New Markets Tax Credit Communication for Economic Development and Public Finance Agencies: Making a Complex Tool Understandable

The New Markets Tax Credit program occupies a distinctive and often underappreciated position in the community development finance landscape. It is one of the most powerful federal financing tools available for projects in low-income communities, capable of generating substantial below-market financing for projects that would otherwise be financially infeasible or would require the stacking of multiple smaller incentives to achieve similar economic impact. And it is, consistently and across virtually every market where it operates, one of the least publicly understood tools in the development finance ecosystem. The projects it finances are visible: community health centers, small business lending facilities, manufacturing expansions in distressed areas, mixed-use commercial developments in underinvested corridors. The mechanism that made those projects possible is typically invisible to the communities in which they occur, to the local officials who support them, to the business community that could potentially use them, and even to many practitioners in the broader economic development world.

This invisibility is not incidental. It reflects a genuine communication failure that has persisted because the program’s structure is legitimately complex, because the organizations that administer it, Community Development Entities, have historically had limited communications capacity, and because the federal agency that oversees it, the Community Development Financial Institutions Fund, has prioritized program integrity and allocation competition over public communication about what the program does and why it matters. The result is a program that has deployed billions of dollars of financing into low-income communities with remarkable programmatic integrity but with almost no public communication commensurate with its scale and community impact.

For state and local economic development and public finance agencies, the communication challenge around NMTCs is not primarily about explaining how the program works to the sophisticated developers and investors who already use it. It is about ensuring that the program is understood by the broader audience of stakeholders whose support, cooperation, and engagement make NMTC-financed projects possible and whose understanding of what those projects represent affects the long-term political and community sustainability of the program. This audience includes community members who live near NMTC-financed projects, local elected officials who must vote on related approvals, nonprofit leaders and community development practitioners who might direct projects toward the program, and journalists whose coverage shapes public understanding of what these investments mean.

This article examines how economic development and public finance agencies can communicate about New Markets Tax Credits in ways that make this complex tool genuinely understandable to community stakeholders, nonprofit developers, local officials, and potential partners, without sacrificing the accuracy that the tool’s technical complexity demands.

Why NMTCs Are So Difficult to Explain

The New Markets Tax Credit program’s structural complexity is not incidental but essential: it is the product of a financing mechanism designed to channel private investment capital into markets that private investors would not otherwise reach, at economics attractive enough to actually attract that capital, while achieving a community benefit that justifies the federal tax expenditure that makes the mechanism work. Each element of that design objective requires specific structural choices that, together, produce a tool whose operation involves multiple entities, multiple layers of compliance, a specific sequencing of transactions, and a set of tax concepts that are not intuitive even to sophisticated practitioners outside the NMTC space.

The structure involves a Community Development Entity that allocates NMTC authority, an investor who receives tax credits in exchange for an equity investment in the CDE, a sub-CDE structure that channels the investment to a specific project or business, a leveraged loan that is combined with the equity investment to create the total financing available to the project, and a deep-discount loan from a lender to the CDE that allows the CDE to offer below-market rates to the ultimate borrower. The tax credits themselves are claimed over seven years, the compliance period extends seven years from the initial investment, and the economics of the structure depend on interest rates, credit pricing, and investor tax capacity in ways that produce deal structures that look different in different market environments and at different points in the interest rate cycle.

For a community member trying to understand why a community health center in their neighborhood is receiving favorable financing, or for a local elected official trying to understand what they are approving when a project requests a city land disposition, the structural complexity described above is not the information they need. They need to understand what the program produces, at what cost to the public, and why the specific project being discussed represents a good use of the mechanism. The structural explanation is not the public communication; the outcome explanation is, and most NMTC communication fails because it organizes itself around the former rather than the latter.

The vocabulary of NMTC transactions is a second specific barrier that compounds the structural complexity. Qualified Active Low-Income Community Business, Substantially All Test, Qualified Low-Income Community Investment, Community Development Entity, and similar terms are essential to technical NMTC compliance documentation and have specific legal meanings that matter enormously in deal execution. In public communication, however, these terms function primarily as barriers: they signal that the communication was written for technical practitioners and not for the community audience it is nominally addressing, and they require translation into plain language before any general-audience communication is actually serving its purpose.

