Holy Owned Subsidiaries

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By last June, Rev. Mary Kendricks knew the drill at the monthly general assembly meetings of Harlem Congregations for Community Improvement. As a representative from one of the 96 member churches and mosques, she would come to hear about upcoming events, new housing developments, expanded social services. Someone might mention a training program for the unemployed. It was all interesting, but for Kendricks it wasn’t enough.

She had more immediate needs. The 50-member congregation of her First Grace Baptist Church, located in the Bradhurst section of north central Harlem, was looking to buy the storefront building they rented from the city. And Kendricks, whose husband is the church’s pastor, had visions of turning a nearby vacant lot into a community center to provide child care and after-school programs for the neighborhood.

When discussion at the meeting turned to an upcoming tour of newly developed HCCI apartments, Kendricks grew exasperated. “I didn’t want to see a building. I wanted a building of my own,” she says now, with a slight laugh. So she spoke up and told the 20 assembled members that the needs of small churches like hers were being overlooked. “The churches are hurting,” she said. “They need help.”

She found a receptive audience. HCCI was formed 12 years ago by 40 Harlem clergy with an ambition to bring back Bradhurst, a particularly devastated stretch of Central Harlem. Under the leadership of the forceful Rev. Preston Washington, HCCI had become a “superchurch” itself, running 1,300 housing units, a $1.7 million HIV/AIDS education and housing program and an array of other services on a multimillion-dollar budget. It had become a powerhouse in Harlem, and a growing number of HCCI’s pastors, eyeing the explosive growth, were wondering what exactly they were getting for their time, volunteers and fundraising.

Kendricks didn’t know it that morning, but the organization had already begun struggling with this question. HCCI’s board of directors, working with Washington, had just started a two-year strategic planning process that many expect will change the very nature of the organization.

HCCI is not expected to shrink in any way. The goal is to help member churches do their own social service and development work: Call it the community development version of devolution. But just like federal devolution, the implications are unclear. Some funders have cast doubts on their willingness to support HCCI’s new order, and just how HCCI plans to share its resources–in other words, money–with the member churches is still very much in question, Washington says.

“If push comes to shove and at the end of the day–after this two-year strategic plan is due–they come back with, ‘Let’s throw the money back at the churches,’ I’m out of here, because I know what that is going to mean,” he says. It would mean HCCI would be moving out of the development business and, essentially, into the funding business. The logistics would be a nightmare.

“Who do you give it to? How do you create the criteria? You’re talking about 90 churches,” Washington says. “I would have to make up my mind if I want to be around for that because I will not sit here and watch the demise of this agency. Not that it is going to happen. But it is a possibility.”

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Although HCCI boasts that it is not dominated by one church or pastor, Washington is the organization’s public face and has been since its founding. His leadership has helped build HCCI into one of the largest organizations of its kind in the city–and made him one of Harlem’s most recognizable and busiest men. “Someone said to me recently, ‘Preston, remember that you work for God. When did you ever think you’d replace God from his throne?'” he says ruefully.

Washington grew up on East 99th Street in El Barrio and attended a storefront church as a child, one that he says was demolished in an urban renewal project pushed by nearby Mt. Sinai Medical Center. He earned a doctorate in education from Columbia University’s Teachers College, and since 1976, he has been Senior Pastor at Memorial Baptist Church on 116th Street, a church he runs with his wife, Rev. Renee Frances Washington. A founder of HCCI, he became chairman of the board of directors in 1988. In 1991 he became president and CEO.

From the beginning, HCCI had a guiding star in the Bradhurst plan, an ambitious blueprint for redeveloping a 32-square-block section of north central Harlem that was home to one of the largest concentrations of abandoned city-owned buildings in New York. The plan called for the creation of 2,000 housing units–half for low- and moderate-income residents and half to bring in new middle-income residents–as well as new social services and economic development programs.

