Breathing Life in Low-Income Communities with Effective Financial Programs

There is an epidemic that has plagued hundreds of communities and millions of lives for many years – poverty. The face of poverty has transformed since the early 20th century; meaning, poor communities are no longer faced with visible crumbling infrastructure and unimaginable sanitary conditions. A lot of these conditions have changed as a result of federal and local legislation that have mandated the implementation of legal codes, such as regular trash pickups, landlord/slumlord laws and routine inspections of neighborhood conditions by city inspectors.

Currently, the face of poverty has taken on the image of violence, the concentration of drugs and inferior education. What is the root of modern day poverty? Unemployment. Most communities that are fighting the poverty war are plagued with staggering numbers of unemployed men and women who were born in underserved communities.

As a result of decades of high unemployment rates in specific areas, researchers, legislators and community leaders have been able to analyze lots of data and build economic models that are strategically designed to combat this issue. One of the most innovative proposals was the establishment of the Certified Capital Company. CAPCO was founded to give the financial services industry an opportunity to provide financial support for designated communities that have high unemployment rates. The ultimate goal of CAPCO is to strengthen impoverished communities by creating high-paying jobs. The CAPCO initiative is accomplished with funding programs and tax credits for small businesses that establish offices and facilities in designated zones.

It is estimated that 20 percent of US states have voluntarily incorporated and renewed CAPCO programs for the advancement of struggling communities. For example, Washington, DC recently celebrated the launch of the CAPCO program, which offers tax credits for insurance companies that provide $50 million in ongoing equity and capital programs for new and growing businesses.

So far, Washington, DC has certified three companies through the CAPCO program to offer $50 million in loans and equity funding for small businesses over a 10 year period. These companies are: Enhanced Capital District Fund – $25 million; Advantage Capital – $10 million and Wilshire DC Partners – $13 million. Under the leadership of the mayor’s office and Washington, DC government officials, these companies are working to stimulate job creation and high-paying wages for low-income communities.

Since its existence in the early 1980s, the CAPCO program has proven to be a valuable financial model that has positively impacted the lives of people who live in states, such as Alabama, Colorado, Florida, Louisiana, Missouri, New York, Texas and Wisconsin. Many people who thought they were in a hopeless situation have found funding, employment and inspiration as a result of the CAPCO program. As CAPCO continues to thrive, many Americans are witnessing a shift in poverty for communities that have endured financial pain and suffering for many years.