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Community based organizations have radically different boards than they did 50 years ago—and New York City has finally noticed. The Department of Youth and Community Development has stopped demanding that 50 percent of a nonprofits’ board live in low-income neighborhoods before considering the group for a grant.

The issue came to a head in mid-August when the department issued a request for proposals to disburse funds from a three-year, $16 million Community Services Block Grant—a federal anti-poverty fund for revitalizing low-income communities.

Many local groups found themselves unable to apply because their board members did not meet the geographic criteria. The requirement is rooted in the definition of “community based organization,” first established by a 1951 state law. While DYCD and its predecessors have long used the guidelines, they were rarely enforced. This year, under new leadership, the agency attempted to adhere more strictly to the law.

“DYCD had the best of intentions here to keep the money in communities,” said one nonprofit executive who declined to be identified. “But these days even small community organizations try to get people with resources and money on their boards to help them.”

David Chan, the executive director of the Chinese-American Planning Council, agrees. Chan said 40 years ago when his organization was founded, all its board members were people from the Chinese community. Few were professionals and most barely spoke English. But the group’s current 24 board members are all college graduates, and many of them are bankers or businessmen from outside the community. “Board members are supposed to give you professional guidance and to raise money to match the government cuts,” said Chan. “The irony is if you follow the old rules they must be poor people.”

In response to concerns like these, DYCD issued an addendum September 15 to eliminate the requirement. DYCD spokesperson Michael Ognibene said via e-mail that his agency recognizes that the nonprofit world has evolved and diversified. Although the rule change isn’t permanent, he said, “there will be flexibility to review issues and consider adjustments.”

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