The CED program provides funding for projects aimed at business development opportunities and creating employment for individuals with low incomes located in geographic areas with a demonstrated need for the proposed project. To accomplish this, the program requires that all created businesses and positions support a service area with unemployment and poverty rates that are at or above the state or national levels. The CED program also seeks to fund projects that address the personal and community barriers that must be overcome to help individuals with low incomes become self-sufficient.
The CED program is built on the premise that nonprofit CDCs know their communities and are poised to efficiently and effectively create new community economic development projects in their communities. The objective of the program is to support businesses that develop new products, services, and commercial activities that result in new positions for individuals with low incomes. These positions should:
- Be ready to implement at the time of award;
- Lead to increased self-sufficiency for individuals and families with low income;
- Create businesses and jobs in low-income communities that improve the livelihood of not only those who obtain those jobs but also the community itself; and
- Attract additional public and private funds to increase investment and quality of life in low-income communities.
CED-funded projects can be non-construction projects that are ready to be implemented at the time of the grant award and completed during the assigned project period. The grant period for non-construction projects is 3 years. It is expected that all non-construction projects support participating business expansion/creation and job creation be completed and CED funds expended within the 3-year project period. Changes in direction in the final year of a project are discouraged. Applicants distinguish projects that are ready to implement at the time of award as projects with evidence in the application such as lending guidelines, sample loan agreements, commitment from identified participating businesses, etc.
Non-construction projects involve limited construction, or alteration and renovation, costing $150,000 or less to support participating business creation, expansion, and/or job creation. Non-construction projects typically involve a loan(s) or equity investment(s) in participating business(es).
Business plans for CED projects that demonstrate they are ready to implement must include a realistic project plan with the following key elements:
- A timeline that clearly demonstrates that the proposed project will be completed and all CED funding expended within the proposed grant period.
- A plan demonstrating that CED funds will be managed consistent with applicable federal regulations, including 45 CFR Parts 75.302 (Financial management and standards for financial management systems) and 75.322 (Intangible property and copyrights), whereas grantees must have control over and accountability for all funds, property, and other assets.
- A proposal demonstrating how grantees will support participating business creation/expansion and job creation.
Applicants proposing non-construction projects must propose to create at least a minimum number jobs using the following formula:
Non-Construction Projects: [Total Amount of Federal CED Funds Awarded] divided by [$20,000] = [Minimum Number of Jobs to be Created].
For example, if a grantee is awarded $800,000 in federal CED funds, it must use that money to conduct activities that will create at least 40 jobs ($800,000 ÷ $20,000 = 40). For a table with examples of the minimum number of jobs based on specific award amounts, see Appendix A: Sample Chart of Jobs Created at the end of this FOA. Note: An applicant's score will not increase by proposing jobs above the required minimum.
CED-funded projects can be construction projects that are ready to be implemented at the time of the grant award and completed during the assigned project period. The grant period for construction projects is 5 years. It is expected that all projects are completed and CED funds expended within the 5-year grant period, and changes in direction in the final year of a project are discouraged.
Construction projects involve construction, or alteration and renovation, exceeding $150,000. Construction projects typically include commercial real estate for lease or use by the gamut of small- and large-scale business operations. The CED program permits facility construction, as needed, to support participating business creation, expansion, and/or job creation.
Business plans for CED construction projects must include a realistic project plan with the following key elements:
- A timeline that clearly demonstrates that the proposed construction project will be completed and all CED funding expended within the proposed grant period.
- A plan demonstrating that CED funds will be managed consistent with applicable federal regulations including 45 CFR Parts 75.302, 75.316, 75.317, 75.318, 75.320, 75.322, and 75.343, whereas grantees must have control over and accountability for all funds, property, and other assets.
- A proposal demonstrating how grantees will use the property for the originally authorized purpose and will not encumber the property without prior approval from ACF. Please note that any encumbrance, (e.g., new financing, refinancing, or extensions of existing loans) with or without a subordination, requires deviation prior approval by the ACF Chief Grants Management Officer before federal funds are used for these purposes. This may delay the facility project.
- Evidence that grantees are ready to begin construction upon award, by including contracts or other third-party agreements with parties involved in the construction.
- A proposal demonstrating how grantees will support participating business creation/expansion and job creation.
Applicants proposing construction projects must propose to create at least a minimum number of jobs using the following formula:
Construction Projects: [Total Amount of Federal CED Funds Awarded] divided by [$25,000] = [Minimum Number of Jobs to be Created].
