Community Development Entities (CDEs): How Overlooked Communities Can Anchor Wealth, Not Just Projects
Joy D. Johnson
For too long, community development has been measured by projects completed instead of wealth retained.
A new housing development here.
A renovated building there.
A small business opened—then quietly closed a few years later.
These efforts matter. They improve lives in the short term. But they rarely change the underlying economic reality of the communities they are meant to serve.
And that’s because projects don’t build wealth—ecosystems do.
This is where Community Development Entities (CDEs) fundamentally change the equation.
The Difference Between Doing Development In a Community and Building Wealth For One
Traditional community development models often position local organizations as intermediaries—assembling deals, securing grants, complying with rules, and passing capital through layers of institutions that ultimately control the terms.
CDE status flips that dynamic.
When an organization becomes a CDE, it is no longer simply responding to opportunity.
It becomes an anchor institution within a capital ecosystem.
That distinction matters.
CDEs can:
Shape how capital enters a community
Decide which projects get prioritized
Align investments with long-term community goals
Build relationships with investors who think beyond one-off deals
Instead of chasing fragmented funding, CDEs help orchestrate capital flows in a way that strengthens local ownership, local businesses, and local leadership.
Why CDEs Are Critical for BOTH Urban and Rural Communities
Urban and rural communities are often framed as fundamentally different.
They aren’t—at least not when it comes to capital.
Both face:
Chronic underinvestment
Limited access to flexible financing
Extractive development models
Decision-making power concentrated elsewhere
A rural town losing its hospital and an urban neighborhood losing its grocery store are symptoms of the same problem: capital that passes through but never stays.
CDEs offer a mechanism to anchor capital locally.
With CDE status, organizations can:
Finance mixed-use developments that support small businesses
Support community-owned real estate
Invest in healthcare, food access, childcare, and workforce infrastructure
Leverage New Markets Tax Credits to make “unfinanceable” projects viable
The geography may differ—but the strategy does not.
From Transactions to Generational Impact
Here’s the most important shift CDEs enable:
They move communities from transactional development to generational strategy.
Instead of asking:
“How do we fund this project?”
CDEs ask:
“How does this project fit into a long-term wealth-building plan?”
That plan might include:
Retaining ownership of commercial assets
Supporting minority-owned and locally owned businesses
Recycling capital back into future projects
Building balance sheets—not just completing developments
This is how communities stop starting over every funding cycle.
This is how momentum becomes permanence.
A Midwest Example: When the Project Succeeds but the Power Structure Doesn’t Change
The redevelopment of Findlay Market in Cincinnati is often cited as a success story—and rightly so.
A historic public market was stabilized.
Small and immigrant-owned vendors gained improved infrastructure.
A long-disinvested neighborhood gained a renewed economic anchor.
But like many successful projects in under-resourced communities, the outcome raises an important question:
Who controlled the capital strategy?
In most cases, neighborhood-based organizations are not the entities certified to deploy capital. They work within frameworks designed elsewhere, competing with projects across an entire city or region for limited allocation authority.
The project succeeds.
But the power structure does not change.
This distinction matters.
When capital decisions are made outside the neighborhood, local priorities are filtered through external underwriting standards, external timelines, and external definitions of risk. Even strong projects must wait, compete, or compromise to move forward.
Why Hyper-Local Organizations Must Become CDEs
This is why Community Development Entity certification is so critical for neighborhood-based organizations.
CDE status is not about cutting out partners.
It is about changing the center of gravity.
When hyper-local organizations become CDEs, they move from being beneficiaries of capital decisions to authors of them.
They no longer ask:
“Will this project fit into someone else’s pipeline?”
They begin asking:
“How do we sequence capital to achieve our neighborhood’s long-term vision?”
Citywide and national CDEs will always play a role. But when all capital flows through them, neighborhoods remain structurally dependent—even when projects succeed.
CDE status allows neighborhood organizations to originate deals, align investments with community plans, and retain influence long after ribbon cuttings fade.
The Opportunity in Front of Us
At a moment when federal, state, philanthropic, and private capital are all searching for impact, communities cannot afford to remain structurally sidelined.
CDEs are not a silver bullet.
But they are a powerful lever.
They allow communities to:
Sit at the capital table
Speak the language of investors without losing their mission
Design development that lasts beyond one grant cycle
Most importantly, they allow communities to own their future—financially and structurally.
Join Me for a Live Training
Unlocking Capital: Why & How Your Organization Can Become a Community Development Entity (CDE)
📅 January 13, 2026
🕛 12:00 PM
📍 MidTown Tech Hive
6815 Euclid Avenue
Cleveland, OH 44103
👉 To RSVP, Click Here
What’s Next in This Series
In the next article, I’ll explore who should seriously consider becoming a CDE—and who shouldn’t, including:
Common myths about eligibility
What scale actually matters (and what doesn’t)
How neighborhood organizations can partner without surrendering control
How to assess readiness before applying
Because becoming a CDE isn’t about checking a box.
It’s about choosing to lead differently.
Brilliant breakdown of how CDEs shift the power dynamic from being capital recipients to capital orchestrators. That Findlay Market example really nails it because even when projects workwell, if the neighborhood org isn't certified to deploy capital, they're still structurally dependent on external decision-making. I saw similar patterns in a Chicago food hub initiative where local success didn't translate to longterm financial autonomy. The shift from asking "will this fit someone else's pipeline" to "how do we sequence capital for our vision" is huge for breaking those cycles of starting over every grant period.