker. former Jsne AddoosCenter hoard member, and formerpresident of the board.Dr. Quentin Young. a member ofthe Medica Conmmittee for HumanRights. and director of the Department of Medicine at Cook CountyHospital. Chicago.

Each case involved major changeand considerable effort. Both metwith political or community resist-ance. The Jane Addams Center isstill an on-going service organiza-tion: the free clinics in Chicagolasted less than 5 years. These twodissimilar agencies may, hopefully,lead to a model for agencies provid-ing services to neighborhoods.

EXPERIENCE, ORGANIZATIONALHISTORY

It is most important that an orga-nization have an existing base, thatis. some experience or history. Dr.Quentin Young's experience, and

that of his colleagues on the MedicalCommittee for Human Rights dur-ing the Civil Rights movement, wascrucial to the success of the subse-quent free clinic movement. The sup-port they provided Civil Rightsactivists was twofold: they marchedas doctors with the other marchersto provide medical assistance in caseof violence and, by the very "author-ity" of their presence, acted to"diminish and contain violence." Itwas a relatively short-lived process.But what came out of their experi-ence with the Civil Rights movementwas a cadre of committed medicalpeople who were toughened by theirexperience and energized by theirsuccess.

The Jane Addams Center, on theother hand, was part of a long-estab-lshed institution, the 90-year oldHull House Association, which is afederation of social service centerslocated throughout the city. The As-sociation oversees the activities ofthe various centers and providesthem with administrative and logis-tical support. Having such a parentorganization provides innumerableadvantages-knowledge, connections,logistical and psychological support.Former Jane Addams Center board-member Ben Schenker noted, "withthe HuB House Association behindus, we were not a separate entity. TheAssociation could absorb our budgetdeficits for awhile. We had room tomake some errors."

DIFFERENT SERVICES, DIFFERENTORGANIZATIONS

Any volunteer organization-be itpolitical or charitable-needs a causeto define itself and to attract, moti-vate and maintain volunteers. Aninstitution like the Jane AddamsCenter functioned best with a cen-tral long-range direction such as ser-vice to the community. Mostly vol-unteer, ad-hoc groups such as theMedical Committee, usually need tofocus on immediate, ringing causes,and be prepared to move on to other

issues with a certain amount of flex-ibility.

The Jane Addams Center experi-enced one major change in clienteleand direction. Before the change-over, they supported music, art,ballet, and theatre programs. Ac-cording to Ben Schenker, "the com-munity that the Center was servingwas a middle and upper-middle classnear-the-lake constituency. WhenBruce Young became the director, theemphasis was placed on pantries.legal services, community organizing,and senior citizen groups. The em-phasis shifted to a different constitu-ency." That major shift in organiza-tional direction was to last for morethan 10 years.

The Medical Committee for HumanRights, on the other hand, found itsCivil Rights project at an end. "Theevolution of the Civil Rights move-ment," according to Quentin Young,"was such that a predominantlywhite, professional group, no matterhow well-intentioned, became sort ofanachronistic. In a friendly way theBlack movement suggested, and weacquiesced, that the medical pres-ence scheme was no longer desiredor desireable."

The Committee then was facedwith the question of whether itshould "disband and meet every 10years in the beer cellars of Munichand talk about the good old days inSelma, or continue as a human rightsorganization seeking repair or re-dress or reform of all the numerousinequities and hurts that the healthsystem was responsible for," Youngsaid. "That meant coming to gripswith the shameful two-class systemof care which relegated to the mostterrible fate many people who werenot by social class or arae in themainstream. These were unaccept-

,able, remediable conditions, and itwas just unconscionable, almost bar-baric for a society not to do so."Urban health care. then, was clearlyan area of dire need. It was a ringingcause, or, in Dr. Young's words, "an

NEIGHBORHOOD SERVICESby William Mahin

40

important source of energy.'

COMMITMENTAt some point an organization or

institution commits itself to a pro-gram or course of action. Prior tothe final decision to go ahead it iscrucial to understand the ramifica-tions and the future commitment re-quired by specific projects or pro-grams when dealing with neighbor-hoods and communities. Ben Schen-he!r commented, "You have to knowhow you're going to provide yourservices. You can't start out and doit half-assed. You can't start out andthen have to shut down. That's nogood, particularly if you throw outhope or promise to someone andthen have to pull your horns in."Schenker's statement coincides withone of the precepts of organizationtheory which states that, to raiseexpectations and then, after the en-citement of the change dies down, tolet the organization revert back toits former state, produces a depres-sion and a cynicism so deep as tometaphorically cut people off at theknees. To pull out once committed,then, can be extremely harmful and isethically wrong.

POTENTIAL RESISTANCEOrganizers or planners also have

to assess the possibility of resistanceto the new program. Establishedagencies or individuals may react, orperhaps over-react. The plannedservice may fill an obvious need andbe non-threatening, but, according toDr. Young, "a very strong, orderlyestablishment with a large variety ofcontrols and reprisals and punish-ments available doesn't demand thatyou be a threat to them. They willcast out, ostracize, eliminate or de-stroy any variation from the norm."

Resistance to the free clinics was"just shameful," according to Dr.Young. The city "introducefd andpassed a law which allowed theBoard of Health to inspect and li-cense free clinics. It was clearly adiscriminatory law. The city didn'tand wouldn't dare extend that law toall doctors' offices, which very muchneeded some observing, not to men-tion licensing."

In fact, it turned out that the citydid more than pass an inspection or-dinance. "Subsequent relevations onthe basis of suits against the FBIand the Chicago Red Squad havedemonstrated," Dr. Young stated,"that these clinics, particularly theclinic run by the Black Panthers,were the object of very intense policescrutiny. and I might say, subver-

An organization needs resourcesaed power sufficient to fight off such

resistance. The Medical Committeefor Human Rights, for example, wasable to get a wide spectrom of pro-fessional and community people totestify regarding the licensing ordi-nance before then-Alderman ClaudeHolman's Health Committee Profes-sors from various medical schoolswho also had served in the clinicstestified; licensed doctors who stillwere training gave testimony: com-munity group representatives spoke;and, finally, patients testified thatthey had received "better care thanever before" at the clinics.

The hearing, according to Dr.Young, successfully showed that li-censing of the free clinics was "nota question of public health or hy-giene" but, rather, was a method of"harassing" medical facilities whoseonly offense was to provide medicalservices for free. It demonstrated,Dr. Young stated, the "double stan-dard" which operated in favor ofprivate clinics against their freecounterparts.

The Medical Committee m effectwas able to muster enough power tomake this an economic rather than amedical issue. "The very monolithicChicago City Council under then-Mayor Richard Daley de-fanged thelaw," according to Dr. Young. "Theylimited the punitive elements of thelaw and, to the best of my knowl-edge, it was never enforced."

The change in direction by theJane Addams Center also met withconsiderable resistance from thecommunity. There was resentmentat the loss or cutbacks of culturalactivities. "The Center was undersevere attack," according to BenSchenker, "from neighborhood peo-ple and businesses because of thetype of person who was coming intothe building" after the change in di-rection. "One of the early programsinstituted was a drug abuse pro-gram. For a while you could buy anydrugs you wanted on the steps of theCenter. It was one of the largestdealing areas on the North side ofthe city. So the program had to cyclethrough all that sort of stuff. Thecosts involved," Schenker added,"were very great. For a while therewas a tremendous erosion of finan-cial support."

A somewhat different perspectiveis provided by former Center Direc-tor, Bruce Young, who seemed toaccept some resistance as a necessaryby-product of this radical change inagency direction. "Our philosophy,"Young stated, "was to go as far aspossible in terms of accomodatingeverybody and anybody and makingrules only when the situation re-quired it. We would go as far as wecould to accomodate the diversity ofthe groups until we ran into prob-

lems. Then rules had to be set up orgroups had to be asked to leave."Despite some resistance, "there wasgenerally an unusual kind of toler-ance from the kind of people thatlived in our community." Youngconcluded.

Some organizations are betterequipped than others to handle resis-tance. Resistance and opposition cer-tainly were not foreign to HullHouse "In a desire to foster a higherpolitical morality and not to lowerour standards," Jane Addams her-self wrote at the turn of the century,"we constantly clashed with theexisting political code. We also un-wittingly stumbled upon a powerfulcombination of which our aldermanwas the political head, with its bank-ing, its ecclesiastical. and its journal-istic representatives which resultedin an opposition which has mani-fested itself in many forms; the moststirring expression of it was an attackupon Hull-House lasting throughweeks and months by a Chicagodaily newspaper." (Jane Addams.Twenty Years at Hall-Hocoe, pp.223-224.)

NEEDED SERVICES, NOT IMPOSEDSelling the contemplated service to

the community is important. For theJane Addams Center, Ben Schenkernoted, "I don't think we did as gooda public relations job as we shouldhave. I would think that a concertedpublic relations program to sell thenew concept to the community atlarge would be a very worthwhilefirst step: 'This is why we're chang-ing. This is what we're doing. Thisis what we hope to accomplish. Thisis how we're going to do it.' Andthen bring as many communityleaders as possible into the processand try to get their stamp of ap-proval to go along with it."

Bruce Young offered a general oh-servation: "I think there are numer-ous illustrations of a director cominginto an agency and saying, 'This iswhat I'm going to do,' and then go-ing ahead and doing it without anyinteraction with those who are to beserved. Somewhere down the pike heor she is going to run into majorroadblocks. Many directors of agen-cies have come and gone quickly be-cause they thought their bright ideawas going to be automatically ac-cepted. "

BOARDS OF DIRECTORSIn the face of opposition, a power-

ful, supportive board of directorsbecomes essential. In the case of thefree clinics, it can be assumed thatthe city never would have permittedthe doors to open without the pres-tigious Medical Committee behindthe effort. Conversely, Bruce Young

41

wanted a board of directors for theJane Addams Center "that was pre'dominantly made up of communitypeople So we began a diligent effortto make sure more board membersfrom the community were on it,people who were on welfare, peoplefrom the Latino community, and soforth." Even in the case of the Cen-ter. however, that was not always soeasy to accomplish. Ben Schenkeragreed "It's important to have asolid community base. Everybodyoays, 'We have to have the disad-vantaged and the minoritien on allthese boards.' But the problem isthat mamy of them either don't havethe skills to actively participate insomething like this. or they plainjust don't have the time. People whoare disadvantaged are working toohard keeping things together tostart going to meetings," he said.Quentin Young observed that coin'munity boards "really are a mixedbag. The very communities you'redealing with are so down-troddenand so co-opted in general that it'sfrequently easy for local politicaltypes, the local Democratic machine,or local officials to assert and main-tam hegemony. In a word, the peopletend to be manipulable. But notinvariably."

"What you need," Schenker added."is a core of community people-notnecessarily your targeted group inthe community-who will supportyour organization, who will bringwhatever administrative or financialexpertise they've gained in their oc-cupation to it, and who will bringthe support of that element of thecommunity."

Essentially the Medical Commit-tee served that very function. TheCommittee, Dr. Young stated.brought in "a very hardy band ofmedical students-you can measurethem by the hundreds-who wereeager to do something like this. Wealso knew the answer to the techni'cal equipment and supply questions:what's the best kind of examiningtable for the dollar? What kind ofequipment should be in each exasn-ining room? We brought record-keep-mng systems. And we were not aboveholding benefits and fund-raising."

STAFRNGThe staff of any volunteer agency

is of paramount importance: thereusually are too few salaried staff be-cause of financial constraintm they'reon the front lines dealing with allsorts of demanding publics; theyhave to be unusually sensitive; thehours are long and bad, and so on.Because of the nature of its cause,the Medical Committee apparentlydidn't have too great a problem pro-viding medical staff on a project

basis the Jane Addams Center. whichwas providing a long-range and moregeneral level of service, had a moredifficult time enlisting staff.

First of all, according to Schenker,they had to replace the existing staff:"You get rid of your ballet teacher.You get rid of your music teacher.You get rid of all the people doingthose kinds of things. You replacethem with people who are commun-ity organizers." In the type of multi-service, urban agency such as theCenter in its new configuration,Schenker noted, "you have to have astaff that's willing to come and openup in the morning and stay thereuntil the legal clinic cioses at 10P.M., and pretty much work a 7-dayweek. If possible, they should live inthe community. That makes the jobharder for the staff, because theycan't ever get away from their jobs.But on the other hand, particularlywhen you're starting something. itmakes it better for the communityand for the organization because youthen don't close up shop and goaway."

In many ways the overall staffingof the Jane Addams Center resem-bled o typical small corporate struc-ture. one which may well be appropriate for a similar neighborhoodservice delivery organization. In ad-dition to the Board of Directors, Di-rector Bruce Young and an AssistantDirector, the Jane Addams Centertypically had paid staff membersdirecting the following departments:

I for each of the 3 day-care centersI for the youth programI for the swimming programI for the artlphoto programI for the theatreI for the senior citizen programI community organizerClerical and maintenance support

were provided for the administrationand the various departments. Thenumber of staff and programs variedthroughout Director Young's admin-istration. However the largest staffduring this period numbered 125persons (many of whom were CETAsubsidized). The overall annual bud-get for the Center had reached justless than 11,000,000 by 1979.

Perhaps atypically the Center hadno volunteer program as such. Vol'unteers instead were recruited fromthe various programs. Volunteerspose special problems. They are notsalaried and cannot be treated assuch. They work for other thanmonetary rewards. which may besocial or involve self-esteem or asense of providing service and help.In other words, volunteers must besatisfied or they will leave the organi-cation.

Quentin Young put it more prag-matically: "Volunteers are volun-

teero. They may be very good andvery dedicated. But more typicallythey tire, they fatigue, and other de-mands for their time-which areprobably more rewarding, lucrativedemands-begin to take precedence.I think all the clinics experiencedsome attrition, although it must besaid in tribute that more than a fewdoctors and others were with thesecenters from the day they opened'till the day they closed." In anycase, it seems obvious that,'withoutthe wage motive, volunteers needmore organizational attention paidto their own personal needs than dosalaried employees in the private orpublic sector. That places a demandon all members of the organizationto keep the agency workable on aninterpersonal level.

It is difficult to be authoritarianin a volunteer organization. As maybe inferred from several of the pre-ceding examples, the Medical Com-mittee tried to maintain a serving.supportive profile. "We conductedourselves," Dr. Young stated, as ifthe clinics were "our sponsors or ouremployers. not the other way around."

Bruce Young believed that "thereneeded to be a maximum amount ofparticipation in decision-making. Wespend considerable hours doingthat." On a practical, day-to-daybasis. "I gave people freedom withinthe confines of the goals of the pro-gram. I found that there was muchmore camaraderie among staff withthis approach than with their feelingthat 'this was the boss telling theswhat they had to do.' I felt morecomfortable in a team operation thanin laying down rules from on high."This managerial style is in line withcontemporary organizational theory,which suggests that, in an organiza-tion facing a multiplicity of non-cou-tine tasks in a situation of high un-certainty, the sharing of responsibil-ity and authority in a supportive,participative environment is appro-priate.

BROADENING THE BASEThe Center found it valuable to

broaden its community base. Ac-cording to Bruce Young, 'we verydeliberately set out to locate particu-lar agencies who were serving sameof the same priority population thatwe had and urging them to utilize ourspace, thus forming joint efforts.

By providing free space and elec-tricity to the Lakeview Food Pantry.for example, we got access to anemergency food service that we didnot have to manage." Other groupsrented or used space or facilities.

A good portion of Young's timewas spent on such integrative com-munity activities. "I was President

42

of the Lakeview Citizens Council fortwo years. I was President of theLakeview Mental Health Council. Iwas President and active in our localschool council. I saw those activitiespartly as an extension of my ownwork assignment at the Jane AddamsCenter." Outreach and expansion ona continuing basis. then. were inm-portant facets of the Center's acti-ities. Interestingly, this apparentlywas not the case with the project-oriented free clinic organization.