For example, if a grantee is awarded $800,000 in federal CED funds, it must use that money to conduct activities that will create at least 32 jobs ($800,000 ÷$25,000 = 32). For a table with examples of the minimum number of jobs based on specific award amounts, see Appendix A: Sample Chart of Jobs Created at the end of this FOA. Note: An applicant's score will not increase by proposing jobs above the required minimum.
Note: For the purpose of this FOA, any project with construction activities will be considered a “construction project.” However, prospective applicants are urged to read the federal requirements related to “real property” in this FOA carefully, as those apply to all projects where CED funds are used for construction activities. It is important to note that short-term construction jobs associated with preparing for participating business startup or expansion are not counted when determining the number of jobs created under the CED program, as they are designed to be temporary.
For ACF property-related policy and guidance, please refer to the ACF website at https://www.acf.hhs.gov/grants/real-property-and-tangible-personal-property
GENERAL PROGRAM ELEMENTS
Regardless of the type of project, financial documents must show that all necessary financing is in place and not contingent upon other financing sources, and that signed agreements are in place with the first identified borrower or investment and other project partner(s).
Additionally, CED projects are expected to demonstrate that the project budget includes all CED and non-CED funds needed to implement the project and result in the successful creation of jobs, as outlined in the proposed application. When non-CED financing is required to fully implement the project, evidence must be provided that all capital requirements have been met through financing, cash resources, or in-kind contributions. Additionally, program income, as defined in Section IV.2. Content and Form of Application Submission, The Project Budget and Budget Justification, may be used to demonstrate the long-term sustainability of the project.
However, since CED projects should be ready for implementation at the time of the award, future program income cannot be used to meet the non-CED funding needs for project implementation.
While the focus of the program is on the creation of jobs for individuals with low incomes, as defined by the poverty guidelines published annually by HHS at http://aspe.hhs.gov/povert y/index.shtml, ACF does not expect that 100 percent of the created jobs will necessarily be filled by individuals with low incomes. Often when a business is created or expanded, there is a need to hire high-level managers or other content experts with unique skills and/or experiences that may be more difficult to identify and recruit. For this reason, ACF only requires that a minimum of 75 percent of the newly created jobs be filled by individuals with low incomes. ACF also expects that these jobs will support individuals with low incomes in achieving self-sufficiency, through wages, benefits, and opportunities for career growth.
Note: Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Pub. L. 116-136, for FY 2020 purposes of this FOA, “low-income” will be defined as an individual whose household income level does not exceed 200 percent of the official poverty guidelines, as found in the most recent revision of the HHS Poverty Guidelines published by HHS at https://aspe.hhs.gov/poverty-guidelines.
CED funds may be used for the start-up or expansion activities of participating businesses, as consistent with the cost principles, as implemented in 45 CFR Part 75, Subpart E, provided that the expenditures result in the creation of positions that can be filled with individuals with low incomes. This includes start-up capital for operating expenses, such as salaries, facilities, and equipment that will be replaced by projected earnings. Further, OCS recognizes that many businesses supported with CED funds in the past have been put in jeopardy due to the COVID-19 pandemic. For the purposes of this FOA, job creation efforts include the re-creation or restoration of full-time, full-year positions that were lost due to the COVID-19 pandemic. These flexibilities are only applicable for the FY 2020 funding opportunity announcement. The training and placement of individuals in positions existing prior to the start of the project, even positions guaranteed to individuals with low incomes through a formal agreement with an employer, is not considered job creation.
Many projects use grant funds to provide loans to identified, viable, participating businesses, and/or as an equity or stock investment. Regarding the equity/stock investment, grantees can convey grant funds to third parties to help finance participating businesses creating jobs for eligible program participants. In exchange for a percentage ownership (via stock purchase or equity) specified in a third-party agreement (contract), a participating business receives cash needed to buy, start, or expand a business, provided they agree to specified CED program terms and conditions, including reporting jobs and other benefits to grantees. If there is no third-party business and the grantee is the sole owner of the business creating jobs, funds are typically conveyed to the grantee’s for-profit subsidiary via a loan or purchase of 100 percent of the stock in the participating business. Grant funds can be used to support one or multiple project strategies. However, evidence that identifies the necessity is required for each strategy used. A summary of each of these strategies is provided in the Definition of Terms later on in this section.
Limited incubator development is allowable, as long as the applicant demonstrates the incubator will support participating businesses that demonstrate the financial capacity to create the agreed-upon jobs for individuals with low incomes within the proposed geographic location. For more information on an incubator, see the Definition of Terms found later in this section.
