Measuring the true impact of New Markets Tax Credits (NMTCs) is not an easy task. However, the Community Development Financial Institutions Fund (CDFI), which administers the NMTCs program, requires that applicants explain how they will measure overall impact if they receive an NMTC allocation. Therefore, having specific and effective means to measure the impact of NMTC projects is critical, both as you prepare your application for NMTCs and carry out projects under existing NMTCs. Here are three ways to improve your impact assessment for NMTC program developments.
- Conduct Pre- and Post-Development Assessments – One good measure of the success of a project is to utilize both pre-and post-development assessments. A pre-development assessment can help you determine your expectations for the project or what you hope to accomplish. By including data on existing economic, employment, and poverty conditions in the community, you can forecast how your project is expected to change those conditions. After your project is complete, you can then conduct a post-development assessment to measure the project’s actual outcome. Finally, you can compare the projected outcomes with the actual outcomes.
- Supplement Quantitative Data with Qualitative Data – While quantitative data is easier to gather than qualitative data, gathering both types of data can give you a clearer picture of the true impact of an NMTC project. For instance, you can easily count the number of jobs created from a new development in a neighborhood. However, you also may be able to measure other indirect impacts of the development by interviewing neighborhood residents about other financial beneficial impacts that they have seen since the development has occurred.
- Include Third-Party Data Along with Your Own Data – CDFI initially asked NMTC applicants to describe the methodology they would use to measure potential outcomes of their proposed projects. As time went on, CDFI now requires that applicants support each projected outcome with clear and sound methodologies and metrics. Starting in 2019, CDFI advised applicants that their applications would receive higher scores if they obtained metrics or data from third-party sources rather than relying on their own data.
Let’s Get Together to Talk About Your Next Deal
Savage & Associates is an economic development law firm designed to provide clients with the legal and business insights to grow, revitalize, and build their communities. We use individualized strategies for our clients, ranging from large public companies to burgeoning entrepreneurs, to determine the best strategy for achieving their goals.
We are experienced in using New Markets Tax Credits, Low-Income Housing Tax Credits, C-PACE, Historic Tax Credits, and other investment options to help developers, investors, nonprofit organizations, and entrepreneurs change their communities. Our unique qualifications allow us to devise unique plans to carry out your objectives and work toward improving your communities. You can get started today by contacting our offices at 215.880.9441 in Philadelphia or 202.817.3941 in Washington D.C. Set up a session with us to discuss your ideas and learn more about the opportunities that may be available to you. You can also find Savage & Associates online 24 hours a day, seven days a week, for more information about our services.