EXECUTIVE SUMMARY Camden Community Income Statement and Balance Sheet December, 1995 Despite a healthy commercial and industrial base, rising incomes and a prosperous economic environment, Camden's historic rootedness and stability appears to be at risk. Though more than $1.2 billion of economic activity takes place in the community, very few of these financial exchanges promote the accumulation of wealth by community members. New ways of encouraging community-owned businesses that would better cycle money through the neighborhood need to be devised. Taking such steps requires concerted action by neighborhood residents, businesses and civic organizations, as well as cooperation from governmental officials and foundations. Strengthening the Camden Community will be best accomplished by building on the assets that already exist: (1) A total of $1.2 billion flows through the Camden economy each year. (2) Of this total, $565 million is earned by 312 commercial and industrial firms hiring about 3,600 employees. (3) Neighborhood residents earn a total of $340 million each year. (4) Eighty percent of the homes are owner occupied, which represents a substantial investment in neighborhood stability. (5) Camden businesses express a great deal of concern for the community. They have accumulated literally thousands of years of experience in doing business in Camden. (6) The community has a strong tradition of neighborhood cohesion and stability. (7) Faced with rising unemployment and elimination of jobs, Camden residents have gone into business for themselves. Self-employment is the only expanding sector of the household economy. Often working at home and watchful of events in the neighborhood, home-based workers also serve as guardians of neighborhood security. (8) A small but productive non-profit sector makes an important contribution in health, early childhood education, and community involvement. Of course, Camden also struggles with limitations and difficulties. Some of these include: (1) Neighborhood aggregate income has dropped 6 percent since 1969, a victim of population loss and the decline of the dollar's purchasing power. (2) The community has little wealth of its own. Public tax systems and economic incentives support the extraction of money from neighborhood residents, not the creation of community wealth. Paying everyday bills for housing and lifešs essentials results in a substantial drain of money out of the community. (3) Homeowners may not actually own a great deal of equity in their homes, although no accurate measurements are available of resident-owned equity. Home loans may draw more money out the community than is returned, since interest payments flow to a secondary mortgage market and are not held in the community. (4) Neighborhood residents appear to spend almost all of their income each year, leaving little for savings. This also frustrates efforts to build community wealth. (5) Neighborhood residents spend an estimated $260 million each year buying essential goods and services outside the community. This is four of every five dollars earned by residents, as much as residents earn in wages and salaries, and causes a severe drain on the local economy. (6) Few non-profit organizations own capital assets. This leaves them with little margin in difficult years. (7) Neighborhood businesses that they find it hard to locate employees from Camden who will be honest and reliable. (8) Security is a strong concern of residents and business people. Camden is also a place of important opportunities: (1) Camden has substantial resources with which it can strengthen itself. The first place to look for effective solutions is within the neighborhood, not outside. (2) At the same time, intervention from the outside  from private citizens, funders and public officials  is also needed. This may best be in the form of assistance that removes obstacles to residents who act on their own behalf rather than as direct attempts to ŗsolve˛ problems. If the neighborhood's unrecognized resources can be more effectively channeled the community can be greatly strengthened. Outside interventions will have only a limited economic impact, though their inspirational impact may be immense. Outsiders need to approach the neighborhood carefully. It may take some time to fully understand the capacities the neighborhood holds. Outsiders must avoid inflicting their own agenda upon local residents. (3) Camden is getting more diverse culturally. This represents a tremendously creative force even if it sometimes engenders tensions. (4) In an era of declining incomes and scarce surplus resources, lowering the costs of living in Camden will be an essential economic development strategy. (5) Transportation offers an important way of conserving costs in Camden. Since one of every five dollars earned by neighborhood residents is spent on transportation costs, creating better transit options will be a useful cost-saving strategy. The Balance Sheet clearly shows that the largest drains on the economy of Camden are: (1) Everyday consumption of essential goods and services (2) Mortgage payments and rent (since distant mortgage firms collect interest and absentee owners seldom cycle rental income back to community) (3) Decline in the dollar's purchasing power (4) Taxes (5) The lack of connection between Camden businesses and local neighborhoods. General recommendations The most lasting neighborhood priorities will be established by neighborhood residents themselves. Any effort to impose answers from outside will only raise new barriers. The recommendations of this report are meant only to stimulate further strategic thinking among neighborhood residents and businesses, and to encourage outside interests to take actions that reinforce the strategies set by residents. The following recommendations are meant only to suggest possible courses of action to Camden residents. Specific strategies will be set by local action committees. Further information about each recommendation will be found in the section beginning on page 72. Recommendation #1: Taking a very long-term view will prove important. Recommendation #2: More established residents must enter into dialogue with newcomers. Recommendation #3: The drain of financial resources from Camden must be reversed. Recommendation #4: If the local economy in Camden does not increase its capacity to create wealth that stays in the community, greater instability will result. Recommendation #5: Weaving stronger community fabrics should be the primary goal of community development programs. Recommendation #6: Only if residents exchange more goods and services with each other will money "take root" in Camden. Recommendation #7: Increasing household income will not by itself be sufficient to increase the self-determination of the community. Recommendation #8: Resident ownership of local businesses and homes is a key strategy for increasing neighborhood security and stability. Recommendation #9: Further clustering of locally-owned firms can help strengthen both existing Camden businesses and new ones. Recommendation #10: Government has an essential role to play. Recommendation #11: Only if residents commit themselves to buy more from local stores can the Camden business climate be improved. Recommendation #12: The Camden Income Statement and Balance Sheet is a useful tool. Recommendation #13: Local data is a key resource for community planning. Specific Proposals: Referring to the recommendations listed above, more specific strategies will be developed by Camden residents and businesses. Some possible courses of action include: Proposal #1: The Camden Business Initiative should explore forming a community business organization with residents and business owners on its board. With no established business organization, it is difficult for Camden community members to form a coordinated approach to economic development. The Camden Business Initiative, which successfully launched the Camden Business Survey, has raised important issues regarding the future of the community business climate. This work has been strengthened by the fact that neighborhood residents have held equal footing with business owners. This collaborative style of organization should be continued. Proposal #2: A directory of Camden businesses should be published. The Camden Business Survey has compiled a wealth of information about community businesses. Publication of a Camden consumers' guide would make these neighborhood firms far more visible and would help residents make better use of local stores. This could also foster new efforts for local residents to buy local, especially in combination with incentives such as discount coupons for local residents. Proposal #3: Home-based businesses should be encouraged Since home-based businesses are the only rising force in the Camden economy, their expansion should be fostered. Code restrictions that serve to reduce the visibility of home-based businesses should be eliminated. Joint Ministry Project's "Community Talents Inventory" may point to viable business opportunities for local residents. In-depth training for emerging Camden entrepreneurs may prove useful. Proposal #4: Increasing barter One of the most straightforward ways for neighborhood residents to develop new community wealth is for residents to increase bartering among Camden neighbors. This can have several positive consequences: (a) this can reduce the costs of living in the neighborhood; (b) this can expand the asset base of the community without a great outlay of cash; (c) this can lead to increased purchases of goods and services from local firms as residents return to addressing their needs using local resources and as they get better acquainted with their neighbors; (d) and importantly, this will also weave closer community fabrics. Proposal #5: Building new gathering places Residents from all groups in the community express a strong need for gathering places where they feel personally and culturally welcome. Such spots may be coffee shops or restaurants or other stores, but customers will feel more of a sense of belonging if these gathering places are locally-owned and designed to fit the spirit of Camden itself. While outside businesses may find a way to help create gathering places, these places must express the spirit and history of the neighborhood, as well as residents' diverse cultures and traditions. Reclaiming the intersection of 42nd and Lyndale as a community focal point given new economic conditions will prove especially important. Proposal #6: Camden parents, neighbors and schools should address the decline of a community ethic of honesty and reliability. Local businesses report they have difficulty finding neighborhood workers who are honest and reliable. This suggests that ethics of reliability need to be assessed by Camden residents. Do community norms adequately convey to young residents the need for responsibility? Are business owners insensitive to cultural needs of Camden residents? Such ethical issues fall within the powers of the community itself. Summary of the Camden Neighborhood Income Statement and Balance Sheet This Income Statement and Balance Sheet is an exhaustive effort to assess Camden's economic capacities. Its purpose is to assist local residents to make strategic choices for the future of their community. Using the best data available, the study offers the first comprehensive overview ever made of cash flows through the community. Essentially, this is a snapshot of economic conditions in Camden as of 1993-94. To show how money flows through Camden, five primary sectors of the neighborhood economy were studied: (1) The Household Sector. The 10,833 households in Camden bring in more than $340 million of revenue each year, and spend the same amount to cover yearly expenses. These day-to-day purchases are the foremost drain of cash away from the community, with an estimated $260 million of this spent outside of Camden. Potentially, resident purchases could become the main engine pumping money to cycle through the Camden economy. (2) The Non-profit Sector. Camden also is home to 8 non-profit corporations with total annual revenues of $4 million. The majority of non-profit income comes from fees for services charged by the Fremont Community Health Service, presumably from residents of the North Side and Camden. Several of Camden's non-profits address regional or statewide issues, but the two largest are focused on local neighborhoods themselves. (3) The Hospital Sector. One major regional hospital, North Memorial Hospital, is included in this study even though its campus lies just outside the Camden Community. Indeed, many neighborhood residents look to Camden as a primary care center, and hospital officials are involved in the Camden community. Annual revenues for the hospital total $186 million. (4) The Business Sector. About 272 commercial businesses (for-profit firms, professional offices, or services) and 40 industrial firms operate within Camden's boundaries, with an estimated annual gross sales revenue of $565 million. Some offer goods and services to neighborhood residents, but local firms report that only six to ten percent of their business is connected to Camden itself. Many of the larger firms serve the entire Metro region and indeed the world. (5) The Informal Sector. Considerable economic activity occurs outside the mainstream economy through informal networks. Though of course no precise data exists, an estimated $218 million of exchanges are made each year. In this sector both legal and illegal trade is included: (a) household care, the feeding, caring, repairing and tending that keep the fabrics of family and community together, (b) barter, such as parents who volunteer to care for each otheršs children, or neighbors who care for each other during a chronic illness, or skilled residents who trade say, carpentry for sewing; (c) illegal drug trade, which appears to be an important second source of income for a few residents, but not of fundamental importance to the neighborhood economy; (d) black market sales of surplus or stolen goods. Additional analysis regarding each of these recommendations and proposals begins on page 72. Summary -- Five parts of the Camden Community Balance Sheet ($ millions) Household Sector Revenue 340 Expenses 340 Net 0 Assets 450 Liabilities 950 Net (500) Non-profit Sector Revenue 13.5 Expenses 13.7 Net (0.2) Assets 12.9 Liabilities 5.0 Net 7.9 Hospital Sector Revenue 186 Expenses 168 Net 18 Assets 161 Liabilities 73 Net 88 Business Sector Revenue 565 Expenses 554 Net 11 Assets ? Liabilities ? Net ? Informal Sector Revenue 218 Expenses 1 Net 217 Assets ? Liabilities ? Net ? Note: Figures in parentheses show losses