SENSIVITY TO COMMUNITYAn incident with the Black Panther

Clinic best illustrates the necessityfor a continuing sensitivity to thevery real concerns-such as the prideand the sensitivity-of your constitu-ency. "The volunteer doctors servingthe Black Panther conic," accordingto Dr. Young, "dressed in the vogueof the day-blue jeans, casual andrather sloppy. After the clinic hadbeen open for about two weeks, all ofus were asked to go into the doctors'dressing room. The director of thechnic-one of the Panthers-pointedto a rack which had all manner of doc-tors' garb. He said, 'We've purchasedthese. Pick one that you like thatfits you. You're confusing thepatients.' "

"What the young doctors didn'trealize-to their discredit as far asI'm concerned-was that their ap'pearance, which they viewed as amark of their own sense of equalityand solidarity with the patients, wasa confusing and oppressive thing todo. You're dealing with people-we'retalking now about the West SideBlack ghetto-whose every experi-ence in life is bitter, their grindingpoverty, the terrible places they livein, the day-to-day violence and alco-holism and rats and you name it.They have major health problems.They have life experiences and drawconclusions from them like every-body else. In this particular case itwas that all the doctors they hadever dealt with wore a certain profes-sional garb. Now they're comingto a center that's supposed to besensitive and concerned about themand yet the people who are calleddoctors look scruffy. I don't think,"Dr. Young concluded, "that it takesa lot of wisdom to see how thatcould confuse people and that theywould wonder, 'Are these doctorshere because they can't get workanywhere else?'

LONGEVITYVolunteer organizations usually

have a relatively short life. Theycomplete the task, burn out, die out,lose key people, get co-opted or takenover, get old, wither, become mori-

bund or fade away. It is remarkable,then, that the Jane Addams Centerhas lasted more than a decade sinceits major shift in direction and clien-tele. In Ben Schenker's words. "TheCenter's sort of taken its place as amore mature, established organiza-tion within the cammunity." TheChicago free cinics, more typically,are gone, "wiped out," according toDr. Young, "by the elementary costsof light and heat, medical suppliesand telephone bills." Some of theother clinics throughout the countryremain, but, Dr. Young noted."those that have survived have be-come more institutionalized. They'vebecome part of the system," which isnot surprising, since any viable orga-nization is subject to continuing,powerful pressures to return to amore centrist, middle-of-the-road or-ganizational posture. Frequently, forexample, good programs are takenover by more "established" institu-tions, such as the government. Thus,although the free clinics no longerexist per se in Chicago, there is, ac-cording to Dr. Young, at present alarge federal effort to develop similarcommunity clinics. Cook CountyHospital (of which Dr. Young is Di-rector of the Department of Medi-cle) is currently supporting eightsuch clinics.

The free clinics, then, pointedly in-dicated a need, devised a remedy.and implemented a solution. Theproblem and solution were subse-quently recognized and emulated byan organization with vastly greaterresources. This may not be an idealsituation; but it indicates that theclinics in fact have brought aboutsome measure of lasting socialchange.

IMPACT AND EFFECT AND MEANINGThe overall question becomes: Are

such essentially enormous effortsworth it? It's usually impossible tojudge the effect of any social pro-gram or movement over time. Thereare just too many variables, even ifmeasurement is being attempted(which is rarely the casel. It wouldbe difficult, for example, to determinethe amount of crime or the amountof violence prevented by the exist-ence and work of the Jane AddamsCenter in Lakeview over the lastdecade-or the amount of good forthat matter. It is possible to enumer-ate the services performed and thenumbers of individuals who passedthrough the various programs, but itis not possible to make any quanti-fiable determinations with respect tolasting impact. One can only say-innon-quantitative fashion-that theydid admittedly good works, and thatthey survived.

Conversely, the shorter-lived, singleissue, highly symbolic free clinicmovement had an obvious effect: theclinics have. first of all, been emu-lated by the federal government.Moreover, by their very existence,the clinics had an impact on the"established" practice of medicine."It should be said," Dr. Youngnoted, "that these clinics mightilyaffected the character of outpatientmedicine, particularly in relation toinner city communities. In Chicagoand elsewhere," he concluded, "theseclinics had the effect of influencinga more open outreach and communi-cations which replaced the tradition-al hard-bench, very cold. very dis-tant, very oppressive atmospherethat still characterizes all too muchof ambulatory care for the poor."

At some point, the effectiveness ofa program must be measured againstits financial and other costs. Theymay well be considerable. "Like Isaid," Dr. Young stated, "Nobodysaid it would be easy. We didn't ex-pect it to be a piece of cake." Thatmay well be an understatement. Buta general conclusion that might bedrawn with respect to the delivery ofservices to neighborhoods is that anymajor voluntary service delivery pro-gram entails of necessity innumer-able problems. On the other hand,THAT IS NO REASON FOR NOTUNDERTAKING THE PROGRAM.Despite the lack of hard, quantifiablemeasuring devices for evaluating theeffect of such work, and althoughcountless such ventures have failedand been long-forgotten, one has onlyto look at the number of individualswho have been truly and profoundlyhelped, and at the significant numberof institutional and governmentalpolicies that have changed either inemulation of, or in response to, suchservice delivery programs for a much-more-than-adequate rationale for thecontinuation of such efforts.

ResourcesAddams, June. Twesty Yars at Hoa

H ouse. Signet. New York: 1938.Jene Addams' eaperiaces as the founderof Hull House, one of the esarliest andperhaps most famous of the organiza-tions providing services to neighbor-hoods.

Pivea, Frances Fox and Cloward. Rich-ard A. Reguodag the Puor The Four-do-s of Pabhc Welfr Vintage Books.New York: 1971.An extraordinary document on how thegovernment provides ser-i-es to the poor.It becomes chillingly clear that ight-esusness, politics and service do not mix.The seed for other forms of providingservices is apporent.

Piven, Frances Fox und Cloward. Rich-ard A. Poo, People's ooremens Why

43

7Thy Soosed Ho-o Th"y Fcil. Vimt-g of Entrpnr McGa.-H2L Nm Yofklr Mooe. JODD J.. ald Lo.ch. Jay W.Book1. Nr York 1979. 1960. "Beyood Thoeoy Y." H B-iod B

tt-Roi-. May-Jooe. 1970.Althomgh rore o-tio.oI than onto, McGrg.r's de ioo f Theory Xflnb y A dohica stdoy O the tqoioa of pp-hood io ito foot Poo, Proplk'. Mo.- Y styf. of ogeo t p-ovided the paite orga i l otylo of ogs-neto lo aoethfoso v h hel t d be e fo vially ab orgooiaatioo thbory moot, which eseatially coocldaes thattrilod clyoe o why ohtotee orgea which hb followd How wokem staff the Styl hd derive fs the o rgi

._ sc e bo vo, teeeo ) ohoold be peodeod a well etioo ite. iL., lvel of etioty.dtoooed e melovt aod appUlb` h troted -he-hi br of -sid le. bk lad the otmre of tha task, od so oo. midat the -oooooity vel. vnce to hobooah-d vice deivel y Ot fm so -o .tna k q4boo

MWGregoc, Dmogls. Th. Huoo Side oago tiaO . which doi-s soiveosal appliability.

44

Religious organizations in urbanneighborhoods often have becomedisconnected from the ongoing life ofthe community. Many communityleaders view them as inconsequen-tial, self-concerned social groups. Thecultural functions which they onceperformed in simpler societies havebeen fragmented into separate realmsunrelated to religion: education, wel-fare, family services, the arts and en-tertainment, morality, social mythol-ogy, and a host of others.

At the same time, as neighbor-hoods have been incorporated intoimperial metropolitan areas, the di-rection of these functions was re-moved from local control. The inte-gral relationship of neighborhoodreligious organizations and the totallife of the community was broken. Inpluralistic communities, many per-sons welcomed the severing of thecommunity/religion bond as a releasefrom entrapping cultural shackles.

The religious organizations oftenreacted defensively, both to the lossof functions and the consequent dropin community esteem. They turnedin upon themselves, creating islandsof withdrawl and security in a threat-ening world of change. They came tosee themselves as refuges located insocial and cultural wastelands and inhostile surroundings. Their internalorganization was created withoutregard for the nature of the hostneighborhood. As one satirist put itin song, "A mighty fortress is ourchurch, a bulwark never failing."

The movement for the renewalof urban society has included a wide-spread rethinking, restructuring andrevitalization of neighborhood reli-gious organizations. A new efforthas been made to examine the gen-uine and essential functions of reli-gious organizations in communities.The civil rights movement, andother such reform forces of the recentdecades, called for the support of thechurches and temples. At the sometime, religious leaders were reexam-ining their historic role and calling,

asking anew what their faith requiredof them. A new, mutual, if still some-what wary, respect began to grow be-tween these revitalized religious or-ganizations and their neighborhoods.What are the essential functions a re-vitalized religious organizationshould serve in the neighborhood?THE ECUMENICAL INSTITUTEAND FIFTH CITY

An answer to that question is be-ing sought on Chicago's West Side.In a neighborhood designated as"Fifth City," the Ecumenical Insti-tute began to experiment with fivefacets of renewed churchlcommunityinteraction:* the assurance of social justice* the witnessing love* the celebrational focus* the training in relevant life

methods* the sustaining common com-

munity life,These five functions of revitalized re-ligious organizations are abstrac-tions that require definition in orderto understand their potency.

FUNCTIONS OF REVITALIZEDRELIGIOUS ORGANIZATIONS

Social justice has been a centraltheme of the Western Judeo-Chris-tian Islamic religious tradition fromthe Mosaic "Let my people go!' tothe plumb-line of Amos measuringthe social righteousness of ancientIsrael, to the Christological concernfor actions "done unto the least ofthese my brethren." and the Moham-medan reforms aimed at the ex-cesses of sixth and seventh centuryArabian Christianity. The contemporary concern for social justice re-quires more than charitable compas-sion. It requires redesigning thestructures of society to assure socialequity and human dignity.

In Fifth City a comprehensivemodel of social care was designed.An analysis of the 625 major prob-lems articulated by neighborhoodresidents gave a wide-ranging scopeto community planning. Community

residents were organized into fivegroups, called "guilds," to attackeconomic. educational, symbolic,stylistic, and political problems.These guilds have produced a seriesof new community institutions.Among these new institutions are aHousing Redevelopment Corpora-tion. an award-winning preschool, aperforming arts ensemble. blockclubs, and a safe-streets radio patrol.A revitalized religious organizationdoes not need to provide all thestructures 'needed to sustain com-munity life. Its function is to cata-lyze the existence of those institu-tions whose absence is perpetuatingsocial injustice. The religious organi-zation also serves as a trusted ve-hicle of contact with existing insti-tutions providing ongoing servicesor emergency assistance.

There are many institutions in thepost-industnal world which providespecific social functions and needs.Many of them have become highlyskilled and efficient at fulfillingthese functions, Some have becomeso specialized that they now are dis-jointed from the neighborhoods with-in which they operate. Religious or-ganizations, while also subject toperversion, are able to focus uponconcern for the whole person and forthe whole community. They are ableto point out needs which are beingignored and catalyze new institu-tions to meet these needs. They areable to delineate injustice being per-petrated by existing structures andthe necessary reformation or replace-ment of institutions to eliminate thisinjustice. The assurance of socialjustice is one essential function ofrevitalized neighborhood religiousorganizations.

A second function is the proclama-tion of a witnessing love. The wit-ness to the concern of neighbors forone another as persons is crucial tomaintaining the breadth and depth ofa community that is fully human.Witnessing love is the proclamationof the profound worth of each neigh-

NEIGHBORHOOD RELIGIOUSORGANIZATIONS

by Fred Hess

45

borhood resident, Affirming thevalue of another's uniqueness, quiteapart from his or her accomplish-ments or failures, is the ultimate ex-pression of care and concern. Theultimate value of each resident is thefoundation of ethical relationshipsand the concern for social justice.Traditional religious organizationsoften have expressed this sense ofinfinite personal worth as "beingloved of God."

In Fifth City, community resi-dents spoke of the sense of victimi-zation among ghetto blacks thatundercut convictions of self-worth;they called it the "nigger image." Aslong as a person thought of himselfas a nigger, he was defeated beforehe ever began any project. This vic-timization is reinforced by the insti-tutionalized injustice of a prejudicialand biased society, but its chief im-pact is in undermining an individual'ssense of his own human dignity. Theuse of songs and rituals ("Black isBeautiful") which encourage the re-covery of pride in one's own race is aproclamation of witnessing love.Conducting seminars and presentingplays on the glories of the black heri-tage allowed residents to recreatetheir own personal mythology and re,leased them from the victim image ofracial self-depreciation. Witnessinglove presents to each neighborhoodresident an affirmation of hsltherunique value and thereby requires ofthat individual a decision to appropri-ate his or her own personal worth.

Witnessing love does not under-estimate the significance of the so-cial structures of injustice whichunfairly constrain individuals andclasses of people. It addresses thepersonal debilitation which resultsfrom the internalization of such vic-timization. It may be a racial victi.mization, as in Fifth City. or a senseof general powerlessness in the faceof bureaucratism, or a rigid tradi-tionalism that resists all change, or afatalism that disparages ail self-starting efforts. Witnessing love isthe proclamation of personal signifi-cance that restores human dignityand' reempowers individuals tochange social conditions.

In the recovering of a sense of self-hood, the profound dimensions ofhuman living are opened for exami-nation. Being made aware of themysteriousness of life, that every-thing is not "cut and dried," thatnot all situations have concrete ex-planations, reawakens the sense ofawe in man. Self-consciousness al-lows a person to transcend the im-mediacy of unreflective responseswhile appreciating the richness ofhis emotional involvements. Libera'tion from self-depreciating victimimages enhances the freedom of indi-

viduas responsibility which maytranscend self-will into a profoundsense of care for the world, others,and oneself. The sense of fullness ex-perienced in such living transcendssuccess or failure is particular ven-tures, transcends skepticism, cyni-cism, and utopian optimism in theawareness that one's significance isguarenteed, quite apart from his ac-complishments and shortcomings. Asecond essential function of neigh-borhood religious organizations isthe proclamation of a witnessinglove that invites all neighborhoodresidents to profound human living.Most non-religious neighborhood or-ganizations see this function as be-ing beyond the scope of their compe-tance.

The third function of revitalizedreligious organizations is to providea celebrational focus for the com-munity. There are several levels atwhich celebration is of crucial signi-ficance. In individual lives, the greatmoments of passage from one phaseor condition of life into another re-quire 'markmig events" which allowindividuals and their neighbors tostand present to the importance ofthose moments: birth, death, theachievement of responsible maturity,the creation of a family. It is unfor'tunate that the traditional rites ofpassage have not always keptabreast of changing social conditions.Getting a driver's license or a schooldiploma are more powerful symbolsof achieving maturity today thanconfirmation. But baptisms and ded-ications, weddings, and funerals stillmark these passages as of specialsignificance and are occasions forspecial reflection about the humancondition, both for the individualsdirectly involved and the larger com-munity.

The life of the community as awhole also must be symbolized. Fora neighborhood to be a fulfillingplace in which to live, it must havesome way to celebrate itself as ahuman community. In Fifth City,periodic community festivals wereheld to rejoice in being the uniquesettlement that lived together withinthose several blocks on the WestSide, The festivals brought neighborstogether in mutual affirmation. Theycreated community out of proximity.Sometimes they focused on FifthCity's uniqueness, sometimes on herrole in the Chicago metropolitanarea. sometimes on her participationin the national identity as celebratedon special holidays like the 4th ofJuly, and sometimes on the pluralityof cultures which make up the globalvillage. At other times the commu-nity's celebrations were in keepingwith the great holy moments of thespecific traditions of the various re-

ligious organizations. Each of thesecelebrations was a rehearsal of thesignificance of living in this coi-mimity, with its relational ties to therest of the world, and of the annualpatterns and life phases of human ex-istence. Without this celebrativefocus, living loses its significance, becomes bland and impotent, and merecontinued existence masquerades asvibrant life.

