Self-Help
Martin Eakes, Executive Director
Ellen M. Schloemer, Communications Director
301 W. Main St.
Durham, N.C. 27701
919-956-4480
919-956-4600 fax
E-Mail: info@self-help.org
Web: www.self-help.org

Bonnie Wright and Martin Eakes, who founded this model organization in 1980, started working in the field of poverty by offering technical assistance -- out of the back of a Volkswagen! -- to worker-owned businesses. As many of North Carolina's textile mills were closing and abandoning their communities, Wright and Eakes tried to find ways to save the workers' jobs (which were decidedly not protected by unions) by organizing worker cooperatives to take over the assets of the mills and operate them. It was a rocky road, unfortunately, and their effort lasted only a short time. They concluded that it was almost impossible to develop indigenous leadership when none of the workers had ever been given any training or the opportunity to lead. Furthermore, no capital was available.

So, backing up, they decided that the only way to follow up on the civil-rights gains of the '60s in North Carolina -- and to promote community ownership of production -- was to come up with a plan that could build a sense of ownership and equity through sustainable economic means.

The result, in 1984, was the Center for Community Self-Help, a community credit union that sought to build economic independence in two ways:
     1. Accommodating people's efforts to save, for housing and for starting small businesses.
     2. Making credit available to people who have been unable to get it from traditional banks.

Historically, community credit unions have provided access to credit, particularly in the minority communities. Some predominantly-black communities, particularly in North Carolina's poor, agricultural areas in the northeastern section of the state, have had tiny, minority-owned credit unions for 50 to 60 years. In addition to opening a relatively large community credit union in Durham, Self-Help also provides technical assistance to these small credit unions in a partnership arrangement under which the small credit unions locate and screen prospective borrowers, whose loans are then financed by Self-Help.

Self-Help now operates out of its own building in downtown Durham, a seven-story office building that it uses in part and leases in part to area small businesses and non-profits; it also operates branch offices in six other North Carolina cities. It has made more than 2,300 loans totaling almost $120 million to help minorities, women, rural residents, low-wealth families and others to buy homes, build businesses and strengthen community resources. Despite its focus on low-income borrowers who banks would consider "risky," Self-Help's loan losses total less than 1 percent, comparable to profit-making commercial lenders.

Somewhat restructured since my 1991 visit, the original core organization, the Center for Community Self-Help, is now an umbrella research, policy and development non-profit over two financing affiliates: The Self-Help Credit Union, a state-chartered credit union making home and business loans to low-income families, rural residents, minorities and women; and the Self-Help Ventures Fund, a non-profit that provides "highest-risk" commercial financing to support entreprenurial ventures in those target groups.

Last year, Self-Help wrote $19.3 million in commercial loans to 216 businesses and non-profits, and $6.6 million in home loans to 100 families. Fully 60 percent of its operating expenses are now covered by earned income.

A new venture, the Community Facilities Fund, focuses business lending to child-care providers, recognizing this as an economic-development possibility for many families as well as a way to ensure quality child care for single mothers entering the job market. Another major new project, the Walltown development, a partnership leveraged with a $2 million grant from Duke University, will "gut-rehab" nearly 30 homes in a low-income Durham neighborhood, seeking to revitalize the neighborhood by focusing intensive redevelopment there to provide decent housing for poor families.

Finally, an innovative program created by Self-Help seems to be emerging as a national model, with a pilot program recently authorized by Congress to test its effectiveness in other parts of the nation. This is Self-Help's "Home Loan Secondary Market Program," in which the non-profit uses its resources to purchase "nonconforming" mortgages from banking institutions, taking over the responsibility for existing home loans -- usually written under Community Reinvestment Act pressure -- that the banks consider risky. By taking these purported risks off the banks' hands, the program frees additional money for the banks to use in making more loans to low-income families. Self-Help has purchased mortgages for more than $100 million in North Carolina, allowing an additional 1,800 families to buy their own homes. Now, in October 1997, Congress approved a national home-ownership demonstration program, authorizing $10 million in capital to selected non-profits with home ownership experience, enabling them to implement similar programs.

It is a real pleasure to see this excellent program grown even bigger and better in the seven years since my last visit. President Clinton has declared Self-Help a national model for low-income home lending; and the MacArthur Foundation honored Martin Eakes with a "genius" award in 1996.

The Winston-Salem Journal editorialized thus in 1996: "The job is big. Eakes is small. But then Goliath was big, and David was small. We know how that one came out."

All the feature stories on @GRASS-ROOTS.ORG's pages are reported and written by Robin Garr, a prize-winning journalist who has visited more than 500 innovative grassroots programs in all 50 states since 1990.

Browse his book, Reinvesting In America, at Amazon.com.

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