CED grant funds may not be used for:
DEFINITION OF TERMS
- Projects that include the reimbursement of pre-award costs.
- Projects that provide subawards/pass-throughs.
- Projects that use funding to capitalize loan loss reserve funds.
- Project that use funds for loan(s) with balloon payments.
- Projects that use CED funding to provide loan(s), where re-payment of all loans funded with CED funds does not begin during the course of the funded project period.
- Projects that create or expand microenterprise business training and technical assistance centers.
- Projects that focus primarily on job training, job placement, and technical assistance. Limited job training and job placement activities can be supported in the context of modest training that may be provided specifically for the new positions created. For example, funds can be used to train a cashier for a specific position that has been created, but cannot be used to operate a general job training and placement program.
- Projects that do not create new jobs that did not exist prior to the proposed CED project.
The following definitions apply throughout this FOA, and applicants are strongly encouraged to review these carefully prior to submitting an application.
Alteration and Renovation (A&R) - For this opportunity, alteration and renovation of real property is defined as alterations, repair, remodeling, and/or renovation of a building which, when completed, will render the building suitable for the use of the project for which the grant is made. Construction and acquisition is excluded. A&R may classify as major or minor, see major renovation and minor alteration and repair definitions later in this section. OCS grant funds expended for alteration and renovation costs of facilities require filing of a Notice of Federal Interest (NFI). (See also Major Renovation and Minor Alteration and Repair.)
Arm’s-Length - An “arm’s-length” arrangement is with an unrelated third party. Meaning the grantee does not own (i.e., “arm’s-length”) the property in whole or in part. The grantee must fund real-property-related activities via a loan or equity investment with the business partner.
Balloon Payment - A large loan payment agreed upon by the parties and due at the end of a mortgage, commercial loan, or other amortized loan. The balloon payment is not amortized over the life of the loan, and as the remaining balance is the final repayment to the lender. NOTE: As noted in the definition of loan, re-payment of all loans funded with CED funds must begin during the course of the funded project period and balloon payments are not allowed.
Beneficiary - A low-income individual who will directly benefit from the project.
Board Approval - For the purposes of this FOA, Board Approval is a document authorizing the approval of the proposed project by the majority of the Board of Directors in order to ensure the goals and objectives of projects are community-driven and in accordance with community- prioritized needs for job creation. This could be demonstrated through a board resolution, meeting notes, or other written documentation that records the decisions or actions of a CDC Board of Directors.
Board Resolution - Written document recording decisions or actions of a CDC Board of Directors recorded in the minutes of the organization. For the purposes of this FOA, a document authorizing the submission of the CED grant, to ensure the goals and objectives of projects are community-driven and in accordance with community-prioritized needs for job creation, and submitted on behalf of the CDC.
Budget Period - Projects under CED awards are not divided into the typical 12-month intervals known as budget periods. All CED projects have only a single budget period, which is equal in length to the project period.
Capital Assets - As defined under 45 CFR §75.2, “means tangible or intangible assets used in operations having a useful life of more than one year which are capitalized in accordance with GAAP. Capital assets include: (1) Land, buildings (facilities), equipment, and intellectual property (including software) whether acquired by purchase, construction, manufacture, lease purchase, exchange, or through capital leases; and (2) Additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations or alterations to capital assets that materially increase their value or useful life (not ordinary repairs and maintenance).”
Capital Expenditure - As defined under 45 CFR §75.2, “means expenditures to acquire capital assets or expenditures to make additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations, or alterations to capital assets that materially increase their value or useful life.” Please refer to HHS Grants Policy Statement (GPS) II-31 and II-35 for more information.
Community - Any geographic area defined by specific boundaries and the residents, businesses, and institutions within that geographical area.
Community Barriers - Conditions in a community that impede success in employment or self- employment of individuals with low incomes. Such conditions may include the following: lack of employment education and training programs; lack of public transportation; lack of markets; unavailability of financing, insurance, or bonding; inadequate social services such as employment services, child care, or job training; high incidence of crime; substance use disorder; inadequate health care; or environmental hazards such as toxic dumpsites or leaking underground tanks.
Community Development Corporation (CDC) - As outlined in Section 680(a)(2) of the Community Services Block Grant (CSBG) Act of 1981, as amended by the Community Opportunities, as amended, 42 U.S.C. § 9921(a)(2), to be a qualified CDC, an organization must meet three conditions:
- The organization must be a private nonprofit with 501(c)(3) status;
- The organization must have articles of incorporation or bylaws demonstrating that the CDC has a principal purpose of planning, developing, or managing low-income housing or community development projects; and
- The Board of Directors of the organization must have representation from community residents, business leaders, and civic leaders.