The fourth function of revitalizedreligious organizations is the train-ing of its members in the relevantlife skills and methods for effectiveliving in their community. Urban lifeskills are dramatically different fromrural ones. Literacy and basic com-putational skills are essential to effec-tive urban living, but so are theskills necessary to use urban com-munications and transportation fa-cilities, to interview for jobs andservices, to deal with representativesof the major business and govern-mental bureaucracies: receptionists,employers, supervisors, bankers, po-lice, welfare workers, inspectors,nurses, etc. Living in pluralistic ur-ban neighborhoods also requires acapacity to understand, appreciate,and manipulate the diversity of cul-tures, life styles, and ideas thatmake up the cosmopolitan commun-ity. Living in the urban world re-quires a balanced interrelationshipof diverse peoples.

In Fifth City. basic skills pro-grams were introduced for personsof all ages: preschoolers, after schoolprograms, General Education Diplo-ma training, adult education semi-nars, and elders courses. Some ofthese programs, like G.E.D. training,were specifically oriented to offsetinadequacies of existing institutionaltraining. Other programs were moregeneral in purpose and focused onmore competant citizenship, not topromote nationalistic fervor but toassure effective participation inshaping the community's destinyand affecting its daily life. Thestudy. training, and informal appren-ticeships necessary to effectivelyenact all of the foregoing functionsalso were included.

The fifth function of revitalized re-ligious organizations is sustainingthe common life of the communityand of the organization itself. Neigh-borhood religious organizations mustbe able to sustain their own mem-bers in their service to the com-munity. An over-concern for theirown membership led many such or-ganizations to demand more andmore service to their own institu-tional forms, leaving their membersless and less time to serve the com-munity. Competition for the loyaltyof community residents led to divi-siveness among the religious organi-

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zations of many neighborhoods. In afunctional reversal, the communitieswere seen as providers of strengthand resources for the institutionsrather than the religious organiza-tions seeing themselves as agents inthe community with peculiarly valu-able functions to fulfill. The servantbecame the served.

But in overcoming the perversion.the genuine function of sustainingthose who would serve a communitycannot be neglected. Social reformerswithout such sustenance quicklyburn out.

PLANNING, ACCOUNTABILITYAND ABSOLUTION

Sustaining the common life entailscommon planning, accountability,and absolution. If an organization isto serve its community, if peoplefrom across the community are towork together, there must be com-mon planning. Every member, everyresident, must be able to get his in-sights into the planning process, andsense that his contribution has hadeffect. He need not always get hisway: .in a pluralistic community.unanimity is more than can be ex-pected. Universal input, common de-liberation, and agreed-upen actionare essential to sustaining long termparticipation. Beyond that, individ-uals must be accountable in theirefforts on behalf of the organizationor community. And the organiza-tions must be accountable for theircorporate plans and actions. Primar-ily this means standing before theactual results of one's actions, ac-cepting responsibility for them with-out justifying them on the basis ofgood intentions or deluding oneselfand others about the actual effects.It is only such reality-consciousnesswhich will provide an adequate foun-dation for future planning and action.But with accountability must beabsolution. Unrelieved guilt can beas defeating as illusion-based plan-ning. Absolution is the proclamationof the significance and worth of theindividuals involved in accountabil-ity: it transcends their actions. It isa "nevertheless" affirmation thatrecognizes the real situation, as it is.without window dressing, and stillaffirms the significance of all parti-cipants.

In Fifth City this dynamic of com-mon planning, accountability. andabsolution was incorporated at vari-ous levels of the community process.The whole community was involvedin building the initiating projectmodel and in two major alterationsof the design over a fifteen yearperiod. Annual and quarterly Com-munity Congresses reviewed the ef.forts of the community, celebratedthe accomplishments, and set objec-

tives and priorities for the nextperiod. Quarterly and weekly evalua-tion and planning characterized eachof the guilds, agencies, institutionsand groups within the communityproject The experimental religiouscommunity which was catalyzing theproject followed the same procedures. Sustaining the common life ofthe community is a crucial functionof a revitalized religious organizationin a neighborhood.

NEEDED STRUCTURESThe Fifth City experience suggests

that these five functions are essen-tial to a revitalized community. Theyare functions which historically havebeen provided by religious organiza-tions. These organizations areuniquely capable of enacting all fivefunctions. But functions are onlysystematically embodied when struc-tural elements are in place. In FifthCity these structures were designedalong lines consensed upon in thestrategic development model: thiswas the model built to attack theanalysis of the community's prob-lems.

Guilds were formed around eachmajor problem arena: economic. edu-cation, symbol, style, and political.These guilds were groups of neigh-borhood residents which met everyother Tuesday night. Each guildplanned tactics to carry out the partof the model in their arena. Theguilds met together at the end ofeach meeting night to share and co-ordinate plans. Each guild could callupon any resident of the communityto help carry out its plans. For largeevents, like a community festival.hundreds of people would be in-volved in some aspect of organiza-tion, set-up, staffing. or clean-up, butthe primary implementing responsi-bility usually lay with the guildmembers themselves. As specific,on-going institutions were estab-Ushed, such as the Housing Redevel-opment Corporation, and took onfull-time staff, the guilds acted aspoints of accountability and over-sight while continuing direct actionin other arenas.

Stakes were created as a networkof mutual care and concern for eachindividual in the neighborhood. Thecommunity was geographically di-vided into five areas. Each area wasdivided into four "quads" and eachof these were divided into units often residents each. Volunteers wereassigned responsibility for each unitin Fifth City. They came to know allof the residents in their unit, andwhat their needs were. They knewwho was looking for work and whowas having trouble getting a land-lord to maintain his building. Whencommunity-wide innoculation pro-

grams, or blood testing for leadpoisoning from lead-based paint(when flaking paint was swallowed byyoung children) were to be availablein the community, they knew whichchildren had been treated and whichhad not. They were available when-ever a crisis arose as a first line ofassistance Stake meetings, of all unitvolunteers and other residents, werneheld in each stake on the Tuesdayswhen the Guilds were not meeting.The stakes considered common prob-lems of personal care in the commun-ity and served as a gathering pointfor data on problems which the non-geographically based guilds mightaddress. Later, block clubs, withtheir beautification and street-com-munity emphases. were merged intothe stake programs.

The stakes and guilds were themajor organizational structures forrevitalized care of Fifth City. Out oftheir work came regular communityfestivals, occasions of worship bythe whole coummnity, and celebra-tions of significant rites of passage,such as Preschool and High Schoolgraduations or funerals of loyalneighborhood residents. These cele-brations gave expression to the de-veloping community mythology, rituals, and symbols. The guilds con-ducted regular seminars and othertraining programs. A weekly, quar-terly, and annual rhythm of evalua-tion became an established part ofthe community calendar. It is a setof structural transformations, or cre-ations, such as these, which marksrevitalized religious organizations.

CREATING REVITALIZED RELIGIOUSORGANIZATIONS

How do such organizations emergein revitalized neighborhoods? Insome respects, the approach of theEcumenical Institute is the easiest:the establishment of an entirely neworganization. However, new organi-zations often emphasize one or an-other of these functions., to the detri-ment of the others, and so becometraining institutes or social serviceagencies or community developmentcorporations. These specialized insti-tutions are also required in revital-ized neighborhoods and are high-lighted in other papers in this series.The fulfillment of all five of thesefunctions at once is an identifyingmark of a revitalized religious orga-nization..The other primary approach is the

transformation of a traditional reli-gious organization: congregation,parish, temple, or synagogue. How-ever, due to doctrinal prejudice orpreoccupation, and institutional for-malism or traditionalism, such atransformation is exceedingly diffi-cult to accomplish.

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It req.uires a careful analysis of upon a frontal assault on irrelevant They will not be imposed by bureau-the current organizational structure or marginal practices. Finally, em- cratic fiat or reorganization. Theyby those who would catalyze such phasis should be placed upon estab- are the result of new institutionalchange. In such an analysis, function lishing pilot demonstrations of re- forms that fit new roles in a particu-must be given precedence over the vitalized religious organizations that iar neighborhood, not the uniformparticulanties of traditional manifes- are relevantly and effectively serve adoption of supposedly relevant in-tation: the communication of per- ing their particular neighborhoods, stitutional structures. Only when re-sonal worth and value may be ac- rather than upon securing tradition- vitalized neighborhoods appear, withcomplished in a wide diversity of wide or denomination-wide institu- the whole gamut of new institutionaldoctrinal formulations. A strategic tional reorganization Revitalized re- forms, including revitalized religiousplan of transformation must be de- ligious organizations must be estab- organizations, will we begin to dis-signed which focuses upon filing in lshed by the efforts of local people cover the appropriate integratingthe missing functions rather than seeking to serve their community. factors, and see the unique contribu-tions of each.

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[Excerpts from a pamphlet entitled "National Neighborhood Platform" I]

DEVELOPMENT OF THE NATIONAL NEIGHBORHOOD PLATFORM

In November 1978, at the National Association of Neighborhoods' EighthNational Meeting in Hartford, Connecticut, member neighborhood organizationsfrom around the country recognized the need for a public policy agenda for andby neighborhoods. At this meeting the groundwork was laid for a nation-wideseries of local Neighborhood Platform Conventions culminating in a NationalNeighborhood Platform Convention to be held in November 1979. This was thebeginning of the National Neighborhood Platform Campaign.

A Director of the Platform Campaign was hired early in 1979 to coordinateand support the efforts of N.A.N. leaders and members in the Campaign process.Regional organizers were assigned to various sections of the country to provideencouragement and assistance to sponsors of local Conventions.

During 1979, nearly 50 local Neighborhood Platform Conventions were heldaround the country. These local Conventions served two valuable purposes. Theproduction of each local Platform Convention allowed a variety of neighborhoodgroups to come together to share ideas, to exchange information, and to devisecommon solutions for their problems. In many cities, this effort established orstrengthened an effective city-wide coalition of neighborhood organizations. LocalPlatforms will serve as action agendas for these coalitions in the coming years.Each is a comprehensive statement of neighborhood beliefs, designed for policyinput at neighborhood, ward city, county and state levels of government.

Equally as important, these local Platform Conventions served as the basisof the National Platform Convention. Participants in the local Conventionselected delegates to represent them at the National Neighborhood PlatformConvention. The resolutions of the local Conventions were compiled to producean impressive document of resolutions regarding neighborhood government,public safety, housing, employment, economic development, our environment,transportation, education, rural development and human rights. The NationalNeighborhood Platform was based upon these resolutions.

Seven hundred N.A.N. members, local Convention delegates, and other neigh-borhood advocates convened in Louisville, Kentucky from November 9-11, 1979to develop the National Neighborhood Platform. They met in twenty issuecommittees to draft resolutions. Additional resolutions were added by petition,and then all resolutions were voted upon by the delegates as a whole. The resultof this monumental, year-long effort is the National Neighborhood Platform-theneighborhoods' agenda for the 1980's.

The National Neighborhood Platform

PREAMBLE

Two centuries ago, our nation was founded on the proposition that all peopleare created equal and are endowed with the inalienable rights to life, liberty, andthe pursuit of happiness. Governments are properly instituted among people tosecure these rights. While the world has changed, our faith in this propositionremains unchanged.

As our ancestors fashioned institutions to secure and enhance their rights, sodo we. As our ancestors sought to form a more perfect union, establish justiceand secure the blessings of liberty, so do we. As successive generations havesacrificed much in order to give new birth to freedom and to guarantee thatgovernment of the people, by the people, and for the people shall not perish,so shall we.

In the two centuries since our founding, our institutions have grown too largeand too remote to allow us to meet face-to-face to seek the common good. Thus,many Americans have withdrawn into apathy or have been overwhelmed byforces too powerful for any individual to withstand.

In response, we now turn to our neighborhoods and communities to fulfill ourhuman capacities as citizens by participating in making those decisions whichdirectly affect our lives. Rediscovering citizenship in our neighborhoods, wereaffirm the principles of freedom, justice, and equality upon which our nationwas founded. We believe that those who are affected by the decisions of govern-

1 Written and adopted by the N.A.N. National Neighborhood Platform Convention,Nov. 11. 1979.

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ment must be consulted by those who govern; that it is the right of citizens tohave access to the instruments of power; and that it is their duty to learn to usethem effectively and wisely.

We reaffirm our belief in the N.A.N. Neighborhood Bill of Responsibilities andRights which we adopted in 1976 when we declared that governments and privateinstitutions must recognize:

The right of neighborhoods to determine their own goals, consistent with thebroad civic ideals of justice and human equality;

The right of neighborhoods to define their own governing structures, operatingprocedures, names and boundaries;

The right of democratically organized neighborhoods to receive a just shareof private and public resources necessary for the implementation and supportof neighborhood decisions;

The right of democratically organized neighborhoods to review in advance anddecisively influence all stages of planning and implementation of all actions ofgovernment and private institutions affecting the neighborhood; andThe right of neighborhoods to information necessary to carry out these rights.Rediscovering democracy, we join with neighbors in communities across ourland to create a neighborhood movement built upon the belief that people canand should govern themselves democratically and justly. The neighborhood is apolitical unit which makes this possible; since the smallness of the neighborhoodenables all residents to deliberate, decide, and act together for the common good.We share our neighborhoods with individuals and families of diverse needs,

interests, backgrounds, and beliefs. We cooperate and work with the labor move-ment, church groups, and all other groups with whom we share common goals.The full humanity of every person must be affirmed in our neighborhoods. There-fore, we continue our determined opposition to every form of racism, classism, orsexism. Justice is only possible when neighbors, in their collective decisions,respect their diversity and their interdependence with other neighborhoods.

People organized in neighborhoods, responding to their fellow residents as humanbeings and families, rather than as clients, are best able to provide needed services.People organized in neighborhoods are best able to pronounce and amplify infirm tones the voice of citizens so as to command the respect of government andprivate institutions. People organized in neighborhood assemblies are best ableto create government under their control.The key problem addressed by our National Neighborhood Platform is theproblem of displacement. By displacement we mean the calculated efforts oflarge corporations, banks, real estate and utility contracts with the cooperationof the federal government, to bring about the wholesale racial and economicresegregation of the cities of this country, both large and small. This displace-ment of our people from the neighborhoods includes the processes of gentrificationas well as disinvestment and destruction of basic community institutions, publicfacilities and educational facilities. Our national program calls for ways andmeans to stabilize communities, provide and maintain low and moderate incomehousing, provide community control of the economic and community developmentprocesses and provide accountability of corportions which are investing anddisvesting in our cities. Our Platfoim is a program that addresses the most crucialissue in our nation: Will this country be developed for the majority of the people,or the few?This Platform which we have set for ourselves shall not be soon accomplished.But we, the people of America's neighborhoods and communities, seek by itsdeclaration to turn our country in a new direction. We seek to restore a senseof trust and mutuality in public life, to open up our government to citizenparticipation, to unleash the power of people deciding together theii own future.Many institutions will have to change, many policies will have to be revised,many actions are yet to be taken, but nothing is so powerful as the ideal of free-dom, justice, and equality when its time has come, and when the people areprepared to sacrifice to make it prevail.

We do declare that it is the will of the people residing in America's neighbor-hoods that these actions be taken. We do declare that they are just, and representthe counsel of reason, as well as the support of numbers. We mutually pledge toeach other unremitting effort to enact this Platform and to bring, once again, arebirth of freedom and democracy to our land. Recognizing that many pastdecisions by government and private institutions have not been in the commoninterest of all Americans, and secure in our faith that citizens will participate in

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governing their neighborhoods if given the power and authority to do so, we declarethat it seems best to the people residing in Amefica's neighborhoods that thefollowing actions be taken to empower neighborhood organizations, promote neigh-borhood government and ensure citizen participation, secure public safety, providephysical improvements to our neighborhoods, ensure employment and economicdevelopment, maintain a pure environment, provide adequate transportation andeducation, develop rural areas, and protect the human rights of all who live in ourneighborhoods.

EMPOWERING NEIGHBORHOODS

We believe that by meeting together in our own communities and by empoweringneighborhood organizations, we can take our destiny into our own hands. Thefollowing are necessary if neighborhood organizations and governments are toachieve increased citizen responsibility, justice, and equality in our neighborhoodsand in our nation.