Initially, former Mayor Edward Koch was lukewarm on the idea. Only after HCCI joined with six other local groups to create a new Harlem housing developer, the Consortium for Central Harlem Development (CCHD), did he consider it. Koch okayed the plan as one of his last official acts.

Then David Dinkins took office. The city backed the plan to the hilt under the administration of Harlem’s favorite son, paying the entire $24 million bill for the first building phase and chipping in 70 percent of the second phase’s $30 million price tag. (The remainder was made up through bank financing and low-income tax credit deals.)

Today, HCCI runs the buildings CCHD built or rehabbed under the Bradhurst plan alongside an impressive range of service programs, including Alcoholic Anonymous meetings, an extensive after-school program, workshops for youth, and computer training, English as a Second Language and GED classes. From a staff of two with a budget of $100,000 less than eight years ago, HCCI now has 90 full- and part-time employees and a $3.5 million annual budget. And that is up from $2.4 million as recently as 1996.

As HCCI’s projects grew, so did its membership, a collection of congregations that ranges from famous Harlem institutions like Wyatt Tee Walker’s Canaan Baptist Church of Christ–a mandatory Sunday morning stop for aspiring local politicians–to tiny storefront operations that don’t even own a fax machine. Despite a few high-profile congregations, the majority of HCCI’s members are small and mid-sized churches with tight budgets. But as HCCI grew bigger and more successful, members big and small began to wonder if it was also growing out of control.

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It’s a cold December morning and Paul Dunn, HCCI’s vice president for health and human services, is taking a group of clergymen and women down memory lane at their monthly general assembly meeting. Having been bumped out of their usual meeting space by construction expanding the HCCI Family Life Center on 153rd Street, they are finishing their breakfast of eggs, grits, sausage and potatoes in the cafeteria of St. Matthew’s Baptist Church.

“This is where we got started, 12 years ago. We have now come full circle,” Dunn says, ebullient. “HCCI has been very good at building. HCCI needs to do more in terms of empowering member congregations to provide services.” The crowd of 20 members eagerly take it all in. After all, this is what many of them had been lobbying for.

For the last two years, the board brought the topic up regularly. “I think that this is going back to the roots of HCCI,” says Rev. Robert Castle of St. Mary’s Episcopal Church, a founding member of the board. “And unless [HCCI] does keep its roots and is supportive of the local congregations, it’s hard for it to justify its role.”

After years of low-level grumbling, the issue boiled over at the summer 1997 board meeting. “We had grown like Topsy,” maintains Canon Frederick Williams, chair of HCCI’s board since 1988 and rector of the Church of the Intercession at 155th and Broadway. “We were like a big gangling adolescent–all hands and feet. People were beginning to throw money at us. Finally, the board had to say to Dr. Washington, you may not accept any more grants until you are clear about what you are able to do.”

Washington was initially taken aback by the demand. “My reaction was that it was an absurdity,” he says. “They had to really pull my coat, as the kids say in the street, and say, listen, Preston, this is not the way you want to go.”

Washington says the group’s explosive growth was fueled in part by financial concerns. Late payments to their housing program repeatedly jeopardized the group’s ability to make payroll and continue its social service programs. “It was a long process of drawing down the money,” he says, “and a few times we almost didn’t survive.”

To keep cash flowing, HCCI began to apply for more and more grants–each with their own projects and paperwork. They were providing all sorts of services to the community, but the internal infrastructure couldn’t handle the unchecked growth. Payroll was still done manually, and staff was having trouble keeping up with so many competing demands.

Outside forces were also pushing for change. The Bradhurst plan was no longer bringing in the same level of support under Mayor Rudolph Giuliani, who initially committed only $5 million to the $13.5 million third phase-largely middle-income condominiums. The administration has since reduced that commitment to $2.6 million. Moreover, HCCI is no longer working with-or, reportedly, even communicating with-its development partner, CCHD.

And the housing business in general is much tougher these days. Good city-owned land is getting scarce, and HCCI must now compete with well-funded private developers. “There is only so much more housing that we can do here in Harlem,” says Greg Watson, the group’s vice president for real estate. “It’s just a matter of time before [no] more land will be available.”