Note: The CDC designation does not need to be specified on any official documents as long as the three requirements stated earlier in this definition are met.
Community Economic Development (CED) - A process by which a community organizes its resources and capacities to attract capital to invest in physical, commercial, and business development in order to create job opportunities for its residents.
Construction - Defined as including construction of a new facility(ies) or projects in an existing building that are considered to be construction such as relocation of exterior walls, roofs, and floors. Please reference HHS GPS II-32, Construction/Modernization for more information. Note: Applicants proposing a construction project must provide evidence that they are ready to begin construction upon award by including contracts or other third-party agreements with parties involved in the construction. Also, an NFI must be filed if the project uses CED funding for construction, major alteration and renovation of real property to construct or provide major alterations, or acquisition of a facility or land for the project. The NFI must be filed within 10 business days of the expenditure of funds. See also the definition of Federal Interest. For property a grantee does not own (i.e., “arm’s-length”), the grantee must fund real-property-related activities via a loan or equity investment with the business partner.
Contract - A contract refers to the procurement of goods and services purchased by a grantee for its own use in carrying out the project. The term does not apply to financial assistance awarded to a third-party for the third-party's benefit. (See also Subaward.)
Debt Instruments - Any financial documents that enable the issuing party to raise funds by promising to repay a lender in accordance with terms of a contract. Types of debt instruments include notes, bonds, certificates, mortgages, leases, or other agreements between a lender and a borrower.
Earnings - The net income of the participating business, which is the difference between its revenues, costs, and expenses, as shown on the Profit and Loss Statement.
Eligible Activities - Activities that contribute to the creation or expansion of sustainable participating businesses and full-time, full-year positions within a service area consistent with the cost principles as implemented by 45 CFR Part 75, Subpart E, provided that the expenditures result in job creation for individuals with low incomes.
Employment Education and Training Program - A program that provides employment-directed education and/or training to individuals with low incomes, including Temporary Assistance for Needy Families (TANF) grantees, at-risk youth, public housing residents, displaced workers, persons who are homeless, and other individuals with low incomes.
Equity Investment - The provision of capital to an identified for-profit participating business entity for a specified purpose in return for a share of ownership evidenced by a formal equity investment agreement. This may involve the issuance of stock, as in an equity stock investment. An equity investment may be either in a subsidiary for-profit corporation of the applicant or in an unaffiliated business.
Federal Interest - When used in connection with the acquisition, construction, or improvement of real property, equipment, or supplies under a federal award, the federal interest is a dollar amount that is the product of the following: (1) federal share of total project costs; and (2) current fair market value of the property, improvements, or both, to the extent the costs of acquiring or improving the property were included as project costs. (See 45 CFR 75.2.) Note: For property owned by the grantee, the federal interest in real property does not expire when the project ends. It continues indefinitely although title vests in the grantee so long as the property is used for the originally authorized purpose.
When the real property is no longer needed for the purpose of the original project, grantees (and on behalf of partners) must submit the SF- 429 Attachment C in GrantSolutions On-Line Data Collection (OLDC) system to request disposition instructions from the ACF Grants Management Officer (GMO). (See 45 CFR 75.318(e) and ACF Property Disposition Guidance)
Financial Feasibility/Viability - The component of the business plan demonstrating the financial ability of the grantee to achieve the project's goals of creating permanent, full-time jobs for individuals with low incomes over the project period. Financial feasibility/viability is usually demonstrated using the following documentation: profit and loss forecasts or pro forma, cash flow projections, balance sheets, and sources and uses of funds statements. Financially feasible/viable projects identify and explain earnings, fees, or other sources of revenues sufficient to provide for business operation and maintenance, a reasonable reserve, and debt payment for the purpose of job creation.
Financial Literacy Services - Delivery of information and tools that helps individuals make informed choices with regard to their personal finances. Such services typically focus on budgeting, credit, savings, and other matters relating to a household’s financial well-being.
Financial Strategies - That component of the business plan demonstrating the way(s) in which the applicant will access program capital to fully implement the project at the time of the award, as well as the way the applicant will manage, monitor, and use capital resources to successfully create jobs. It encompasses the quality of systems and skills for accounting, budgeting, financial management, cash and credit management, and control over purchase and inventory.