Neighborhood organizations and governments must have adequate and directfunding from both public and private sources.

Neighborhood organizations and governments must have adequate technicalassistance.

Neighborhood organizations and governments must have access to all informa-tion necessary to carry out their programs and activities, obtained through stateand local "freedom of information" acts, if necessary.

NEIGHBORHOOD GOVERNMENT

Our government jurisdictions have become so large, distant and unresponsiveto peoples' lives and concerns that our communities are now, to a serious degree,ungoverned. Administrative neglect and private actions have endangered thesafety and justice of our communities. We believe it is the responsibility ofcitizens in our democratic republic to govern the affairs of their own neighborhoodcommunities in common deliberation, with binding jurisdictional power, andin constitutional relationship to other communities.

We propose that neighborhood residents be empowered to define their owngeographic boundries and establish directly elected or representative neighborhoodgovernment which must then be recognized by city and state governments,endowed with legal status and public powers, and supported by tax revenues.

We propose that the federal government not distribute any revenue-sharingor block grant funds to states which do not provide enabling legislation forestablishing neighborhood governments or to local authorities which refuse torecognize duly established neighborhood governments.

We propose that duly established neighborhood governments have at leastthe following powers:

A. The ability to raise tax revenues.B. The ability to incur bond indebtedness.C. The ability to enter into interjurisdictional agreements.D. The ability to settle neighborhood disputes.E. The ability to contract with City or with private providers of services.F. The ability to conduct elections.G. The ability to sue or be sued.H. The ability to determine planning, zoning and land use.I. The ability to excercise limited eminent domain.J. The ability to undertake public investment.K. The ability to provide public and social services.L. The ability to operate enterprises.

CITIZEN PARTICIPATION THROUGH NEIGHBORHOOD ORGANIZATION

We believe that government should provide for citizens' maximum authorityover decisions that affect them, through the vehicle of neighborhood organizations,and toward the particular goal of ending racial inequality.

We propose that local governments should be restructured to empower neigh-borhoods to exercise maximum authority over decisions affecting them, consistentwlth the goal of ending racial segregation. Since federal programs designed toassist neighborhoods have frequently been administered without the involvementof neighborhood residents and without regard to their needs, to secure rights ofmaximum authority the following steps must be taken:

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A. Elected neighborhood representatives must be given a policy voice in alldecisions regarding federal funds in the neighborhood.

B. Neighborhood organizations must have the ability to prepared and presenta neighborhood development plan to guide all federal, revenue-sharing and eco-nomic development expenditures in the neighborhood.

C. Neighborhocd organizations must have the ability to obtain legal counsel tocontest federal expenditures.

D. Independently funded and staffed neighborhood organizations must havethe ability to monitor program operation and government financial expendituresin their neighborhoods.

E. Neighborhood organizations must have franking privileges.We propose that neighborhood organizations actively encourage non-partisan

voter registration, voter education and voter turn-out.We propose that all policy-making boards and forums of local and state gov-

ernment be made up of representatives from the neighborhoods, elected by thepeople in non-partisan elections. Terms must be staggered and equitably representaffirmative action concerns, the elderly and disabled.

We propose that full Congressional voting rights be granted to the District ofColumbia.

VOLUNTEERISM

The quality and freedom of community life require deep and widely sharedvoluntary citizen action and commitment by neighborhood residents. The ac-tivities of volunteers in neighborhood organizations should be increased andstrongly supported by the public and private sectors.

We believe that the efforts of individual volunteers should be supported byproviding them with leadership, skill and policy development training at theneighborhood level.

We believe that youth should be involved in decision-making at the neighbor-hood level, and propose that such methods as school credit, leadership develop-ment, vocational internships and stipends be developed for their participationin neighborhood organizations.

We propose that volunteers serving with non-profit neighborhood organizationsbe allowed to declare allowable, non-reimbursed out-of-pocket costs for incometax purposes, or to receive a direct stipend.

We propose that HR 4209 be passed, giving now ineligible neighborhood andcommunity organizations the ability to use bulk mailing rates.

We propose that the federal government increase its financial support of theACTION Agency for the VISTA (Volunteers in Service to America) and RSVP(Retired Senior Volunteer Program) programs.

SOCIAL SERVICE DELIVERY

Certain social services must be provided to the residents of our neighborhoods,and the provision of these social services must promote self-sufficiency, notdependency. Neighborhood organizations are best equiped to identify and providethe social service needs of residents in a way that enhances their human dignity.

We propose that, in order to promotote self-sufficiency, public funding mustbe made directly available to neighborhood organizations to plan, deliver, monitorand evaluate social service programs in the neighborhood and that such programsmust be based in the neighborhood.

We believe that child care is a right, not a privilege. To promote this right,neighborhood organizations must run community child care programs, includingday and night care (up to 17 years), recreation, job training, supplementaryeducation and family support services. To implement and administer fundingto such programs, state-wide boards (with equal representation from neighborhoodresidents, child care workers and parents) should be elected from the neighborhood.They should be empowered to develop, review, change and enforce regulationsfor all child care programs.

We believe that comprehensive physical and mental health care are basic rights.We believe that health care as a profit-oriented business will never meet the

needs of the people and oppose the destruction of public health care in the innercity as a part of a corporate and government policy of deliberate dislocationand genocide.

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We propose that neighborhood-based and community-controlled comprehensivehealth-care facilities be established and emphasize preventive health care andhealth education. All neighborhood residents should have access to such facilitiesin their neighborhoods.

We believe that the developmentof community-based and controlled supportsystems for de-institutionalized persons must be encouraged, and that educationprograms must be established to promote community acceptance of such persons.

DISPLACEMENT

Human beings are injured by forced removal from their communities. Housingand residential stability are essential to human dignity and well-being. Neighbor-hood organizations must defend their residents against displacement.

We believe that people have a right to housing and residential stability and thatneighborhood residents must maintain control of the neighborhood to ensure thisright.

We believe that neighborhood organizations must form active partnershipswith federal, state and local governments and the private sector to preserve andrestore existing, structurally sound, housing stock.

We propose that, for those individually and collectively agreeing to be displaced,the public or private sources of displacement must provide resident-approvedrelocation schemes. These must include equal or improved replacement housing,an equal or improved social and economic environment, and relocation funds.

We propose that developers in a neighborhood be required to reserve adequatenew development units for original residents, including tenants.

We propose that public funds avoid displacement and support the maintenanceand development of economically, racially and ethnically diverse neighborhoodsthrough the following means:

A. Conversion of tenants to homeowners.B. Strengthening of the Uniform Relocation Act.C. Making 80 percent of homesteading, mortgage subsidies and low interest

improvement loans available to low income and poor people.D. Making the allocation of federal funds to local governments dependent

upon the existence of local antidisplacement plans which independent neighbor-hood organizations must help develop, implement and monitor.

E. Expansion of state and federal programs for minor home repairs for elderlyhomeowners.

We believe that the government and private sectors should aggressively supportneighborhood organization antidisplacement strategies such as community devel-opment corporations, community credit unions, land-banking, neighborhoodplanning, and neighborhood housing counseling.

We propose that the following steps be taken by local and federal government(as appropriate) in order to avoid displacement due to condominium conversion:

A. Consent of 75 percent of tenants be required to convert multifamily rentalunits to condominiums, cooperatives or hotels.

B. Lifetime tenancy to be guaranteed to senior citizens and families withincomes of $20,000/year or less.

C. Establishment or enforcement of the tenants' "first right of refusal."D. Promotion of cooperative housing.E. Strengthening of disclosure requirements on ownership, financing and

third party contractual agreements.We propose that tenants be guaranteed the first option to purchase their

homes from their landlords, and that they receive sufficient technical assistanceand private funds to exercise this right.

We propose that anti-speculation taxes be adopted to tax windfall profits onall residential and commercial property sales by non-resident owners (in caseswhere resale takes place in under five years and without significant rehabilitation).Funds so generated should be used to provide property tax relief to low andmoderate income people (where legislation mandates such relief) or put into com-munity-based cooperative funds.

We propose a moratorium on the use of "eminent domain" by public andnon-public bodies unless 75 percent of the residents of the affected area agreeto the proposed activity.

Representative REUSS. Mr. Landers, please proceed.

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STATEMENT OF JODY LANDERS, EXECUTIVE DIRECTOR, HARBELCOMMUNITY ORGANIZATION, BALTIMORE, MD.

Mr. LANDERS. Thank you very much. My name is Jody Landers andI'm executive director of the Harbel Community Organization whichis located in the northeast corner of Baltimore. I welcome the oppor-tunity to testify before the committee, but I wouldn't be honest if Idid not tell you that I and my organization are somewhat skeptical ofthe good it will do, because it seems that all the myriad positive accom-plishments and needs of neighborhoods can be relegated to obscurityin an instant in the face of a few bad examples of poorly managedprograms or when national political winds shift direction, which theyseem to do frequently.

The other fault that we find with the Federal approach to neighbor-hoods is that there seems to be a propensity to focus on larger andmore glamorous problems while many of the nitty-gritty problems arepassed off as trivial.

Now that I've made my confession, let me tell you a little bit aboutmy organization and I will also mention a few areas where I think theFederal Government can be helpful in terms of supporting neighbor-hoods and being supportive of neighborhoods.

Harbel is a volunteer, private, nonprofit, 501 (c) (3) organization. Weare composed of about 80 member organizations. Roughly, a third ofthem are small neighborhood improvement associations, a third arechurch organizations of all denominations, and a third are miscel-laneous PTA's, fraternal clubs, and service organizations. All havejoined together in the past 10 years to work for the betterment of ourcommunity.

It's a community of about 100,000 people. It is predominantly amiddle-income area of about 30,000 households and we boast about an80-percent home owner occupancy rate. To give you an idea of thekind of a community it is, I was raised in the community. My wife wasraised in the community, and we bought a house 1 mile away from ourparents' house and we are raising our family there, as are our brothersand sisters; that is not uncommon for many of the families and peoplein our neighborhoods. Also, because of the stability in the neighbor-hood, we tend to have a larger than average share of retired persons inthe area, people who stay in the community in their homes throughouttheir lives.

Harbel began on a $30,000-a-year budget put up entirely by thecommunity, with the primary focus on community advocacy, andtoday, 51 years later, we have grown into a multifunctional organiza-tion with a total annual budget approaching about $800,000 andresponsibility for providing local community mental health services,drug abuse prevention services, youth employment services, educa-tional and job training services, information and referral, and manymore, all under the control of the community and our large, broad-based board of directors.

We have been involved over the years in keeping schools open andfighting for quality education. We have helped to start eight neighbor-hood associations where none bad existed. We have gotten two smallbusiness associations off the ground in our area. We have worked on

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cleaning up the local stream in our community to the point where, inthe past 2 years, the Maryland Fisheries Administration has actuallybeen able to stock it with trout. They don't live long but-no, I'mjust kidding-the trout live until the water flow gets too low, but I'mjust saying, it's a testimony to what neighborhoods can do whenthey join together.

We have also won a number of major zoning battles in our communityprotecting the integrity of the residential area from commercial intru-sion. We are located in a city-owned multicenter which, incidentally,was developed using EDA funds jointly with our organization and thecity of Baltimore. The building was built entirely with trainees, mostof them came from our area, and, well, you have to see it to appreciateit, it's a beautiful building. The roof leaked a little when it was com-pleted, but we've gotten that straightened out.

Our 3,000 people a month enter out doors to seek and receive somesort of service or assistance. Because of our direct ties to the community,many volunteers are involved in the direct provision of service and,of course, this helps to keep the cost of the service low and providesfor much better quality of service.

The close and constant oversight provided by the community assuresthat our dollars are being used wisely, and I think this is an importantpoint; that only the services which the residents deem essential areprovided. We are not into frills. We are into using the resources thatare available to use wisely and getting the most out of the dollar.

This past winter, over 700 senior citizens received help through ourcenter with applying for energy assistance. You know these are folkswho, again, had worked their whole lives and are finding that- it'svery difficult to stay in their homes and support themselves. Withoutthis assistance, it's very questionable as to whether some of themwould be able to remain in their homes.

Every summer for the past few years, with the aid of the youthsummer job funds, we have organized and coordinated many neigh-borhood-based improvement projects employing hundreds of areayouths, and here's a program where not only are the youth benefitingby the direct employment experience but we are doing concrete thingsin the community. We are improving the parks. We are cleaning upvacant lots. We are doing things that would not have been doneotherwise. We are improving the quality of life in the neighborhoodand helping to maintain it.

Now it seems that with hardly a second look or any real evaluationas to the effectiveness of these programs, many of them which havebenefited neighborhoods directly will be abruptly halted or curtailed.While we have faced challenges in the past and I think we can cer-tainly face this one, we cannot do it without some help. I would urgethe Congress and this committee not to pull out the plug before pro-viding us some means of support-a lifesaver or a liferaft, if you will.

And what am I talking about when I'm saying that? If we areexpected to take on a larger role, if Government dollars are going todiminish, then we need some help in raising dollars on our own, andyet the trend is abysmal in terms of support for voluntary agencieslike mine with respect to the Tax Code.

What tends to happen is that more and more people go to the stand-ard deduction and the trend within the IRS code is to go that direc-

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tion, to have more and more people take the standard deduction,when study after study and poll after poll have shown that peoplewill give more if the tax incentive is there; and the difference isphenomenal. The folks who itemize their deductions will give abouttwo-thirds more in terms of charitable contributions than those whodo not.

So what I'm advocating for is to allow for charitable contributionsand contributions to neighborhood organizations to be deductibleeven if one is using the short form, or not itemizing their deductions.

The other thing that I wculd urge is that folks who are involvedin voluntary neighborhood service be given the same kind of mileageincentive or mileage deduction that anybody in business gets. Theirony of it is, I'm employed as a paid person, so I'm allowed to de-duct the full amount for my transportation here. But if the volunteerpresident of my organization drove down, a mother of seven, shecouldn't take that deduction. She would only get 8 or 9 cents to themile. It's crazy-it doesn't promote citizen participation.

Another thing: Help us communicate. Communication is a bigpart of what we do and I think if the neighborhoods are really goingto hang together over the next few years, wve really need to improveour communication channels, and I brought along an excerpt of theU.S. Postal Regulations governing Harbel which is sort of an in-dication to you of how neighborhoods really are viewed. They lackan identity within the Federal Government and there are regulationsproposed which totally overlook neighborhoods as a viable entity.I don't know if you have this in front of you, but I would like it ifsomeone-anyone in this room-could tell me what is intended bythis regulation.

This is the postal regulation with respect to the special third-classmailing rates. Now everything that I read in this seems to indicatethat Congress intended that neighborhood organizations should beentitled to the special third-class rates. You read about the standardprimary purpose of organizations, which in terms of their activitiesthe neighborhood organizations seem to qualify. When you looktinder philanthropic and charitable, it talks about purposes beneficialto the public, and here let me read some of the wording right fromthe regulations:. . . that organizations might qualify if they lessen the burdens of government,if they promote social welfare designed to accomplish any social welfare purposes,if they lessen neighborhood tensions, if they work to eliminate prejudice anddiscrimination, if they work to combat community deterioration and juveniledelinquency.

All of these things are what neighborhood associations are about.The regulations seem to allow that an organization carrying out itspurpose can advocate for social or civic change and that doesn'tnecessarily disqualify it from being eligible for special bulk mailingrates. So far, so good.

However, with all the flowery language and definition which seemsto be talking about neighborhood organizations, there's a "Catch-22.22In a simple statement, examples of organizations or associations thatmay not qualify, there's this clause: "Citizens and civic improvementassociations," and for those five words, most of our neighborhoodassociations have been denied the right to mail out under the specialthird class bulk mailing rates.

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Now what does this mean practically? While they are eligible for theregular bulk mailing rates, the difference would mean being able toreach between 236 and 3 times the number of households with theirnewsletters and with their agendas for their meetings.

So it is significant and, again, I raise this as a specific issue becauseI think it can benefit neighborhoods, but I think it's a dramatic exam-ple of how we're sort of caught up in a lot of double-talk when it comesto the Federal Government and its approach to neighborhood organi-zations and support for the survival of neighborhood organizations.

