Are You Actually Ready to Be a CDE—or Just Tired of Being Left Out?
Joy Johnson
In my last article, I wrote about the power behind who gets to decide Community Development Entity (CDE) status—and how that decision shapes which neighborhoods see investment.
This piece asks the harder follow-up question:
Are you ready to be a CDE—or are you just exhausted from being excluded from capital?
Those are not the same thing.
And confusing them can stall an organization for years.
Readiness isn’t about size or frustration
There’s a common assumption that once an organization is large enough—or fed up enough—it’s time to become a CDE.
But readiness has little to do with:
Budget size
Staff count
Years of service
How often you’ve been overlooked
CDE readiness is about operating posture, not credentials.
Reviewers aren’t asking, “Do you deserve this?”
They’re asking, “Can we trust you with scale?”
What readiness really means
Becoming a CDE means moving from advocating for capital to governing how it moves.
That requires:
Clear decision-making authority
Functional, engaged governance
Comfort with risk—not recklessness, but fluency
The ability to say no to misaligned deals
Many organizations lead with need and passion.
Reviewers are looking for control and clarity.
Wanting access vs. stewarding capital
Some organizations pursue CDE status because they feel locked out.
Others pursue it because they’re ready to take responsibility for scale.
Only the second group is truly prepared.
Once certified by the U.S. Treasury to participate in tools like the New Markets Tax Credit Program, accountability expands—to investors, regulators, and partners whose expectations may not align with yours.
That shift requires discipline, not just desire.
Five quiet signals reviewers notice
Applications rarely fail because of lack of mission.
They stall because reviewers see:
Authority that exists on paper, not in practice
Supportive boards that don’t govern capital
Pipelines built on possibility, not strategy
Urgency without structure
Caution that reads as fear
These aren’t moral failings.
They’re structural ones.
When “not yet” is the right answer
Not being ready today doesn’t mean you never should be.
Sometimes the smartest move is to:
Strengthen governance
Clarify decision rights
Partner intentionally
Build capacity before taking on complexity
Becoming a CDE too early can weaken an organization instead of advancing it.
Readiness is about sequencing, not speed.
CDE status is an operating model—not a milestone
Strong CDEs don’t treat certification as an achievement.
They treat it as a business model shift:
From projects to portfolios
From permission to responsibility
That transition should come from intention—not exhaustion.
Why this matters now
The organizations shaping the next decade of community investment won’t just be the most passionate.
They’ll be the most prepared.
That’s what I’ll unpack live in my upcoming training.
🔓 Unlocking Capital: How to Become a CDE
Live training with Joy Johnson
📅 January 13 | 12:00pm
🎟 Register:
👉 https://www.eventbrite.com/e/unlocking-capital-how-to-become-a-cde-tickets-1977739134992?aff=oddtdtcreator
Final thought
CDE status doesn’t create credibility.
Credibility makes CDE status workable.
Once you understand that, you stop chasing access—and start building authority.
Bringing several organizations with me tomorrow that are ready.