The Multiple Audiences That NMTC Communication Must Serve Differently

New Markets Tax Credit communication fails consistently when it attempts to serve all audiences with a single document organized around program structure, because the information each audience needs and the language in which they need it differ significantly enough that no single document optimized for one audience serves others well. Recognizing this and designing audience-specific communication for the most important NMTC audiences is the foundational design decision for an effective NMTC communication strategy.

Community members in or near NMTC-financed projects need to understand what is being built or financed, what community benefit it provides, who will have access to it, and what the mechanism that made it financially possible contributed to those outcomes. They do not need to understand CDEs, leverage structures, or seven-year compliance periods. A two-paragraph description of a specific project, the problem it addresses, and the financing tool that made it possible is the appropriate community-audience NMTC communication for most project contexts, supplemented by an opportunity to ask questions through a genuine community engagement process.

Local officials who are being asked to support NMTC-financed projects, whether through land disposition, regulatory approval, or complementary public investment, need slightly more substantive understanding of what the program is, why it produces below-market financing rather than grants, what the public cost is in terms of federal tax expenditure, and what the specific project they are being asked to support represents in that context. A one-page plain-language NMTC explainer, supplemented by a project-specific summary that answers the questions a local official would ask, serves this audience better than either a full program description or a simple project announcement without context.

Nonprofit developers and community development practitioners who might direct projects toward NMTC financing need more substantial program knowledge, including the types of projects and borrowers that typically use NMTCs, the deal economics that make NMTC financing attractive relative to conventional alternatives, the transaction costs and complexity that affect whether NMTCs are the right tool for a specific project, and how to identify and engage a CDE that might allocate credits to their project. This audience needs a practitioner-level introduction that goes further than the community communication but stops well short of the technical compliance documentation that NMTC transactions require.

Journalists covering economic development and community investment need factual accuracy, a clear public benefit framing, and enough structural understanding to write about NMTC-financed projects without significant error. They also benefit from a journalist-specific resource that describes common misconceptions and the accurate correction for each, because NMTC coverage frequently includes structural misunderstandings, such as the characterization of tax credits as direct government grants, that accurate journalism requires avoiding.

Explaining the NMTC Mechanism Without Losing the Audience

The core communication challenge of the New Markets Tax Credit program is explaining a mechanism that is genuinely complex in a way that a non-technical audience can understand well enough to evaluate its community benefit without needing to understand every structural element. This requires making specific choices about what to explain, what to summarize, and what to acknowledge as technically complex without making its complexity the centerpiece of the explanation.

The most durable plain-language NMTC explanation strategy frames the program around the problem it solves before introducing the mechanism that solves it. The problem is clear and widely recognized: private capital does not flow to low-income communities at the rates or on the terms that would support the commercial, manufacturing, healthcare, and community facility investment those communities need. The explanation of why is straightforward: investors expect returns that reflect risk, low-income markets are perceived as higher risk, and the combination of perceived risk and limited market data about actual performance in these markets produces a persistent capital gap. The NMTC program addresses this gap by offering investors a federal tax benefit that compensates for the reduced financial return they accept by investing in a CDE that channels capital to low-income markets. The tax benefit makes the economics work for the investor; the CDE directs the capital to community-benefit projects; the borrower, the community facility or small business, receives below-market financing that makes their project financially feasible.

This explanation does not require mentioning CDEs by their technical name, does not require describing the leverage structure, and does not require explaining tax credit pricing. It answers the question that a community member or local official actually brings to NMTC communication: why is this program here and why does it produce the benefit it claims? The answer is: because private capital does not flow here on its own, and the federal government created a tax incentive that makes it financially attractive for investors to provide below-market financing to projects in underinvested areas. The program works because it aligns private investor interest with community benefit, not because the government directly subsidizes the project.