That's all I have unless there's any questions.Representative REUSS. Thank you very much. We will return to

you in just a moment.[The excerpt referred to by Mr. Landers follows:]

EXCERPT FROM U.S. POSTAL REGULATIONS GOVERNING ORGANIZATIONS SUCHAS HARBEL COMMUNITY ORGANIZATION

[Footnotes are annotations of Mr. Landers pointing to problem sections]

134.5 QUALIFICATION REQUIREMENTS AND APPLICATION PROCEDURE FOR SPECIALTHIRD-CLASS RATES

.51 Kinds of Organizations or Associations that may qualify'Only the following organizations or associations net organized for profit, none

of the net income of which benefits any private stockholder or individual, may beauthorized to mail pieces at the special rates provided by 134.121 and 134.122:(a) Religious; (b) educational; (c) scientific; (d) philanthropic; (e) agricultural;(f) labor; (g) veterans; (h) fraternal..52 Qualification standards

.521 Primary Purpose 2The standard of primary purpose in these definitions shall require that the

organization be both organized for and operated for the primary purpose. Organi-zations which incidentally engage in qualifying activities only to accomplish othergoals do not meet the primary purpose test.

.522 Definitionsa. Religious.-A nonprofit organization whose primary purpose is one of the

following:(1) To conduct religious worship-for example, churches, synagogues, temples,

or mosques;(2) To support the religious activities of nonprofit organizations whose primary

purpose is to conduct religious worship;(3) To perform instruction in, to disseminate information about, or otherwise

to further the teaching of particular religious faiths or tenets.b. Educational.-A nonprofit organization whose primary purpose is: (1) the

instruction or training of the individual for the purpose of improving or developinghis capabilities; or (2) the instruction of the public on subjects beneficial to thecommunity. An organization may be educational even though it advocates aparticular position or viewpoint so long as it presents a sufficiently full and fairexposition of the pertinent facts to permit an individual or the public to form anindependent opinion or conclusion. On the other hand, an organization is noteducational if its principal function is the mere presentation of unsupportedopinion.

The following are examples of organizations which are educational:(1) An organization, such as primary or secondary school, a college, or a pro-

fessional or trade school, which has a regularly scheduled curriculum, a regularfaculty, and a regularly enrolled body of students in attendance at a place wherethe educational activities are regularly carried on;

I Neighborhood associations are "not organized for profit."I In my experience the primary purpose of most neighborhood associations by these

definitions falls under Sec. (d) philanthropic.

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(2) An organization whose activities consist of presenting public discussiongroups, forums, panels, lectures, or other similar programs. Such programs maybe on radio or television

(3) An organization which presents a course of instruction by means of cor-respondence or through the utilization of television cr radio;

(4) Museums, zoos, planetariums, symphony orchestras, and other similarorganizations.

C. Scientific.-A nonprofit organization whose primary purpose is one of thefollowing:

(1) To conduct research in the applied, pure or natural sciences(2) To disseminate systematized technical information dealing with applied,

pure or natural sciences.d. Philanthropic (Charitable).3-A nonprofit organization organized and operated

for purposes beneficial to the public. Examples of philanthropic (charitable) organi-zations are organizations which are organized for:

(1) Relief of the poor and distressed or of the underprivileged;(2) Advancement of religion;(3) Advancement of education or science(4) Erection or maintenance of public buildings, monuments or works;(5) Lessening of the burdens of Government:4(6) Promotion of social welfare by organizations designed to accomplish any of

the above purposes or;(a) to lessen neighborhood tensions;(b) to eliminate prejudice and discrimination;(c) to defend human and civil rights secured by law; or(d) to combat community deterioration and juvenile deliquency.5

The fact that an organization which is organized and operated for the relief ofindigent persons may receive voluntary contributions from the persons intendedto be relieved will not necessarily prevent such organization from being exempt asan organization organized and operated exclusively for charitable purposes. Thefact that an organization in carrying out its primary purpose, advocates social orcivic changes or presents opinion on controversial issues with the intention ofmolding public opinion or creating public sentiment to an acceptance of its viewsdoes not preclude such organization from qualifying so long as it is not an actionorganization as described in 134.53 (a), (b), (c).6 7

e. Agricultural.-A nonprofit organization whose primary purpose is the better-ment of the conditions of those engaged in agricultural pursuits, the improvementof the grade of their products, and the development of a higher degree of efficiencyin agriculture. The organization may further advance agricultural intereststhrough educational activities; the holding of agricultural fairs; the collection anddissemination of information concerning cultivation of the soil and its fruits or theharvesting of marine resources; the rearing, feeding, and management of livestock,poultry, bees, etc., or other activities relating to agricultural interests. The termagricultural also includes any nonprofit organization whose primary purpose is thecollection and dissemination of information or materials relating to agriculturalpursuits.

f. Labor.-A nonprofit organization whose primary purpose is the betterment ofthe conditions of workers. Labor organizations include, but are not linited to,organizations in which employees or workmen participate, whose primary purposeis to deal with employers concerning grievances, labor disputes, wages, hours ofemployment, working conditions, etc. Examples are labor unions and employees'associations formed for the stated purposes.

g. Veterans'.-A nonprofit organization of veterans of the armed services of theUnited States, or an auxiliary unit or society of, or a trust or foundation for, anysuch post or organization.

h. Fraternal.-A nonprofit organization which meets all of the following criteria:(1) Has as its primary purpose the fostering of brotherhood and mutual benefits

among its members;(2) Is organized under a lodge or chapter system with a representative form

of government;

3 Purposes benefilcal to the public.4 Purposes of neighborhood groups that would seem to qualify them for the special rates.

5 Ibid.6 This section seems to expressly leave open the possibility that groups such as neighbor-

hood associations can qualify.7 So far, so good. As you can see there's a lot of language that would seem to qualify

neighborhood associations.

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(3) Follows a ritualistic format; and(4) Is comprised of members who are elected to membership by vote of the

members.Fraternal organizations include such organizations as the Masons, Knights of

Columbus, Elks, college fraternities, and the like. Fraternal organizations do notencompass such organizations as business leagues, professional associations, civicassociations or social clubs.

.53 Examples of Organizations or Associations that may not Qualify 8

The following and similar organizations do not come within the prescribedcategories even though they may be organized on a nonprofit basis: Automobileclubs; business leagues; chambers of commerce; (citizens' and civic improvementassociations); individuals; mutual insurance associations; political organizations;service clubs such as Civitan, Kiwanis, Lions, Optimist, and Rotary; social andhobby clubs; associations of rural electric cooperatives; and trade associations. Ingeneral, state, county, or municipal governments are not eligible for the specialrates. However, a separate and distinct state, county, or municipal governmentalorganization that meets the criteria for any one of the specific categories in 134.522is eligible, notwithstanding its governmental status. For example, school districtsand public libraries may be eligible under 134.522b. Nevertheless, governmentalorganizations will generally not be eligible under 134.522d (philanthropic), sincetheir income is generally not derived primarily from voluntary contributions ordonations..64 Application

.641 FilingApplication on Form 3624. Application to Mail at Special Bulk Third-Class Rates

for Qualified Nonprofit Organizations or Associations, must be filed by the organi-zation or association at the post office where mailings will be deposited. The appli-cation must include evidence that the organization is nonprofit, and, if available,a certificate of exemption from Federal income tax should accompany the applica-tion. An exemption from the payment of Federal income tax is not required inorder to qualify for the special third-class bulk rates I Such exemption will be con-sidered as evidence of qualification for preferred Postal rates but will not be con-trolling in the matter. When an organization submits proof that it has been grantedincome tax exemptions under Title 26, United States Code, section 501(c) (3), as areligious, educational, scientific, or charitable (philanthropic) organization, tindersection 501(e) (5) as an agricultural or labor organization, under section 501 (c) (8)as a fraternal organization, or under section 501(c) (19) as a veterans' organization,it will be considered as qualifying for the special third-class rates unless the avail-able evidence discloses some disqualification.

Representative REuss. Mr. Kotler, please proceed as you wish.

STATEMENT OF MILTON KOTLER, EXECUTIVE DIRECTOR, NA-TIONAL ASSOCIATION OF NEIGHBORHOODS, WASHINGTON,D.C.

Mr. KOTLER. Mr. Chairman and Congressman Richmond, asexcutive director of the National Association of Neighborhoods, I com-mend for your tenacity and courage in holding this hearing on the role,achievements and problems of neighborhood and community-basedorganizations in our cities and our national society.

Thousands of neighborhood organizations, which active and caringcitizens have built over the past 20 years for economic developmentand social service delivery in their immediate communities, are beingdevastated by the current budget cuts and appropriation decisions.Therefore, there is little strength from them for strong praise to men

8 Here's the Catch 22. Even though there's no definition in this section the postal servicehas interpreted this section to exclude neighborhood associations from qualifying for specialrates.

9 Tax exemption is not required, nor does it guarantee qualification.

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like you who insist on taking a good look at their achievements andneeds. Therein lies your tenacity.

We know that our neighborhood development organizations werenot built by citizens alone. Beginning with the Kennedy administra-tion, there was a definite Government policy to encourage the massesof American citizens to participate in the development of their com-munities and the country as a whole. This was a sound commitment tosecure our Republic to the moorings of an active and responsibledemocracy. Mr. Chairman, you have courage to examine some fruitsof that 20-year policy at a time today when so many Members ofCongress would abandon its historical memory to old myths andspeculations.

Other witnesses have been invited to describe the local progress ofneighborhood organizations, and the specific problems of programoperation that they are facing with new cuts of Federal resources.I need not be redundant and highlight still other neighborhood organi-zation achievements around the country, or the damage that they willface when these cuts go into effect.

Instead, I want to make one point of historical reflection. As theperson who organized the first federally supported neighborhooddevelopment corporation in 1964, I want to share with you a reminderof the purpose which members of the community and city and Federalofficials shared in that venture and the hundreds of neighborhooddevelopment corporations that succeeded it.

It was the view of many leaders in different fields of endeavor inthe country at the time of the Kennedy administration that the leader-ship of the United States in the free world required that the countryin fact become a genuine nation with a commonsense of destiny. Mr.Chairman and Congressman Richmond, you remember those ex-tremely difficult efforts in the late fifties-still years of fear andisolationism, to pull the different sections, classes, and races of thissociety together with a valid vision of common purpose. We were stillvery much an old frontier society devoting all of its energies to run-ning from those we disliked, amassing new fortunes for new elites,and building new enmities. That kind of society could not lead afree world of deep traditions, history, education, and culture. A raciallyand socially divided society of haves in place of have nots on the runhad to be shaped as one people working for a future that could beshared in common with the rest of the free world.

The practical idea cited for this aim of building a united people backin the very early sixties was the participation of all people in shapingthe destiny of their local communities and of their country. Thiswould be a process of community and national development in whichpeople of all walks of life could carry responsibilities for the countryand feel at one with it. This was an idea of patriotism for all.

Many vehicles were invented for this process of development andthey reached from new agencies of the Federal Government, throughregional commissions, to new forms of municipal organizations, allthe way down to neighborhood and community based organizations.I want to stress that neighborhood organizations were only the finalgrassroots component of a national system of building a united peoplearound the idea of freedom and participation, which could lead theworld. I may remind you that it was a great struggle to implant neigh-

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borhood organization and development into this new national system.Many experts and leaders preferred a more centralized approach tonational development. Yet after much political debate and organizing,thousands of community-based organizations were in place by themid-seventies to do the very thing that Jody Landers, of the HarbelCommunity Organization in Baltimore, described here today.

We know the tremendous problems of local and national devel-opment over the past 20 years, and I am not here to record that his-tory. That process at best would have taken many more years to root.Many of the different vehicles of decision fought against each other;and many groups, including our own neighborhood and communityorganizations, often misunderstood the mission of community devel-opment. They made the mistake, as human beings do, of thinking thatthe sole purpose of local power and development was communityself-interest. In historical fact, the purpose of local power had to be,primarily, to build the responsibility of every group to share a nationalcommon destiny. Otherwise, national resources for local power couldnot be continued. I would also add these difficulties were periodicallyexacerbated by weakness in national political leadership.

The premise of the 1960's about national unity for world leadershipappears to have fallen. It is obvious that the budget cuts have targetedall the major vehicles of national and community development forelimination or vastly reduced resources-EDA, the regional commis-sions, VISTA, CETA, HUD community development block grants,community-based health programs, and many other programs.

It is up to this Congress to consider the consequences of abandoningthis premise for our own unity and our leadership in the world. Whatwill take its place? And it is up to the neighborhood organizations whohave shared this premise, as the substance of their deepest obligationto the Nation, to point to the danger of this abandonment of history;and reiterate our firm intention not to be shoved out of this Nationby any new or old narrow view of patriotism.

I wanted to say this to show that the neighborhood organizationsthat you are examining have been developed over the last 20 years andhave been operating social and economic programs in their commu-nities in a context of the premise of national unity and commonpatriotism.

Let us be very clear. The devastation to neighborhood organizationsalong with other national, regional, and local vehicles of developmentthreatens to return us to a highly separated and exclusive societywhich had already, by 1960, proved to be far too divided for genuineworld leadership. Thank you.

Representative REUSS. Thank you, Mr. Kotler, for your testimony.Ms. Carol Brill.

STATEMENT OF CAROL BRILL, EXECUTIVE DIRECTOR, EASTSIDEHOUSING ACTION COALITION, MILWAUKEE, WIS.

Ms. BRILL. I would like to thank you for this opportunity to appearbefore you today. My involvement with neighborhoods and neighbor-hood organizations grows out of a personal experience rather than aprofessional or intellectual pursuit.

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I grew up in a northside neighborhood in Milwaukee that during the18 years I lived there was ravaged, raped, and left to bleed. It stillbleeds today. I remember the notices coming to may parents: "Sellnow or else." I remember the stores and banks closing up and leaving.We could not get a loan to add on a room for our growing family. Iremember the tension between the new and old residents. My neighbor-hood, by the way, had no neighborhood organization during theseyears. I know its fate today may have been different had it had one.

What happened to my neighborhood? Hindsight and 10 years incommunity work help me explain the phenomenon as disinvestment,block busting, racial steering, redlining, racism, and plain old aban-donment by business, banks, and city services.

But that was 11 years ago. Since that time I have been searchingin my personal, professional, and political life for a way to stop thatprocess from happening. There were movements, efforts to stop thistrend from happening, all around me in other neighborhoods inMilwaukee. People in these neighborhoods were organizing andsaying, "no" to block busting, "no" to disinvestment, "no" to fleeingthe neighborhoods that they and their parents considered home. Theywere saying these things in the form of neighborhood organizations.

What have they said and done in these past 10 years? I would liketo describe some of the organizations and some of the projects thatoperate in a variety of Milwaukee neighborhoods, including my oldneighborhood today.

I am director of ESHAC, which stands for Eastside Housing ActionCoalition. ESHAC is a 9-year-old neighborhood organization that hasgrown from a small group of people looking for an alternative to aboulevard that was going to destroy 65 homes and 15 businesses intheir neighborhood to a neighborhood organization and developmentcorporation with a $350,000 budget.

Riderwest, the neighborhood served by ESHAC, is a racially andethnically diverse neighborhood of 13,000. Since the late 1960's, ithas experienced declining-housing-stock, abandoned commercial strips,increased crime rate, unemployment, and racial tension. ESHAC hasdeveloped programs and worked with residents to address the widearray of problems threatening the neighborhood's survival and sta-bility. I would like to describe some of these to you.

Eight years ago, a large grocery store serving a lot of the poor andelderly population in the neighborhood decided to close. ESHACraised the capital and set up a neighborhood grocery cooperative.Though the store was severely undercapitalized to begin-there was nofinancing available for a cooperative-today Gordon Park FoodCooperative grosses $750,000 in food sales and employs 20 peoplefrom the neighborhood.