Full-time, Full-year Position - A non-seasonal position requiring at least 30 hours of work per week. An aggregation of part-time positions to a full-time equivalent is not considered a full- time position.
Grant Award - The funding made available to an eligible organization after a competitive grant application process.
Grant Terms and Conditions - A statement of HHS and ACF regulations and policies, pursuant to federal law, that is attached to the Notice of Grant Award and that sets forth the standard terms and conditions with which grantees are required to comply. Applicants are expected to provisionally sign the Statement of Grant Terms and Conditions as an acknowledgement that the official submitting an application for OCS funding has read and understands the terms and conditions applicable to the project, if awarded funding.
Incubator - A program to help start-up participating businesses flourish by providing support, resources, and business services and advice, normally in one physical location. Incubators that are established without a geographic location in the community are not supported by this announcement. Further, for the purposes of this announcement, limited incubator development is allowable as long as the applicant demonstrates the incubator will support participating businesses that demonstrate the financial capacity to create the agreed upon jobs for individuals with low incomes within the proposed geographic location.
Indirect Costs - Overhead costs of an organization that have been approved by HHS or other federal agencies for use in applying for federal funds.
In-Kind Contributions - These contributions may be in the form of real property, equipment, supplies, and/or other expendable property, or goods and services provided by non-governmental sources directly benefiting and specifically allocated to the project.
Intangible Property - Trademarks; copyrights; patents and patent applications; such property as loans, notes, and other debt instruments; lease agreements; stock; and other personal property ownership acquired with grant funds. Note: Grantees who use federal funding for intangible property or debt instruments must report to the federal government on the continued use of such funds up to 12 years after the end of the project.
Intervention - Any planned activity within a project that is intended to reduce personal barriers or community barriers to employment and can be formally evaluated. For example, job readiness training is an intervention.
Job Creation - New full-time, full-year positions for the project that did not exist prior to the start of the project and came about as a direct result of the investment of OCS funds in project activities, such as development of new business ventures, the expansion of existing participating businesses, or the development of new products and services. Note: This includes the recreation or restoration of full-time, full-year positions that were lost due to the COVID-19 pandemic. These flexibilities are only applicable for the FY 2020 funding opportunity announcement. The training and placement of individuals in positions existing prior to the start of the project, even positions guaranteed to individuals with low incomes through a formal agreement with an employer, is not considered job creation.
Job Placement - Placing an individual in an existing vacant job of a business, service, or commercial activity not related to new development or expansion activity. All jobs supported by the project must meet the definition of new job creation, not job placement. Note: CED funds cannot be used solely for job placement, but limited job placement activities are permitted in the context of filling the newly created positions with employees.
Job Training - For the purposes of this opportunity, training refers to group-based adult education and skill-building activities (e.g., workshops). It does not include consultations or technical assistance that is specifically customized or tailored to the needs of a particular business identified in the project. Note: CED funds cannot be used primarily for training, but limited job training activities can be supported in the context of modest training that may be provided specifically to employees to fill the new positions created.
Land improvements – These are capital expenditures. These may include, but are not limited to, installation of paved areas (e.g., parking lots, sidewalks, etc.), permanent fences, utility conduits, and similar improvements.
Less-than-arm’s-length. A “less-than-arm’s-length” arrangement, according to 45 CFR §75.465(c), is “one under which one party to the agreement is able to control or substantially influence the actions of the other.” According to 45 CFR §75.465(c), “such examples include, but are not limited to, those between:
- Divisions of the non-Federal entity;
- The non-Federal entity under common control through common officers, directors, or members; and
- The non-Federal entity and a director, trustee, officer, or key employee of the non-Federal entity or an immediate family member, either directly or through corporations, trusts, or similar arrangements in which they hold a controlling interest. For example, the non-Federal entity may establish a separate corporation for the sole purpose of owning property and leasing it back to the non-Federal entity.
- Family members include one party with any of the following relationships to another party:
- Spouse, and parents thereof;
- Children, and spouses thereof;
- Parents, and spouses thereof;
- Siblings, and spouses thereof;
- Grandparents and grandchildren, and spouses thereof;
- Domestic partner and parents thereof, including domestic partners of any individual in 2 through 5 of this definition; and
- Any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
An NFI must be filed if CED funding is used for construction, major alteration and renovation of real property to construct or provide major alterations, or acquisition of a facility or land for the project. The NFI must be filed within 10 business days of the expenditure of funds. See also the definition of Federal Interest.