As housing opportunities diminish, HCCI will have to scramble for funding. Until now, it has raised most of its budget through development projects; even $800,000 of the social services budget comes linked to the Bradhurst plan. HCCI officials say there’s no crisis–the group has $5 million in project reserves to fund social service initiatives and other reserves to maintain its buildings–but clearly budget meetings have a new urgency.

A plan to give more responsibility to HCCI’s church members could help both sides of the ledger. HCCI, presumably, would be running fewer programs in-house, reducing costs. And banks and foundations could support HCCI’s new work. Faith-based development and organizing is one of the latest trends in the foundation world, and Washington observes that others have already started to cash in on the trend. “They are all saying that they are working with the independent black church and that is bullcrab. They’re using the names of these churches because they know the foundations are looking for broad-based coalitions,” he says. “There’s no meaningful participation in any of it.”

At the end of 1997, facing shrinking resources and an agitated board, Washington applied for a $150,000 strategic planning grant from the Neighborhood 2000 initiative, a $10 million fund run by a coalition of 35 community development grantors. “HCCI’s hodgepodge of service delivery programs, a sprawling staff growth, and a general ‘stop gap’ approach to social engineering is no longer an acceptable efficient model,” the group’s proposal read in part.

The money came through last spring, and HCCI immediately began a two-year planning phase. They’ve hired a prominent strategic planning firm, Dudley Hamilton Associates, and convened a 17-member committee of board members, staff, tenants, churches and program participants. Washington characterizes the process as something that he “cannot control,” and indeed, neither he nor board chair Williams is on the committee.

As the word spreads in Harlem about HCCI’s new direction, the attitude is wait-and-see, even among observers that hold the group in high regard. “The cynical view is that this is just a showcase to put people in place so the group can look good,” says one veteran Harlem activist, who asked not to be identified. “A more generous idea is that they’ve gone back to their roots and are working with people that they always should have been helping.”

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The Faith Pentecostal Apostolic Healing Temple occupies a storefront painted white with red trim, a bit of color on an otherwise nondescript block of White Plains Road in the Gun Hill section of the Bronx. Inside, Rev. S.A. Banton welcomes the congregation for the daily “fasting service” into the sanctuary, where 100 or so wooden chairs, a drum set, a few guitars and a pulpit await. In the corner, the U.S. and Jamaican flags stand side by side.

A few dozen boxes of food–everything from canned fruit to pasta sauce–sit downstairs in the hall by Banton’s office, a reminder that the church’s Christmas dinner for more than 200 local homeless families is a week away. In addition to providing spiritual guidance, Banton and his wife oversee the church’s food pantry, soup kitchen and clothing drives.

One of 23 small churches that signed on with HCCI in the last six months, Banton’s ministry joined in October at the suggestion of a minister-friend from Harlem. “He [thought] that HCCI would be able to help me to obtain a bigger space,” Banton says. He’s hoping to find money for a larger kitchen, an expanded dining room for the soup kitchen, and space for a day care program.

Faith Pentecostal funds its services mostly through Sunday collections. Banton set up a nonprofit corporation last year but so far he has received only one grant–$800 from the United Way for supplies for the soup kitchen. The city and United Way gave a total of about $14,000 in food donations last year, but Banton says those programs are year to year. The church takes in between $4,000 and $5,000 a month in collections. About $1,500 goes to rent and utilities, another $2,000 pays for Banton’s weekly Christian radio show. “We struggle,” he says.

Faith Pentecostal is the rule rather than the exception when it comes to New York City’s small churches, observers say. “Their biggest need is financial,” says Dr. Roy Bryant, founder and president of Christian Federation, Inc., a coalition of 15 small churches and Christian ministries in the Bronx and Harlem that joined HCCI last year. “They need to house themselves; their rent is expensive. Some would like to buy buildings or to renovate or to build a food pantry.”