The last financial institution left our neighborhood in 1969. Todaythrough the joint efforts of ESHAC, and area churches, there is aneighborhood credit union with 500-plus members and $250,000 in as-sets. In addition, First HUB Credit Union sponsored over $200,000in low-interest housing rehabilitation loans from a State bondingprogram last year in our neighborhood. The credit union employsone full-time manager and has a VISTA volunteer in the office.

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A Neighborhood Improvement Project, which is operated byESHAC, was established as a no-cost rehabilitation program for low-income homeowners, allowing in the past 3 years over 300 people toremain in their homes, by bringing aging properties up to currenthealth and safety standards. The average age of a homeowner servedby this program is 65 and the average income is under $6,000. Theprogram is community development block grant funded and in addi-tion to allowing low income and elderly to remain in the neighborhoodas homeowners, it acts as a training program for under and unemployedminority and youth who work under the tutelage of a journeymancarpenter.

The ESHAC real estate program is a not-for-profit real estateservice which brokered 10 percent of the homes in the neighborhood,assisting many "borderline prospective homeseekers" to become home-owners, increasing, as they make the transformation from tenants tohomeowners, their stake in our neighborhood.

The ESHAC rehab and sale program is a nonsubsidized pilot public/private partnership program to purchase, rehab and sell deterioratingand abandoned homes to owner occupants. With a small downpaymentfund and private financing from local lenders, ESHAC is able to re-cycle abandonments and board-ups rather than losing precioushousing units to the bulldozer.

In a neighborhood hit by crime, vandalism, isolation, and fear,ESHAC has established a neighborhood-wide network of self-help,anticrime block clubs with projects such as neighborhood watches,neighborhood price, community forums, local safety and clean-upcampaigns.

In a neighborhood that just 5 years ago was written off, there are,day by day, signs of improvements, stability, hope, new life. Flightfrom the neighborhood has stopped, interracial block clubs and youthprojects are developing. The job has just began, but we are seeingresults.

As I mentioned, ESHAC is a part of a citywide coalition. I wouldlike to share some of the accomplishments of other organizations in thecoalition.

The Westside Conservation Corporation, established in 1977, is anonprofit Community Development Corporation. It was formed toincrease neighborhood stability in another Milwaukee neighborhoodby increasing the number of owner occupied buildings and improvingquality of housing. The corporation runs four programs.

Merrill Park rehab project purchased, rehabbed and sold 40 absentee-owned units of housing. All are now owner occupied or part of the WestSide Housing Cooperative. Mortgage financing for the co-op's purchaseof seven units was, by the way, provided through the National Con-sumer Cooperative Bank. Rehab financing was provided through aconsortium of local savings and loans and in addition to rehab, twosolar collectors were installed onto one of the apartment buildings.

The West Side Home Buyers Clinic was established to "prime thepump for the private real estate market." With support from com-munity development block grant funds, the clinic offers education andinformation to prospective homebuyers. Services include individualcounseling, information on homes for sale, real estate market informa-

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tion, referral to realtors, and home repair loan information. Fourthousand contacts a year are made resulting in hundreds of salesthrough local realtors.

An emergency purchase revolving fund is a pilot project to purchasehomes from elderly owners to insure that owner-occupied homes in thisdisinvested neighborhood are not subject to below-market valuedistressed sales, but rather are transferred to new owner-occupants,through a transitional ownership by the West Side Corporation.

The Corporation's "Joint Venture" with the Milwaukee Board ofRealtors allows West Side to purchase, rehab, and sell vacant andvandalized properties. To date, 10 properties have been turned aroundand are now owner-occupied.

There are many other examples that are going on in Milwaukee,such as a rehab program that is an apprenticeship program in theskilled building and construction. A community tavern and restaurantopened for only 13 months, with gross revenues of $250,000 a year,employing 16 full- and part-time people.

Two Neighborhood Housing Services partnerships of local lenders,city and residents for rehab of homes in formerly redlined neighbor-hoods.

What is represented here is a variety of creative self-help effortsto make neighborhoods whole, healthy, and economically viableagain, by and for the residents who live here. These projects rep-resent a commitment to the neighborhoods they operate in, a com-mitment to do business in neighborhoods long abandoned by business,government, and a variety of community institutions. This businessof rebuilding neighborhoods-creating mobs, revitalizing housing-isa difficult task. It involves not just bricks and mortar. It also in-volves rebuilding hope and a sense that there is a future in our centralcities for those who have lived there for so long without hope.

What do we need to continue these efforts? We are not looking formassive infusions of Federal dollars to solve our problems. We arecreating solutions through community controlled organizations andmany of our efforts are more and more being financed through theprivate sector and creative financing alternatives. But urban neighbor-hood decline is the result of years of neglect and active abuse. Thesupported neighborhood and community organizations and commu-nity revitalization efforts must not be cut short at this point. I fearthe consequences in our neighborhoods if it is.

In conclusion, I would like to outline a few of the programs andpolicies that have provided us with the weaponry to fight neighbor-hood decline. Several of these programs have been mentioned by theprevious speakers.

First of all, the Community Reinvestment Act and the Home Mort-gage Disclosure Act, so we have the help of encouraging privateparticipation from the private sector in all of our efforts in our neigh-borhoods.

Second, the VISTA program to provide the energy, talent, andresources in our desolate and needy communities. VISTA volunteerswho, living at poverty level themselves, help low-income peoplerevitalize decaying urban neighborhoods.

Third, the National Consumer Cooperative Bank to provide financ-ing for cooperative housing, cooperative stores, cooperative services.

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Oftentimes the only way to rebuild business in our neighborhoodsis the cooperative route. We are doing that, wve will continue to createcooperatives, but we need adequate financing so our businessesand housing projects do not have to start severely undercapitalizedand poorly financed.

We need community block grant dollars that are targeted tosolving the problems of low and moderate income neighborhoods.We need dollars to rehab homes and businesses devastated by yearsof neglect, disinvestment, and unavailability of financing. We needa mandate that this money be spent in targeted areas for specificpurposes that directly benefit the low/moderate income people.We need strong citizen participation requirements, for it is onlywhen people are involved in the determination of needs and develop-ment of these programs that there is any benefit to them.

We need CETA and other job training programs to provide thelabor for the jobs to be done and in a context that offers a future ofskilled, stable employment.

Many of us, working in our neighborhoods, have begun the longroad back. Some of us have started to turn the corner, but our prob-lems are the result of years of neglect and active abuse. Our effortsmust not be cut short at this point.

What we have at stake is the future of the heart of our cities, ourneighborhoods. Thank you.

Representative REUSS. Thank you very much, Ms. Brill.Although Democrats are having Jefferson Day dinners almost

every other day and although the leaders of the Republican Party,including the President, have nuzzled to their bosom Thomas Jeffersonin recent times, I'm struck by the fact that Jefferson's prime command-ment about the need for ward Republics and neighborhood self-development is being totally disregarded.

The administration budget program deals very savage blows toneighborhood programs and now that budget has been confirmed inboth bodies of the Congress, or will be very shortly, with a great manyvotes from the party of Jefferson and Jackson.

I want to turn to some of the testimony of Ms. Brill because Ihappen to know about many of the good things that are being done inher home town, which is also mine.

You point out that the neighborhoods need the VISTA program andin your testimony you describe what some of the VISTA volunteershave been doing. Notably, they are helping out in this very successfulneighborhood credit union that you operate. The President's programincludes the complete wiping out of VISTA, does it not?

Ms. BRILL. Yes.Representative REUSS. You mentioned the National Consumer

Cooperative Bank as having made some very helpful loans to a neigh-borhood group so that they could buy a number of tumbledownhouses, rehabilitate them, and then make them available to home-owners and thus stabilize the neighborhood. The President's programwould completely wipe out the National Consumer Cooperative Bank,would it not?

Ms. BRILL. Yes.Representative REUSS. You mentioned the need for rehabilitation

of neighborhoods. A leading tool for rehabilitation has been the section312 program, has it not?

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Ms. BRILL. Yes.Representative REUSS. Has that been useful in your area?Ms. BRILL. Yes; it has been very much so.Representative REUSS. And the President's program would com-

pletely wipe that out, would it not?Ms. BRILL. Yes; as I understand it.Representative REUSS. You mentioned CETA workers as being

helpful to neighborhood organizations. Have they, for example,assisted in your housing rehabilitation activities?

Ms. BRILL. Yes.Representative REUSS. What have they done?Ms. BRILL. The CETA workers worked on the crews of the neigh-

borhood improvement project which is a program that offers no-costrehabilitation to low-income and handicapped homeowners in theneighborhood who would otherwise have to give up their homes dueto the amount of code violations on their properties. So the CETAworkers have worked on that program and part of the program is,in addition to them participating in this effort which has really hadan impact on our neighborhood, they have also been able to gettraining in the construction trades and then we have been able toplace several of the CETA workers in unsubsidized private sectoremDloyment.

In addition, they have worked in our weatherization program whichis a self-help weatherization effort for homeowners in the neighbor-hood, and all those resources would be lost.

Representative REUSS. Well, the question I have to ask of anymember of the panel who cares to answer is: How could PresidentReagan, campaign for so many years on the basis of support for theneighborhoods, and a platform banner which we have reproducedhere today which puts "Neighborhood" at the top of Americanvalues, now turn around and in his first few months in office removepractically every neighborhood self-help program there is?

Ms. BRILL. I would say briefly, I share your concern. The concernI have is what I hear is that the private sector will take up some of thejob in some of these areas through tax benefits or whatever.

I'm concerned about that kind of approach because my experiencein the few neighborhoods that I have worked in has been that theprivate sector was the first sector that, generally, left the neighbor-hood and that the gap that's oftentimes left is because there are noprivate sector services from banks, savings and loans, a variety ofcommercial and retail services.

I don't know about the kinds of solutions that are being offered.I'm very concerned about them. I don't see them as particularlyviable in the kind of situations I've worked in.

Representative REUSS. In connection with that private sectorobservation of yours, why did you and your associates feel you neededto set up a neighborhood financial institution such as the creditunion that you have described?

Ms. BRILL. Well, one of the things that we found when we startedour neighborhood improvement project is that there are many peoplewho were not eligible for that program, as it has very strict incomeguidelines. In order to serve other people who were just over theincome guidelines, we attempted to have them get private financing.

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Oftentimes, it was not available from banks and savings and loans.Representative REUSS. Were there banks in the area?Ms. Brill. There were no banks in the area. The last bank left the

area in the late 1960's and now, actually, it's in a surrounding area, butthere are Do banks immediately serving the area, although many banksand savings and loans consider the Riverwest neighborhood as part oftheir service area and certainly people in the area save in those insti-tutions. But what the credit union has been able to do is not justpassively be there as a financial institution; it has been able to promotelending, prcmote second mortgage loans, promote home rehabili-tation loans in the neighborhood to people who have not traditionallyused financial institutions, either because they were turned down orthey feel threatened by them or are not comfortable in applying forloans. So the credit union has been able to take a very active role inlending out its membership shares, but also in pursuing funds.

I mentioned the Wisconsin housing conservation loan program.It was a State bonding program that was bonded for $20 million2 years ago and is now in the State legislature to be bonded for $100million. That is low interest home rehabilitation money. The creditunion last year lent out $200,000 of that money at 2, 4, 6, and 8 percent.No other lending institution in the downtown or Eastside area wasable to do that kind of lending in our area. So, it really fills the gapbetween the services we can provide and what people can get.

Representative REUSS. Are there other comments on what I per-ceive to be the current unfriendly attitude toward neighborhoods?

Mr. KOTLER. You're asking a very difficult question, Mr. Chairman.I suppose there are three possible alternatives to explain these cutson the basis of the President's announced support for neighborhoods:either the necessary sacrifice of a genuine objective; or an abstractaffection for the word "Neighborhood" without a practical commit-ment to its organization; or finally, prevarication.

Mr. LANDERS. Mr. Chairman, I don't mean to sound trite, but let'sbe honest about it. President Reagan hasn't lived in a neighborhoodsince how many years, nor do most of the folks who are formulatingthe policies that are going to impact on neighborhoods. I don't knowwhen President Reagan left the last real neighborhood he lived in,but I'm sure he's living with a romanticized and ideal vision of whatthat neighborhood was about. And let's face it, in those days youweren't talking about the same kind of neighborhoods-there weredifferent societies in those days. You weren't talking about neighbor-hoods dealing with the problems of integration and redlining and realestate practices and blockbusting. It didn't happen. The kinds ofthings that are impacting neighborhoods today with senior citizensand other problems, they just weren't talked about, or dealt with.

Today I think we are dealing at the neighborhood level. I wouldchallenge anybody-the President, Mr. Stockman-to spend 1 yearin a neighborhood, the kind of neighborhood we're talking about,and unless they have their head in the sand, I would say that theywould come out with a very different image or picture of what neigh-borhoods need and what our problems are.

Mr. SIMPSON. Mr. Chairman, I think what has happened is thatthere's been a great gain for the word "neighborhood." We havereached the level of rhetorical acceptance so that politicians use the

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label as a part of their slogan. As you point out, both parties adopted a"neighborhood" platform of sorts in their official party platforms. Thedifficulty is that this rhetoric is not followed up with any real under-standing of neighborhoods as necessary institutions for growth, preser-vation, and revitalization of our country. We have seen this, not onlyin the President's rhetoric, but also in the rhetoric of some Membersof Congress who have been willing to go along with these social cutswhich are directly harming their constituents.

In Illinois, we have set up "people's hearings" with members ofour congressional delegation from Illinois. I think our Congressmen,when the budget cuts were first proposed, were genuinely shocked tofind out the full effects of these cuts. It's one thing to say you're goingto cut a few billion here or a few million over there from some programin Washington that may fire a few bureaucrats and doesn't seem tohave much impact, but when you find out what these cuts actuallyare doing is creating more unemployment in the neighborhood, takingaway the staff of voluntary organizations, cutting out the day careprograms for the children, taking away their school lunches, takingaway food and medicine for actual constituents who live in the neigh-borhoods represented by Congressmen; then that's a far differentmatter.

I think the Members of Congress have miscalculated the depth andthe great harm these cuts will do. If it were a matter of a balancedbudget, we would all be happy to work on the problem of where Gov-ernment waste can be eliminated. Both Congressmen and citizenscould contribute ideas on how to cut waste. This budget doesn't cutwaste. The deficit is almost as big when you finish as when youstarted. Of course, that's because of the 39-percent increase in militaryexpenditures.

What's happened is that the President is just eliminating socialprograms whether they waste money or not and these funds are now tobe spent on military spending. Military spending is inflationary.First of all, it will not help the economy. Military spending is notgoing to solve inflation and unemployment problems. Those of uswho live in neighborhoods thoughout the country understand this.We're not unmindful of it. But, unfortunately, the budget proposals areflying under slogans. Both parties are supposed to be for neighbor-hoods, but members of both parties are doing the very things thatwould most harm the neighborhood movement and Congress is doingvery little to directly support the neighborhood movement.

Not only are there cuts on the budget side, but as I've studied thelast Congress, there was no neighborhood empowerment legislationthat ever got a full hearing or got to the floor. When we did our rank-ing of Congressmen and Senators on their neighborhood voting, wereally had to take a liberal package of legislation because there was noneighborhood package that ever came to Congress.

Much of what we see currently is a direct attack against the neigh-borhoods and the communities in the form of budget cuts. But,with the exception of this hearing which is the first one by Congressin which we have actually had a hearing considering these questionsfrom the neighborhood point of view, Congress has been unresponsive.This hearing is unprecedented. There have been previous hearingsat which neighborhood people have testified for years, but there has

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never been a hearing considering what neighborhoods mean for thiscountry in the 1980's. This is actually a landmark hearing.

Thus, we need positive initiative on the part of Congress as wellas the prevention of these disastrous cuts. And you might ask whywe're hopeful. We've struggled a long time to come to where we'vegotten. We're convinced that there's going to be a growth in sophisti-cation by both neighborhood organizations and Congressmen overtime and that these more positive legislative proposals for neighbor-hood enpowerment and neighborhood funding will come. However,for now the proposed budget cuts are certainly disheartening andthe lack of proposals for positive change in funding and empoweringneighborhood organizations as well as the negative impact of exist-ing laws and regulations such as the the postal regulations are seriousproblems. We are here today to testify that there are many areasin which the neighborhoods could be benefited if anybody cared.If the slogan about neighborhoods was not used as a political sloganand rhetoric, but if Congressmen genuinely cared to rebuild the com-munities of this country, they could be rebuilt.