The specific financial benefit produced by NMTCs in a given project is the concrete outcome that public communication should anchor to whenever possible, because numbers make abstract mechanisms real. A NMTC-financed project might produce a specific number of percentage points below market interest rate, saving the borrower a specific dollar amount in interest cost over the financing period, and making a project feasible that would otherwise require a larger grant or an additional fundraising campaign that might have delayed or prevented the project. Stating this specific financial impact in plain language, as part of every project-specific NMTC communication, gives community audiences and local officials the concrete evaluation basis that structural descriptions do not provide.

Project Case Studies as the Foundation of NMTC Communication

Project case studies are the most powerful communication tool available for making NMTC financing understandable to community and non-technical audiences, because a specific project that can be described in concrete terms, visited, observed, and evaluated makes the abstract mechanism real in ways that program descriptions cannot. An agency or CDE that maintains a library of project case studies, each describing a completed NMTC-financed project in accessible terms, has a communication asset that serves virtually every audience and virtually every communication purpose relevant to the program.

A good NMTC project case study for community and non-technical audiences covers six elements: what the project is and where it is located, described in terms any reader can evaluate; what need it addresses, described in terms of the community problem the project solves; what it would have cost without NMTC financing and why that would have been a barrier to the project’s feasibility; what the NMTC financing provided, in terms of the below-market rate or the financing gap it bridged; what community benefit has resulted, stated in specific and measurable terms; and how a reader can learn more about whether similar financing might be available for comparable projects. Each of these elements answers a question the relevant audience actually has, in language they can evaluate without technical expertise, and together they make the program comprehensible through a specific, observable example rather than through structural description.

Case studies should be written from the perspective of the community benefit rather than from the perspective of the deal structure. A case study that leads with the project’s QALICB status or the leverage structure before describing what the project does and who it serves has organized itself around the program mechanics rather than the public value, which is the opposite of what community-facing communication requires. The deal structure, if mentioned at all in a community-audience case study, should appear as context for understanding how the financing was assembled, not as the frame around which the story is organized.

A case study library built around diverse project types, neighborhoods, and borrower profiles serves the additional function of demonstrating that the program is accessible for a wider range of projects than any single example communicates. A library that includes community health center financing, small business lending facility financing, manufacturing expansion financing, and mixed-use commercial development financing, each in a different geographic context and with a different borrower profile, communicates by example that the program is not limited to a specific project type or a specific market, which is the question practitioners and potential users of the program most often have when they encounter it for the first time.

Using Borrower Voice in NMTC Communication

The most credible source of NMTC project communication is not the agency or CDE that structured the financing. It is the borrower who used it and the community members who benefit from the project it financed. A community health center CEO who can describe in plain language what NMTC financing made possible for their organization, what the financing terms looked like relative to what they had been able to access previously, and what difference having the facility has made for the patients it serves, is providing a form of NMTC program communication that no agency narrative can replicate in terms of authenticity and emotional resonance.

Agencies and CDEs that systematically collect borrower testimonials, with the borrower’s permission, and use them in program communication materials, on websites, in annual reports, in presentations to local officials, and in media materials, are building a communication asset whose credibility derives from its source rather than from its sophistication. The community health center CEO is not a NMTC technical expert. They do not need to be. Their description of what the financing made possible, in plain terms, is more useful to a community audience and a local official audience than a technical explanation of the leverage structure, precisely because it communicates the program’s value proposition through the experience of the people it served.

Communicating NMTC in Local Planning and Approval Contexts

NMTC-financed projects frequently require local government approvals, including land disposition decisions, zoning changes, conditional use permits, and complementary public investment, and the communication that occurs in these local approval contexts significantly affects both the project’s success and the community’s understanding of the program. Local planning and approval processes are attended by community members, covered by local media, and reviewed by elected officials who may have very limited prior knowledge of NMTC financing, and the communication that accompanies these processes determines whether the project is understood as a community benefit or as a private financial transaction that happens to be occurring in a low-income neighborhood.