Many of the larger HCCI institutions, like the Canaan Baptist Church of Christ, have technically skilled middle-class members and up-and-running housing projects and social service programs. But the smaller congregations dominate HCCI’s membership, and these are, by and large, independent Baptist and Pentecostal churches without a religious network to provide resources or give advice. “These pastors have been pastors for 20 years, and they have never done any administrative work,” First Grace Baptist’s Mary Kendricks says. “A lot of them don’t even know what tax-exempt is.”

The larger churches say they are committed to helping out their struggling brethren. “Those that have ought to help those who do not,” says Rev. Lenton Gunn, pastor of St. James Presbyterian Church, a stately, mostly middle-class church near City College. “It makes us all stronger. If the smaller churches can grow and become providers, then it means that our communities are better.”

The need is clear. Small churches are on the first line of social service for much of Harlem. “When we give out food, the line goes out around the corner. When we give away clothes, people fill the place up,” says Kendricks. “We do a lot in that little church.”

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Although the strategic plan is still a year and a half away from completion, HCCI has begun to find new ways to serve its members. Since last spring, the group has held three workshops on grant-writing for its clergy and helped more than a dozen congregations apply for grants. And in September, HCCI hired Kendricks to reach out to pastors and figure out what they need.

As new churches like Banton’s join HCCI looking for help, the enormity of the job ahead is becoming clear. “We are being inundated with requests for help,” admits Watson. “But we don’t have the capacity to assist at the level that is probably required at this time. We are now in the process of identifying funding that is necessary to do that.”

“It’s an enormous task,” says Gary Hattem, managing director in the community development group at Bankers Trust, a lead sponsor of the Neighborhood 2000 fund. “Whether resources can be galvanized to do that job, I don’t know. You have to make sure you are not just providing technical assistance, but are enabling people to do this on their own.”

HCCI’s brass recognizes that finding new funding sources for small churches will be a major task in the coming years. Many funders have grown comfortable with HCCI as a centralized agency. “Ultimately, it is up to HCCI to do what they want,” says James Shipp, an assistant program officer at the Local Initiatives Support Corporation (LISC), which has given nearly half a million dollars to the group in grants and lines of credit. “We have had a great success with HCCI, and we hope that it continues. We obviously cannot provide the same funding to 20 or 30 churches.” He adds that, given the choice, LISC would prefer to work with one entity.

Washington doesn’t argue the point. “That is a legitimate, central concern of this strategic plan,” he says. “God knows, we don’t need a million and one organizations with limited capacity or none competing for limited dollars. The real trick to this whole thing, so to speak, is how do we convince all the players that this may not be your time for this thing? Or maybe you should do this in collaboration? And HCCI may need to take a back seat for getting funding for itself to help another congregation.”

Washington and his lieutenants have one ace in the hole–the funders that increasingly recognize and underwrite the growing movement toward faith-based organizing and development. Certainly the success of time-tested programs at institutions like Rev. Calvin Butts’ Abyssinian Baptist Church in Manhattan and former Congressman Floyd Flake’s Allen AME in Queens have convinced more banks and funders to invest in church work. “We think that faith-based institutions play a central role in the community and want to help build that potential out there,” says Mark Willis, president of the Chase Manhattan Foundation, which has committed $1 million in $25,000 faith-based community development grants over three years.

Even so, HCCI’s leadership suspects that this will not be enough, and is trying to come up with new ways to raise cash outside the foundation world. Watson suggests that the agency may need to create for-profit businesses, like a supply company or a property management firm, to meet the financial needs of the organization in the coming years.

No one denies the task ahead is a big one. Washington is rested–in January he completed a two-month sabbatical from the agency–and says he is ready for anything. “Most agencies wouldn’t bother with this,” he asserts. “Most agencies would say, ‘Let’s make our agency stronger. Let’s build an empire.’

“We didn’t take that route. We took the more altruistic route,” he says. But he adds that the strategy is not without risk. “We may be opening up a Pandora’s box.”