The people of the neighborhoods stand ready to do it. We needsome guidance, leadership, and support and that's what we havenot got even very much of from the National Government. And nowwe're faced with literally an attack on the well-being and future ofthe neighborhoods.

Representative REUSs. Thank you. Congressman Richmond.Representative RICHMOND. Thank you, Mr. Chairman.Mr. Simpson, I think one of the great problems of our neighbor-

hoods is the senior citizens because you find so many senior citizensliving in particularly these older neighborhoods alone, needing alltypes of services, and the big problem is to keep them out of institu-tions. I have recently introduced a bill which would allow seniorcitizens-any senior citizen-to visit his or her local school at 1 p.m.after the children finish lunch-we already have the light, heat andrent paid for and we have the kitchen staff-and participate in atypical school lunch which would give them their main nutrition forthe day. And after that they could spend the afternoon either in theclassroom as paraprofessionals tutoring the children or visitingthe gymnasium and watching a basketball game being played, orusing one of the spare rooms in the school for bingo or what have you.Then as they left, they would receive a small snack of a roll, a pieceof cheese, a piece of fruit, and such other surplus commodities aswe have.

This entire program would cost $1.35. I personally feel that for$1.35 a day, which is minuscule, we possibly could keep an awfullot of people in the neighborhood in their own apartments out ofinstitutions, out of nursing homes which cost $80 a day for the facili-ties up to $200 a day.

What do you think of a program of that type?Mr. SIMPSON. I think the concept is excellent.Representative RICHMOND. Would it work? Would senior citizens

go to a school for lunch and spend the afternoon there and havesome recreation?

Mr. SIMPSON. We have similar programs, of course, in the hotfood programs that are provided for seniors now. The issue you'readdressing is that this existing program is too small.

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Representative RICHMOND. That is roughly $3.85 a day.Mr. SIMPSON. My only point is that we have already proven that

programs which provide food and program activities for seniors willwork. Seniors will participate and they will benefit from it. When Iwas an alderman in Chicago I helped to get the food programs in myown community and I'm directly familiar with them.

What your suggestion does is to expand existing programs to thelevel where you can increase the number of people *vho take advantageof them. Essentially the hot food program was always limited not justby the cost but by the problem of setting it up. The use of the schoolis an excellent idea. I would have to point out, though, that it willnot only be the cost of the food that will be required to make this newprogram work. These kinds of programs in the past have used CETAand VISTA workers and other staff who can actually administer theprogram and provide the other necessary components, such as theuse of seniors as teacher aides and the planning of the activities andprograms for the seniors themselves. Even the existing program hasbeen more than just food. A staff was required for the programs whichallowed the senior citizens to do something, not just eat a meal. Sosuch a program is going to require personnel. You really have a doublethrust, providing food and giving seniors useful activities.

Using the school building is excellent. In Illinois there's a long-standing State law called the lighted school house program. It wasbegun in World War II. Its concept was essentially the same as yours.The school buildings already exist. Let's make use of the existing facil-ity and use it for other activites in the community. That was aban-doned in Illinois for lack of funding. So your concept has great merit.But it needs not only the concept of the food but the concept of thesupporting program which is not terribly expensive with the VISTAvolunteers we're talking about. You don't need too many, but youneed some of them.

Representative RICHMOND. On the other hand, chances are if thesesenior citizens could give substantial assistance to the teachers and theschool through 1-to-1 reading and what have you, I assume perhaps theschool might have one person that could help the senior citizens.

Mr. SIMPSON. I'm afraid there you run into the reality of the currentbudgets, at least in the major cities. While the idea has merit andwhile, in fact, the actual tutoring by the senior citizens is worth morethan the cost, my guess is that schools under their current financialand administrative arrangements could not provide the additionalpersonnel for coordination. I don't know whether you have ever runtutoring programs or been around them, but they work marvelouslyif you actually put the adults and the children together. But it alwaysrequires a staff administrator to get the right adult and the rightchild together.

This is what community organizations are all about. What we do istake massive amounts of volunteer time and effort and coordinate itso that it is effective. Without the coordination, we can't do what isneeded. So it's not only the matter of the actual food and getting theseniors to the building. My experience with the schools is that they arevery rigid and they have budget crunches that are. very bad. You'll beable to transform the schools with this program only if you providethe person to coordinate it.

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Representative RICHMOND. And in your opinion the seniors wouldparticipate in the program?

Mr. SIMPSON. They certainly would. They participate in all mean-ingful activities that are proposed and the additional inducement ofhaving meals would help to solve their nutritional problems and theirfinancial problems. But all of these things which we do require coor-dinating. In our communities, we do the same kind of thing. We'retrying to knit together existing resources without vast expendituresto achieve our purposes better, but they require additional staff.These efforts require a total program and they require commitment.

Representative RICHMOND. Just think how much money would besaved by keeping the senior citizens out of institutions. Obviously, youwill never find a senior who wants to be institutionalized. The onlyreason they go there is because they can't take care of themselves.

Mr. SIMPSON. And when they become institutionalized, they becomesick. Once they do become institutionalized in a nursing home, they'reautomatically made sick.

Representative RICHMOND. And then you're talking about lots andlots of money.

Mr. SIMPSON. Yes.Mr. LANDERS. I'd like to comment on that. I'm not as optimistic

about seniors using that kind of service, to be quite honest with you.Many of the seniors in our area will not go out of the house and willnot ride on a bus during the hours of the day that the schoolchildrenare on the buses because more often than not they are victimized byyoung people. I just would have a lot of concern about whether theprogram would be used and if it is really cost effective. I think one ofthe reasons senior programs have worked so well is because they haveprovided this sort of wholistic approach. I think there would be alarge number of seniors who would hesitate to come to the schoolfacilities because of the conditions within the school facility.

I don't know if you have been in a junior high school hallway duringthe change of classes any time recently, but it's no picnic or Sundaylunch. I'm just saying I would have some concern, because of the thingswe hear coming out loud and clear from seniors is this problem ofsafety, and the statistics surely support what they're saying. Afterall, more often than not, they are the ones who are victimized in termsof street crimes and so forth.

So I would just hope that you take a very careful look at that beforeproceeding.

Representative RICHMOND. Mr. Kotler and Ms. Brill, how do youfeel about it? Of course, I assume the neighborhood organizations inthose local areas would help in the outreach and help in the supervisionof this type of program.

Ms. BRILL. Just at first glance, it sounds like a very good program.One of the unfortunate things that's happened recently is, with theCETA cutbacks, Milwaukee lost the neighborhood security pro-gram. We had a program that was supported by the CETA programfor persons potentially interested in becoming police officers. Theywalked the neighborhood in uniform. They did not carry guns butcarried walkie-talkies and escorted people, mainly senior citizens,but were very visible and very effective, and I think that would bea very good part of the kind of program you're talking about.

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Unfortunately, they are no longer in existence because of the CETAcutback, but other than the concerns that were just mentionedabout, oftentimes the perception of the school being a violent placeis something that the seniors certainly have. I think it would be avery successful program in our neighborhood, for instance.

Mr. KOTLER. Of course, the most striking thing about your pro-posal is the suggestion that our senior citizens can willingly shouldernew responsibilities in the community by tutoring and assisting stu-dents. That's the most valuable idea, and that responsibility in anycommunity situation would create a leadership among the seniorcitizens which could overcome certain obstacles. For the sake ofthat responsibility, senior citizens would take certain risks in goingto the school. These risks could further be reduced with transporta-tion assistance.

Representative RICHMOND. Mr. Kotler, even if the program wereonly 10- or 15-percent effective, just think how many of them wecould keep out of institutions and how that would change our costof health care in the United States.

Mr. KOTLER. And how many young people could be assisted intheir education.

Representative RICHMOND. The program doesn't have to be fan-tastically successful in order to work well, because any senior whowants to come to a local school and wants to have lunch and wantsto do tutoring in the afternoon would come, and one thing sure is,you would be helping the children and helping the seniors stay outof the institutions. That's the biggest health care cost we have in theUnited States. That represents over a third of our total health costs.

Mr. KOTLER. It's good neighborhood thinking.Representative RICHMOND. Block grants, I assume, all of us here

would be very much against because of the problem that once theFederal Government gives block grants to States, we have no con-trol over where they go and they are not likely to get into neighbor-hoods. Do you all feel that way?

Mr. SIMPSON. You're talking about the new proposed block grantsfor the social services?

Representative RICHMOND. Right.Mr. SIMPSON. I think one of the effects of these proposed new block

grants will be to suspend all Federal standards. You can't requireeducation for handicapped children.

Representative RICHMOND. And Federal accountability.Mr. SIMPSON. Or any accountability for funds, once you give

money to the States and say do whatever you want in social services.First of all, the funds are being cut in every case 25 percent or more.Second, all the standards are being suspended, so you're no longerrequired to meet any standard of service or care.

Representative RICHMOND. So we'll end up with more conventioncenters in more States.

Mr. SIMPSON. What you'll end up with are groups that aren'tvery politically powerful losing their essential programs. Take thehandicapped. The handicapped are going to lose out because theywill end up not being able to fight against the more politically powerfulinterest groups with their clout and lobbyists. You'll pit all social

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groups against each other and the ones that need the services mostare going to be the least able to demand them. As a result there aregoing to be sectors of society that are going to be ravaged.

While one wouldn't want to argue that all categorical programsare good-some of them are bad and some need to be eliminated-thenotion of simply throwing everybody to the wolves to fight it outfor the few remaining dollars is cruel. We're going to have moreproblems with these block grants than we had under the existingcategorical programs and the human costs, again, are going to bevery great.

The worst and most negative aspect of the current cuts-remember-ing that we have lived through Government changes before and wecan live through almost any policy changes but these cuts are goingto hurt a lot of human beings. The other negative aspect about thecuts that I don't think has been considered very much outside ofCongress is that we're really changing major public policies underthe guise of budget cutting.

I teach at a university. There are 17,000 full-time students at myuniversity and another 3,000 or 4,000 part-time students. Of those full-time students, 6,000 of them, according to our university adminis-tration, are going either to lose totally their student loans and grantsor have them reduced. I didn't know that the Congress of the UnitedStates had decided, for instance, to close 500 liberal arts colleges inthe United States and do away with liberal arts education. I didn'tknow in public universities that we had decided, as public policy,to only let the rich and the very poor go to college and that theworking class and lower middle class no longer need college opportuni-ties. That's the effect of these cuts. This is not an education policythat has been carefully studied and considered. The same is true inthe social services too. We didn't know when block grants wereproposed that the purpose was to cut handicapped people out ofblock grants, but that's what these block grants do. That's the in-evitable consequence of going to block grants. We didn't say to theAmerican people that we were going to suspend all the Federalstandards for decent education in the public schools, but that'swhat these block grants do. You are taking away the right to bilingualeducation, handicapped education, and special education when youlump them all in the education block grant. There's no funds left forthese programs.

In Illinois, one of the things first to go in the Governor's additional$200 million cuts were these specialized programs. We're not goingto have bilingual education or education for the handicapped in theState of Illinois any more if the Governor's program is adopted.There's as much pressure in the State legislature to pass the Statebudget cuts as there is in Congress to pass the Federal budget cuts.These are truly devastating cuts.

Mr. KOTLER. Mr. Chairman, for your own information, I justreturned from Wilmington where I met with a number of groups aswell as with Prof. David Ames, the dean of the Urban Affairs Depart-ment at the University of Delaware. He reported to me that certaincalculations now indicate that 25-percent Federal cuts in humanresources programs could produce 60-percent cuts at the State levelwhen you add imminent State legislative action. I raise this and

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suggest you might want to contact Mr. Ames and see how he andhis group arrived at his calculation. I have not seen any research yetof the multiplier effect of the Federal cuts at the State level.Representative RICHNIOND. Thank you.Representative REUSS. Thank you. Before recognizing SenatorSarbanes, I want to say that the testimony of all four witnesses hasbeen, in my view, simply devastating; that there apparently is anattempt by the administration to undo most of the things which havehelped neighborhoods in the last decade. We invited here this morningthe top representatives of the administration-the Secretary of HUD,the various under secretaries of HUD, the various assistant secre-taries of HUD, the various policymakers of HUD-and it's been atotal no-show. I would add that if anybody from the administration

cares to make a defense of the antineighborhood position of theadministration, this committee will be open to them on a few daysnotice any time they decide that there's anything to be said for theirposition.Senator Sarbanes.Senator SARBANES. Thank you, Mr. Chairman.First of all, I want to commend you for holding these hearings. Ithink it's very important that the impact upon our neighborhoods ofwhat's being done at the Federal level be placed on the public record

in as full and complete detail as is possible, and I join you in expressingregrets that the administration has not seen fit to come in and presentits point of view on this matter because I think, as Mr. Simpson justsaid, in the guise of budget cuts, some very far-reaching policy changesare being made.

Although that automatically-the budget, in any event, encom-passes a range of policy decisions and people have to just understandand appreciate that, and the notion that all that's being done is apruning of the tree is really not accurate. What's being done is a lot ofthese trees are being ripped up by the roots with all the consequencesthat flow from that.

Baltimore is cited, Mr. Chairman, across the country now as a citythat's had an incredible renaissance. That's true. Visitors often focuson the downtown and what's happening there, and that's prettyimpressive. But I think in a way more fundamental to our renaissanceand a firmer basis for it is what's been happening out in the neighbor-hoods and I'm particularly pleased that Jody Landers is here becausethe Harbel organization of which he's the operating head has reallydone an incredibly fine job. I'm very familiar with their work. In fact,we have worked together over the years and they and similar organi-zations throughout our city really can claim the credit for what's beenaccomplished there.

I also serve on the Banking Committee, as does the chairman on theHouse side, and we have just marked up the housing bill and we havegone through some very difficult fights there, and I'm sure you all areaware of it, but I need to alert you to the facts. We were able, after astrenuous effort, to hold on to some citizen participation requirement,only we had to fight like for our lives simply to hold on to the require-ment of a hearing with respect to the community development blockgrant-simply to hold on to requiring that there be a public hearing atwhich citizens be able to come in and comment about the proposed use

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of the community development block grant money. We were able toget that into the bill. The administration opposed having a hearing.

It has nothing to do with complying with substantive standards.Those, as you know, are being taken out of the bill with respect tothe community development block grant, and what the focus is sup-posed to be and what problems are to be concentrated on, the fullformulation of a plan and all the rest of it; but even what I regard asvirtually minimal levels of citizen participation-there was an effortto eliminate those. We have held on to them. I'm hopeful that theHouse, in the course of its markup, will go well beyond that and per-haps we can do even better in conference.

The Consumer Cooperative Bank, we just managed to keep it alive.That's about what it amounts to in the markup, and I don't knowwhether the Reinvestment Act is going to be up next for targeting ornot.

As one who was involved in trying to get those on the statute books,we are concerned about that effort as well. It is asserted to us by theadministration that the private sector will pick up all of the-or a goodpart of what's being cut out. Namely, it's being thrown back to thelocal level and the local community and everybody is being calledupon to come forward.

What's your expectation that that will happen? Ms. Brill, I noticedyou talked about the loss of your CETA workers and your VISTAworkers and the 312 money and the co-op money and so forth. What'syour expectation in response to this administration notion that some-how the private sector is going to pick all this up, you and the othermembers of the panel?

Ms. BRILL. I have very little expectation that that will happen.As I mentioned in my comments, we have been able to get more andmore participation from the private sector in a variety of our Projects,but we have been able to get that because of the Community Reinvest-ment Act and because of some of the information we have been ableto get from the Home Mortgage Disclosure Act about the participationof financial institutions in our neighborhoods. I believe, without those,we would not even have gotten to the point where we are today.* The kind of participation we receive, for instance, is in our purchase,rehab, and sale program. Some of the financing for the rehab of theproperties is from private savings and loans and banks. So they arepart of the program and they are lending dollars in neighborhoodswhere formerly they were not lending dollars. But it's a long way fromplaying that role to initiating programs and looking at neighborhoodsand planning for neighborhoods and developing the variety of pro-grams to deal with the problems in neighborhoods.