Letters of Support - A signed letter that describes an endorsement of the project from a local or regional government agency or community organization. The letter should describe any specific relationship the agency or organization has to the applicant, knowledge of the applicant's experience and qualifications in business and job creation, and any in-kind or financial contributions to the project, if applicable.
Loan - Money provided to finance an eligible participating business borrower evidenced by a promissory note and loan agreement for a specified purpose to be repaid, with a stated rate of interest and within a specified period. Loans made to eligible participating businesses must be at or below market rate (or what commercial lenders would offer). This includes a distinct loan fund established exclusively for CED projects as a resource for loans, to finance eligible business development and operational activities that, when principal is repaid, is used to make new loans that support a similar purpose. In all instances, the first borrower must be identified along with the standards used for selection. Interest accrued on CED funds must be used to continue or expand the activities of the approved project. See also the definition of federal interest. Re-payment of all loans funded with CED funds must begin during the course of the funded project period and a balloon payment is not allowed. No portion of a loan is forgivable. Note: If the loan is to acquire, construct, and/or renovate real property, the federal requirement related to “real property” and construction project information contained within this funding opportunity apply.
Low-income - Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Pub. L. 116-136, for FY 2020 purposes of this FOA, “low-income” will be defined as an individual whose household income level does not exceed 200 percent of the official poverty guidelines as found in the most recent revision of the HHS Poverty Guidelines published by HHS.
Major Renovation – This involves major renovation (also known as large-scale modernization or permanent improvement; major A&R) of facilities. It includes alterations, renovation, remodeling, improvement, expansion, or repair. It is a structural change (e.g., to the foundation, roof, floor, or exterior or load-bearing walls of a facility, or extension of an existing facility) to achieve an increase in the floor area and/or change the function and purpose of the facility(ies). Please reference HHS GPS II-98, Construction and Modernization of Facilities for more information at https://www.hhs.gov/sites/default/files/grants/grants/policies-regulations/hhsgps107.pdf. An NFI must be filed if it uses CED funding for construction, major alteration and renovation of real property to construct or provide major alterations, or acquisition of a facility or land for the project. The NFI must be filed within 10 business days of the expenditure of funds. See also the definition of Federal Interest.
Minor Alteration and Repair - These are improvements of buildings and equipment that do not meet the definition of major renovation. Minor A&R excludes acquisition and construction.
Microenterprise - A commercial participating business with five or fewer employees, at least one of whom is the owner.
More Experienced Partner - A project partner that successfully meets all of the following requirements: is a CDC, has completed two or more CED projects; has completed one or more projects involving activities similar to the proposed project; and has experience with collaborative programming.
Nonprofit Organization - Any corporation, trust, association, cooperative, or other organization, not including institutions of higher education, that:
(1) is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest; (2) is not organized primarily for profit; and (3) uses its net proceeds to maintain, improve, and/or expand its operations. For this purpose, the term "nonprofit organization" excludes colleges and universities; hospitals; state, local, and federally recognized Indian tribal governments; and those nonprofit organizations listed in Appendix VIII to 45 CFR Part 75 - Nonprofit Organizations Exempt from Subpart E of Part 75.
Notice of Federal Interest (NFI) - A notice of public record that a grantee must file if it directly expends federal grant funds for acquisition, construction, or major alteration and renovation of real property. See also the definition of Federal Interest.
Notice of Award - A legal document given to the intended organization that indicates an award has been made and that funds may be requested from the designated HHS payment system or office; the notice of grant award shows the amount of federal funds authorized for obligation and the budget period for the approved project. Grantees will find this information helpful because it outlines the conditions of their grant awards.
Opportunity Zone - An initiative created in the Tax Cuts and Jobs Act of 2017, to designate economically distressed communities where new investments, under certain conditions, may be eligible for resources leveraged by preferential tax treatment to investors. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service. Opportunity Zones have now been designated in all 50 states, the District of Columbia, and five territories. The U.S. Treasury Department has developed a list of Opportunity Zones that can be found at https://www.cdfifund.gov/Pages /Opportunity-Zones.aspx. More information about the Opportunity Zones initiative is available at https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions.
Participating Business - A business that has been identified as a CED project participant having executed a third-party agreement with the CED applicant to create new, full-time, full- year jobs, at least 75 percent of which will be filled by individuals with low incomes. Proposed jobs are specifically identified in the third-party agreement.
Pass-throughs - Pass-throughs are not permitted under this FOA. A pass-through is an award of financial assistance in the form of money, or property in lieu of money, made under an award by a grantee to an eligible subgrantee or by a subgrantee to a lower tier subgrantee. The term includes financial assistance when provided by any legal agreement, but does not include procurement of goods and services, nor does it include any form of assistance that is excluded from the definition of "award" in this section.
