Best Practices: For RCD, Trust and Transparency Earn Strong Returns
For RCD, Trust and Transparency Earn Strong Returns
In the business world, great partnerships rely on trust and open communication. One affordable housing developer exemplifying those values is Resources for Community Development (RCD), a Berkeley-based nonprofit demonstrating that transparency can be good for business.
In recent years, RCD has developed a practice of sharing high-level financial data and strategic plans with close partners in order to build trust, solicit feedback and strengthen relationships. Leaders from Union Bank's Community Development Finance group (CDF) recently attended a lengthy lunchtime meeting with RCD executives, reviewing in detail their financial performance and five-year strategic plan.
That degree of openness shows RCD is serious about rigorous planning and follow-through, said CDF Senior Vice President Jonathan Klein. "We're very impressed when our partners put the same value on transparency and good planning that we do," said Klein, who along with CDF Division Head Annette Billingsley, attended several such meetings with RCD over the years. "Not only does RCD do the hard work of planning, but the fact they're willing to share it with capital partners gives us great faith and confidence in their business."
Founded in 1984, RCD has developed more than 1,800 affordable housing units and operates a housing portfolio serving more than 3,500 residents in Northern California, including more than a third with special needs. Its leaders acknowledge their enthusiastic approach to disclosure may not be widely practiced, but say it's a critical strategy for showcasing the group's strength and explaining to the financial markets how the company operates.
"We want to show our lenders and investors that we have a strong financial presence and anticipate a strong financial future. That's the story we have to tell," said Executive Director Dan Sawislak.
Sharing clear, detailed planning also builds discipline and accountability within the organization, Sawislak said. "We use it as a tool to benchmark what we're doing during the year and to keep us on track. And if we're not on track, we take a look at how we might have to adjust things."
Peter Poon, RCD's chief financial officer, calls the meetings with CDF bankers and other partners a "meeting of the minds," and says they allow his organization to hear valuable feedback they might not otherwise consider.
For all these reasons, the technique is paying off. "RCD has managed to get through the economic slowdown brilliantly," said Klein, citing the group's prudent planning and reliance on steady recurring income rather than less predictable development fees.
Sawislak also voiced optimism about RCD's future. Despite the well-known challenges facing affordable housing development in California, "We are a sustainable, viable organization that is going to be doing this work for a long time to come," he said.