As I mentioned before, I think a lot of the problems we're facingare because the private sector has fled a lot of the neighborhoods. Youcan see it in the commercial strips. They're vacant and they're boardedup. The old bank buildings are empty.

I don't know what will encourage the private sector to leap backinto these neighborhoods today. I don't see that. I don't have thefaith that the administration has. We will certainly continue to workto get as much private sector involvement in job creation and housingrehab and lending and all the kinds of things we're working on now,but I'm not very optimistic that that kind of involvement will comejust out of the good will of the private sector.

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Senator SARBANES. Mr. Landers.Mr. LANDERS. Senator Sarbanes, it's good to see you again. I wouldjust say that in Baltimore it's estimated that the loss of the purchas-

ing power in terms of these programs is in the vicinity of $350 million.It's difficult to see, in the face of a loss of that size, that amount ofpurchasing power, how the private sector is going to be able to doanything in the near term and even for the next few years.It's interesting that even now, in talking to businesses in our area,

they are hurting, and with the impact of these cuts, particularly inthe urban areas where you're putting 3,000 people out of work on topof those who are already out of work-I just shudder to think of theimpact it will have on our local economy.

So I don't know what private sector the adminsitration is referringto, but I venture to say that I expect it to get much worse in terms oflayoffs and people out of work because of the loss of this purchasingpower and these dollars in the economy of the urban areas.

Mr. SIMPSON. Senator, I think our experience has been that theprivate sector can indeed be helpful. However, businesses are mosthelpful when it is in their interest to be helpful, and it is not in theirinterest under the proposed legislation. Let me use the example ofthe Community Reinvestment Act. I'm the original author of theChicago ordinance on bank redlining which we passed when I wasalderman in the Chicago City Council, and it eventually passed asthe national standard as well. What we were trying to do then wasto get financial institutions to do their duty to their own community.We required disclosure of their deposits and loans and then depositedcity funds accordingly. They were given an incentive. If they wantedto stay a bank and get our city funds, they knew they first had todisclose what they were doing and, second, they had an incentiveto reinvest in their own community because they were beingwatched.

I would suggest that in the current situation for instance, changesin the tax law, not general tax cuts such as the administration hasproposed. If you want to give a tax cut, give a tax cut that only goesfor specific purposes of financial or capital reinvestment in waysin which you want to direct the private sector to reinvest. Thus,a simple amendment to the administration's tax cut would changethe whole tax cut question. Then you would be giving an incentiveto the private sector to invest in new plants, in job creation, and inour neighborhoods.

There are other kinds of regulations that would provide incentivesfor the private sector to do what it should do in its own neighbor-hoods and communities. All of this is in the private sector's ownself-interest, but it's in their long-term interest, not the immediateself-interest. We talked earlier about some of the tax laws as theyaffect individuals who contribute to neighborhood organizations.I talked about the possibility of a tax checkoff system in which theneighborhood would get funds from a neighborhood tax checkoff.This is an attempt to encourage individuals and corporations tosupport neighborhood organizations by giving them benefits, in thiscase, profits for doing so.

So I think that legislation has to be designed to make it profit-able for the private sector to do the things that we want the privatesector to do.

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As to the community development block grants which you have

been discussing, yes, all of us are discouraged to see the citizen par-

ticipation regulations knocked out. The community development

block grant, as I testified earlier, didn't go far enough in the old

system. What we really need is the right to have neighborhood plan-

ning and the right of empowerment of existing organizations.

We need to require that all proposed Federal expenditures provide

neighborhood impact statements just as we require an environmental

impact statement. And neighborhood groups must have the right to

testify as to whether the neighborhood impact statements are true

or not. So we really needed a better law and better regulations re-

garding the community development block grants.In Chicago, there have been 14 complaints against the city of

Chicago for its use of community development block grants. These

have been filed by many different community and civic organizations.

They have merit. But, under the previous administration, not a

single complaint was upheld. HUD has never cut off funds for the

most flagrant violations of the old CDBG standards. Now the Senate

is proposing even eliminating the standards. If we do that, it's a very

serious step.Thus we believe that the President and the Congress are making

fundamental policy changes which have little to do with the budget

cutting which don't reduce the Federal budget deficit at all but which

literally devastate our communities.What we have asked is to be empowered, not to be weakened. What

we have asked is the right to take more responsibility and to do more

for our communities rather than being forced to do less because we

lack of resources and lack authority. I would hope to see the kind of

leadership emerging in the Congress that would articulate these views

which would in the long haul be a political constituency which would

manifest the public support needed for neighborhood empowerment.

I think there is already considerable public support base for strength-

ening neighborhoods. I think there is an inherent good will for the

idea of neighborhoods providing their own services and doing their

own rebuilding as well as rebuilding America, but we are, as you sug-

gest, under great attack with the current cuts and policy changes. We

greatly need the kind of leadership which this committee potentially

represents-Members of Congress in the House and the Senate who

will advocate a genuine neignborhood position that we can support.

We stand ready to support those public officials who will give leader-

ship and will articulate these goals. We think the majority of the

American people are with us on this issue.If Americans were asked whether neighborhoods should be further

destroyed or griven a chance to rebuild themselves-the American

people would clearly be on the side of neighborhoods being given the

op portunity to rebuild themselves. That's not what the current

policies-neither the proposed budget cuts nor the current changes in

law. They do the exact opposite.Senator SARBANES. Mr. Chairman, I just thought I'd note in terms

of the breadth of the attack that one of our exhibits here is the papers

edited by Professor Simpson and Fred Hess on neighborhood revitaliza-

tion, and I note that they are a product and resource of the community

renewal society's program on "Unemployment and the Future of

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Work," funded in part by the National Endowment for theHumanities.Mr. SIMPSON. That's right. They were paid for by the National

Endowment for the Humanities, which is being slashed 50 percent inits funding.Senator SARBANES. So everywhere you look, it's happening. Mr.Kotler.Mr. KOTLER. To your question about the administration's proposi-tion that the private sector will pick up the slack, I can only say that,at best, that is a theorem which is causing great dread among ourfriends in the foundation world and in industry.Senator SARBANES. Would you go a step further and say, contrary tothe administration's premise, that the various programs which have

combined on the one hand putting money into the neighborhoods,public money in one way or another, to address a whole range of prob-lems and therefore to create a more attractive environment forprivate participation, coupled with some of the requirements containedin things like the Community Reinvestment Act, which I guess in asense come under the rubric of regulation, which is another area weare addressing-but that those things have in fact induced and en-couraged private contribution because they helped to create a basicenvironment or framework in which it becomes more attractive, moresensible, more logical, more productive for the private commitmentsto be made, and that therefore the slashing of those programs andtheir elimination, rather than creating an opportunity for the privatesector to step in and participate, will in fact discourage the privatesector from participating because they won't be interrelating withthe public contribution?

I think that's our experience in Baltimore. We have been able,through putting in public moneys, to create in many instances whatare the basic infrastructures, however you want to refer to it, whichthen the private sector responds to, so you draw out a greater contri-bution from the private sector than I think would otherwise be thecase, and certainly more than will be the case if you drop all of thepublic participation at which point they will look at the situationand say, well, there's just no logic in participating.

Mr. KOTLER. Certainly, Senator, private participation has been atested result of public inducement. We are exchanging that testedresult with a theorem. That appears to me to be a reckless exchangeand motivated, as I can see, by a deep, powerful ideological urge.I cannot see any merit in that kind of exchange.

Mr. SIMPSON. There's a specific example of this in housing. Wefinally have gotten to the point where we have neighborhood housingrenovation programs. Neighborhood rehab corporations saved homes.In Chicago, we have a net loss of 12,500 housing units a year. We'relosing that many units even after all the new construction. The housingstock we have in Chicago is basically sound. But at the current rate ofloss, we are throwing away more housing units than we can afford tobuild. Even the private sector cannot afford to rebuild the housesthat are lost, but publicly supported neighborhood corporationsare renovating some housing. In addition, they are buying all theirproducts used in renovation locally. They're not buying their hammersor saws or nails or lumber in Washington. Neighborhood housing

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renovation is stimulating the private sector. It's starting renovationcorporations that didn't exist before in the inner-city. It's savinghousing stock that nobody could afford to build anew.

And yet this administration is proposing to cut all of those funds.So that means for cities like mine and yours, cities like Chicago,that we're faced with continued housing abandonment. I estimatethat the city of Chicago is going to lose more than $100 million directly

in the cuts. That's a very conservative estimate. That means thatwe will have to raise our property tax by one-third in the city

of Chicago to pay for the services that are now being provided by

Federal funds. We can cut a few of those as frills but not most of

them. Higher property taxes are going to cause more abandonmentof housing. Our problem is going to worsen.

So instead of losing 12,500 housing units, we're going to start

losing 15,000, 18,000, or 20,000 units a year. This housing can never

be replaced. We cannot afford to lose that housing. It's a permanentloss and it's a direct outcome of the proposed policies. It unconscion-able. This is only one example, but it's a clear one of the economic

effects of cutting small programs in the Federal budget related to

housing renovation.Senator SARBANES. Thank you, Mr. Chairman.Representative REUSS. Thank you, Senator Sarbanes.Mr. Landers, at the start of your remarks this morning, you pointed

out, perfectly understandable as far as I'm concerned, that youwere glad to come down here this morning but that you weren't

sure it would do any good. And that may be. However, I was par-

ticularly distressed by a specific example you gave.The Postal Service it turns out, confronted by a law of Congress

which says that they should give group rates and special mailing

rates to "philanthropic" organizations, has been doing somethingvery strange. Their regulation under that congressional law defines a

philanthropic organization quite reasonably as one which is organizedfor "lessening of the burdens of government, promotion of social

welfare by organizations designed to accomplish it, lessening of

neighborhood tensions, eliminating prejudice and discrimination,combating deterioration," which sounds exactly like a definition of a

neighborhood organization and all of the things the neighborhoodorganizations do. Then we come to something which says that "cit-

izens and civic improvement associations do not qualify."Am I right that under that the Postal Service denied your orga-

nization special rate qualifications?Mr. LANDERS. Harbel, my organization, has been able to get the

special rates because we have gone through and gotten the 501(c) (3)

status which took us approximately 1Y2 years with some volunteerattorneys' help.

Representative REUSS. That's the kind of status enjoyed by the

Rockefeller Foundation and the Ford Foundation and other big

outfits?Mr. SIMPSON. Exactly, the people or the organizations that have

been denied this are the local units, the neighborhood association at

the base level in the community, and under the regulations we are not

allowed to even let these other organizations mail out under our permit

because they are separate corporations. It's a "Catch-222' in the

regulation.

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Representative REUSS. And, its those actual neighborhood organi-zations-as opposed to a federation or a holding company, howeverworthy they may be-that represent the actual grass roots where thefolks live. And it's the neighborhood organizations which ought to getthe special rate so they can better communicate, is it not?

Mr. LANDERS. Absolutely, and more often than not, they are thegroups through which these activities occur. I mean, they are theorganizations that are actually doing activities which will lessen theburdens of Government and so forth.

Representative REUSS. I find this regulation of the Postal Servicelike a crooked insurance policy. The big print gives it to you and thelittle print takes it away.

Mr. LANDERS. The annotations are mine, incidentally, on thehandout.

Representative REUSS. Let me just ask Mr. Kotler and Mr. Simpsonwho perhaps are more familiar with this on a national basis: Has thePostal Service been bobbing off neighborhood organizations as alleged?

Mr. KOTLER. Well, I would just add another dimension. TheNational Association of Neighborhoods just joined a suit against thePostal Service to permit neighborhood organizations to put theirliterature in mailboxes without stamps. We can't even put our hand-outs in neighborhood mailboxes, hand-delivered by our volunteers.

ReDresentative REUSS. Leaving that extra outrage to one side, it istrue, then, that genuine neighborhood organizations-organized tolessen the burdens of government, promote social welfare, ease neigh-borhood tensions and prejudice and discrimination, and to combatcommunity deterioration-which seek from the Postal Service thatspecial rate, are being zapped; that they're kicked around and deniedthe special rate?

Mr. KOTLER. The Postal Service requires a 501(c) (3) technicalruling, and short of having that, which is simply something that agreat number of our neighborhood organizations do not have, theycan't.

Representative REUSS. Neighborhood organizations shouldn't beasked to get a technical ruling. I have gone through that processmany times and it's a back-breaking, time-consuming, dollar-costingventure.

Mr. KOTLER. There could be other ways of verifying the publicpurposes of the organization other than the extremely costly process ofserving a 501 (c) (3).

Mr. SIMPSON. The simple way, I assume, to change the regulationis to allow the State not-for-profit organizations which do these thingsto qualify. To be a not-for-profit corporation in the State of Illinois,you have to have $25 and file a sheet of paper with the secretary ofstate and it's done. It doesn't require a 501(c)(3) and it doesn't take2 years. Nearly any organization can comply with State incorpora-tion standards. So rewriting the regulation is relatively simple. It's amatter of whether there is the will.

The Postal Service, like all the other Federal Government bureauc-racy, are not particularly interested in furthering the activities ofcommunity organizations, but this is one good example of a regula-tion that hurts neighborhoods.

Representative REUSS. I don't see why you even need to rewrite theregulation. All you need is to cut out the crooked insurance policy

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fine print in which they take away what they have just apparentlygiven.

Well, are you Mr. Landers, and any other members of the panel,able to present to us actual evidence that the Postal Service has infact denied to a philanthropic neighborhood organization the rightwhich Congress meant to give it for the normal special rate?

Mr. LANDERS. Oh, yes, we have a number.Representative REUSS. If you will provide that evidence, I will

write a letter to the Postal Service calling to their attention the im-peachment proceedings under the Constitution and other little focusersof their attention which may help. I think this is simply disgusting.

Mr. LANDERS. Mr. Chairman, one of the problems with this regula-tion, if you read it, it even gets worse, because there's a clause in herewhich indicates that even if a neighborhood organization has the501(c)(3) rating it does not necessarily require the Postal Serviceto grant said organization the permit.

Representative REUSS. And more than that, they specifically say-and this is to their credit-that if you don't have one, that doesn'tprevent you from having one.

Mr. LANDERS. That's right. So they've got you coming and going.One of the problems has been that we have been able to learn thatthere have been some postmasters that have given neighborhoodassociations the status and others who don't, and under this regula-tion they can almost do what they want with neighborhoodassociations.

We have had meetings with the local postal officials responsiblefor administering it and all they have been able to do is tell us itdoesn't make sense to change the regulations; that what we shoulddo is go back and change the purposes of our organizations to fitwithin the exact wording in these regulations; which, even if we didthat, under their regulations they could still come back and deny usthe permit.

Representative REUSS. Perhaps this is another example of theirprivate sector approach. That is to say, if we zap the neighborhoodorganizations and favor the private sector, then the private sectorwill be heard to come to their relief. There may be something to thatbecause I note several things. One, that magazines, including Playboymagazine, get large subsidies, of course, from the taxpayers for thepostal distribution of their magazines, but I'm heartened becausethe very worthy National Neighborhood Platform of the NationalAssociation of Neighborhoods, which I have in my hand here, sayson the flyleaf "Printing donated by the Playboy Foundation." Somaybe they will cite this as an example of bread on the waters.

But anyway, the problem of helping neighborhood organizations,I think, could be more directly undertaken, and if you will supplyus with that information, we will see what we can do.

Senator Sarbanes.Senator SARBANES. I have no more questions.Representative REUSS. Well, this has been a fine hearing. The

problem is great. The road is all uphill. We shall persevere. Thankyou very much.

We stand in adjournment.[Whereupon, at 11:55 a.m., the committee adjourned, subject to

the call of the Chair.]0