FACTORS INFLUENCING THE PERFORMANCE OF COMMUNITY DEVELOPMENT CORPORATIONS SPENCER M. COWAN* University of North Carolina at Chapel Hill WILLIAM ROHE University of North Carolina at Chapel Hill ESMAIL BAKU Neighborhood Reinvestment Corporation I n recent years, the number of community development corporations (CDCs) has increased dramat- ically, doubling in the decade between 1985 and 1995 to an estimated 2,000 to 2,200 organizations nationwide (National Congress for Community Economic Development [NCCED], 1989, 1995). These organizations typically maintain close ties with one or more low-income neighborhoods and work to improve the physical, social, and economic conditions in their service areas (Stoecker, 1997; Vidal, 1992). As federal dollars dedicated for housing and community development declined from their peak levels in the 1970s, CDCs sought and competed for capital from more diverse sources, including Community Development Block Grant (CDBG) and HOME programs, local financial institutions, and private foundations. CDC activity has expanded beyond the traditional focus on housing and business development into human services, community empowerment, and building social capital (Rohe, 1998; Stoecker 1997; Temkin & Rohe, 1998). While this is consistent with the original concept of CDCs as organizations that take a comprehensive approach to community problems, the expansion of their activities places even greater demands on their resources. Almost certainly, the available resources will remain inad- equate to meet all community problems, heightening the need for CDCs to use their limited resources efficiently. We know that there is great variability in CDC performance. Some have done admirably well while others have foundered. However, we know little about the factors that result in effective and efficient CDCs. Understanding what contributes to the success of CDCs is complicated by their dual goals of increasing both the economic and the social capital of their service areas. The impact of efforts to improve economic conditions may be reasonably quantifiable, while attempts to measure increases in social capital are still evolving (Temkin & Rohe, 1998). The purpose of this study is to determine the factors that influence CDCs’ efficiency in generating economic investment within their service areas. Using data from NeighborWorks organizations through- out the United States, we will propose a measure of efficiency and then identify the factors that affect *Direct all correspondence to: Spencer M. Cowan, Department of City and Regional Planning, CB #3140, University of North Carolina, Chapel Hill, NC 27599. E-mail: spencer2@email.unc.edu JOURNAL OF URBAN AFFAIRS, Volume 21, Number 3, pages 325–340. Copyright © 1999 Urban Affairs Association All rights of reproduction in any form reserved. ISSN: 0735-2166.