by Martin D. Abravanel, Nancy M. Pindus and Brett Theodos

Prepared for U.S. Department of the Treasury, Community Development Financial Institutions (CDFI) Fund

September, 2010

The U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund, which is responsible for awarding these credits, contracted with the Urban Institute to complete an evaluation of the NMTC program by 2011. The evaluation must address the fundamental question of whether the program is, in fact, doing what was intended and also inform important policy-relevant questions, such as:

• How, and in what manner, is the program affecting the flow of new private capital to low-income communities?
• With what rates and terms are businesses or organizations in those communities obtaining capital?
• Where, in what timeframe, and how is the capital invested to achieve community revitalization objectives?
• What outcomes are associated with those investments?
• How efficient are NMTCs with respect to these outcomes?

In preparation for designing the evaluation, it is essential to understand not only the NMTC program’s unique legislative and administrative history and its mandate, but its context— i.e., its similarity to, or difference from, other past and present government programs that are also intended to improve the development and economic viability of low-income communities. This includes understanding how such programs have been evaluated and what those evaluations concluded. As a foundation for conducting a NMTC evaluation, therefore, this document reviews the literature on the program as well as that on community and economic development programs more generally.

Evaluating Community and Economic Development Programs: A Literature Review to Inform Evaluation of the New Markets Tax Credit Program. (.pdf)