Note: Equity investments and loan transactions are not pass-throughs; these qualify as intangible property and debt instruments. Note: If the note is to acquire, construct, and/or renovate real property, the federal requirement related to “real property” and construction project information contained within this FOA apply.
Persistent Poverty County - A county in which 20 percent or more of the population has lived in poverty over the past 30 years according to the U.S. Census, as determined by the Economic Research Service of the U.S. Department of Agriculture.
Personal Barriers - Those aspects of an individual's personal situation that may impede success in obtaining and retaining employment. Barriers may include factors such as limited education, substance use disorder, insufficient life skills, criminal history, health problems, or disability.
Profit and Loss Statement - Financial report summarizing participating business revenues, expenses, and net income over a specified period of time.
Project - The scope of OCS activities described in the application for federal grant funds pursuant to this announcement.
Project Partner - Any individual, organization, or business entity participating in the project that is not the direct grantee of CED grant funds. Typical project partners include the following: equity investors, donors, a more experienced partner, a wholly owned subsidiary, or a business entity to which the grantee makes an equity investment or capitalizes a loan in support of grant purposes. Note: CED grantees must play a substantive role in the project. A grantee working with a project partner must actively monitor the project and ensure compliance with CED program requirements.
Project Period - The total time for which federal support has been programmatically approved as shown in the Notice of Award (NOA). Non-construction projects will have a 3-year project period. Projects that involve construction will have a 5-year project period.
Promise Zone - Initiative to designate a number of high-poverty communities as Promise Zones, where the federal government will partner with and invest in communities to create jobs, leverage private investment, increase economic development activity, expand educational opportunities, and improve public safety. More information about the Promise Zones initiative is available at https://www.hud.gov/program_offices/field_policy_mgt/fieldpolicymgtpz.
Public Agency Partner - Public assistance and other agencies responsible for administering child support enforcement, TANF, and employment education and training programs (for example, the Department of Labor's One-Stop Career Centers funded by the Employment and Training Administration).
Real Property - Defined by 45 CFR §75.2, means “land, including land improvements, structures and appurtenances [affixed equipment] thereto, but excludes moveable machinery and equipment.” Please also reference HHSGPSII-35, Land or Building Acquisition, for more information at https://www.hhs.gov/sites/default/files/grants/grants/policies-regulations/hhsgps107.pdf. Note: Grantees using federal funding for construction, renovations, or to acquire a facility or land for the project must file an NFI. See also the definition of Federal Interest. The federal share of real property, equipment, or supplies is that percentage of the property's or supplies' acquisition costs and any improvement expenditures paid with federal funds. This will be the same percentage as the federal share of the total costs under the award for the funding period in which the property was acquired (excluding the value of third party in-kind contributions).
Rural Community - For purposes of this FOA, bonus points will be awarded to projects that will create jobs in a rural community with a high rate of poverty, unemployment, or substance use disorder (as defined by the Office of Management and Budget (OMB)), or hire individuals with low income from a rural community to fill positions created. OMB designates counties as Metropolitan, Micropolitan, or Neither. A Metro area contains a core urban area of 50,000 or more population, and a Micro area contains an urban core of at least 10,000 (but less than 50,000) population. All counties that are not part of a Metropolitan Statistical Area are considered rural. Micropolitan counties are considered non-Metropolitan or rural along with all counties that are classified as Neither. For more information on Metro areas, see www.census.gov/programs-surveys/metro-micro.html.
Self-Employment - The employment status of an individual who owns and operates a for-profit business.
Self-Sufficiency - A state of being or status of an individual or family where, by reason of employment, eligibility for public assistance is replaced by the financial capacity to meet all basic needs.
Service Area- The community to be served by the funded project.
Site Control - Documented proof of the applicant's ownership or control of the property where
grant activities will be conducted. Proof of site control includes all of the following documentation: documentation of the specific property location (address, city, state); documentation of a signed and dated deed or lease agreement between the applicant and property owner; or, documentation in the agreement of the terms of the agreement, use of premises, and description of the site (prior use or new property, square footage, use of space for the project).
Social Service Provider - Agencies and/or organizations that work with individuals with low incomes and can assist a grantee with filling the newly created positions with individuals with low incomes. Examples of social service providers include TANF, employment education and training programs (for example, the Department of Labor's Employment and Training Administration -funded One-Stop Career Centers), and local Child Support Enforcement agencies. These partnerships should be documented with signed third-party agreements, such as Memorandums of Understanding (MOUs), letters of commitment, or project partner agreements.
Sources and Uses of Funds Statement - A statement that identifies the committed sources of debt and equity financing and the specific categories of uses of funds associated with each of the sources for the project.
Stock - A share of ownership in a for-profit company. Stocks are sold to investors by a for- profit corporation to raise capital for the start-up and/or expansion of the business. Stock purchases by the grantee/grantee are equity investments. Such investments may be made by grantees in affiliated and non-affiliated businesses.
Subaward - Subawards are not permitted under this FOA. A subaward (also known as a pass-through) is an award of financial assistance in the form of money, or property in lieu of money, made under an award by a grantee to an eligible subgrantee or by a subgrantee to a lower tier subgrantee. The term includes financial assistance when provided by any legal agreement, but does not include procurement of goods and services, nor does it include any form of assistance that is excluded from the definition of "award" in this section. Note: Equity investments and loan transactions are not subawards; these qualify as intangible property and debt instruments.
Substance Use Disorder - This disorder occurs when the recurrent use of alcohol and/or drugs causes clinically and functionally significant impairment, such as health problems, disability, and failure to meet major responsibilities at work, school, or home.
Support Services - For the purpose of this FOA, services provided to the target population that support and complement efforts to obtain economic self-sufficiency. This may include social supports, such as financial literacy training, child care, transportation, substance use disorder treatment, English language education, or job training.
Technical Assistance - A problem-solving service generally using the services of a specialist and specifically customized or tailored to the needs of a particular organization. Such services may be provided on-site, by telephone, or by other means of communication.
Temporary Assistance for Needy Families (TANF) - The federal block grant program authorized in title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (part A of title IV under the Social Security Act), as amended.
Third-Party Agreement - Written and signed agreements between grantees and social service providers, subcontractors, project partners, or other cooperating entities. These agreements must detail the scope of work to be performed, work schedules, remuneration, and other terms and conditions that structure or define the relationship. No agreement can be a subaward for CED funds. The following are examples of common types of third-party agreements for CED projects:
Commitment Letter - A signed letter of commitment that describes the level of financial support for the project made by a third-party (e.g., a lender, investor, donor, or other grantor). Such commitment letters are required if the applicant proposes a project for which non-CED funds (e.g., loans, municipal, federal or state tax credits, equity stock investments, etc.) will be required in order to successfully create the proposed jobs and create and/or expand the proposed business(es). Commitment letters must be signed, specific, and conditioned only on the receipt of the grant award.
Equity Investment Agreement - A written agreement that documents a capital investment by a grantee in a participating business to achieve the purposes of the project as defined in the application. The agreement sets forth the grantee's share of ownership in the business, the terms and conditions related to the use of the invested funds, the rights of the grantee as an equity owner, including, if the business is a corporation, representation on the board of directors, and any provisions for liquidation of the investment. The agreement must include the elements outlined in Section IV.2.Content and Form of Application Submission, The Project Description, Business Plan – Project Implementation.
Project Partner Agreement - A written and signed agreement, entered into by the grantee and project partners, such as a more experienced partner or social service providers that will indirectly spend CED funds and/or create new full-time, full-year positions and/or play another role to help the grantee achieve the purposes of this project. A memorandum of understanding (MOU) with a project partner committing resources or capital is a typical project partner agreement. The agreement must include the elements outlined in Section IV.2. Content and Form of Application Submission, Organizational Capacity.
Underserved Areas - For the purposes of this opportunity, underserved areas are the states and territories that do not have active CED projects.
Resources for prospective applicants will be available at https://www.acf.hhs.gov/programs/ocs/programs/ced under the link titled, “Information for Prospective Grantees."
A pre-application webinar and related materials will be available for viewing on this site no later than 7 days after publication and will be available at https://www.acf.hhs.gov/programs /ocs/programs/ced until the closing of this FOA. The goal of the pre-recorded webinar is to outline the CED program’s purpose and strategies, provide key dates for submitting an application for CED, and review key application criteria and requirements as outlined in the FOA.
Joining and participating in the pre-recorded webinar is voluntary. Only the information provided in this FOA will be presented. No question and answer portion will be conducted during the session. Participants will remain anonymous. Opting not to participate in the webinar will not affect eligibility, application scoring, or the selection process. Applicants will be able to access the recording and transcript on the Program Office website at https://www.acf.hhs.gov/programs/ocs/programs/ced.