Project-specific communication for local approval processes should lead with the project’s community benefit, describe the financing mechanism in accessible terms, be honest about who is investing and what financial return they are receiving, and address predictable community concerns about displacement, access, and long-term benefit directly rather than hoping those concerns will not be raised. A community presentation that presents a NMTC-financed project only in terms of its financial structure and compliance requirements, without clearly describing what the project does and who benefits from it, is not serving the community’s information needs and is creating a communication vacuum that more alarming narratives will fill.

Local officials who are being asked to vote on a project that involves NMTC financing deserve a one-page brief that explains, in plain language: what the project is, what the NMTC program is and what it does, why this project qualifies for NMTC financing, what the federal tax expenditure involved is and how it produces a community benefit, what the city is being asked to do in support of the project, and what the expected community benefit is. This brief is not a technical document; it is a communication document designed to give an elected official who may never have encountered the program before enough understanding to vote informedly and to answer constituent questions afterward.

Connecting Nonprofit Developers and Community Organizations to NMTC Opportunities

One of the most important and most underserved NMTC communication audiences is the community of nonprofit developers, community development corporations, and community health and social service organizations that operate in low-income markets and that are exactly the kind of borrowers the program was designed to serve, but who may not know the program exists, may not know whether their projects qualify, or may have heard about NMTCs from a distance without ever having received the accessible explanation that would allow them to evaluate whether pursuing NMTC financing for a specific project is worthwhile.

Communication targeted at this audience should answer the four questions they most need answered: can my project use NMTCs, how do I find out if it qualifies, what do I need to do to pursue it, and is it worth the effort given the transaction complexity involved. Each of these questions deserves a specific, honest answer. Projects that use NMTCs are typically those that generate revenue, because NMTC financing is structured as a loan to a Qualified Active Low-Income Community Business, and the loan must be repayable, which means pure grant-funded projects or projects whose revenue does not cover operating costs may not be appropriate NMTC borrowers. Projects should be in or substantially serving low-income census tracts as defined by the program. The process of pursuing NMTCs involves identifying a CDE with available allocation, working with the CDE to structure the financing, and managing a transaction process that takes significantly longer than conventional financing. Whether the effort is worthwhile depends on the project’s financing gap and the degree to which below-market debt would change the project’s financial feasibility.

Connecting nonprofit developers to CDEs that work in their market and that are interested in their project types is the most practically useful communication an economic development agency can perform for this audience. A directory of CDEs active in the state or region, with descriptions of their investment preferences, geographic focus, and how to initiate a conversation about a potential transaction, gives nonprofit developers the entry point they need into the CDE network rather than leaving them to identify and approach potential CDE partners without guidance. Periodic convenings that bring together nonprofit developers and CDE representatives in an informal setting where potential projects and financing relationships can be discussed lower the transaction cost of the initial CDE-borrower conversation and accelerate the development of the project pipeline that drives NMTC deployment in any given market.

Strategic Communication Support for Economic Development and Public Finance Agencies

New Markets Tax Credit communication is challenging for most economic development and public finance agencies because the program’s complexity requires both technical accuracy and communication accessibility, and the organizational capacity to achieve both simultaneously in the same material is genuinely unusual. Agencies that prioritize technical accuracy produce materials that are correct but inaccessible to the community, official, and practitioner audiences they need to serve. Agencies that prioritize accessibility produce materials that are readable but occasionally imprecise in ways that create misunderstandings about the program’s structure and the nature of the federal investment it represents.

Building the communication capacity to achieve both technical accuracy and genuine accessibility requires a process that involves both NMTC practitioners who can ensure accuracy and communication professionals who can ensure accessibility, working together on materials rather than sequentially. The practitioner writes the technically accurate version; the communicator translates it; the practitioner checks the translation for accuracy; the communicator revises for accessibility; the cycle continues until both standards are met. This process is more time-intensive than either party working alone, and it produces materials of higher quality than either working alone would produce.

Stegmeier Consulting Group (SCG) helps economic development and public finance agencies build NMTC communication programs that serve community members, local officials, nonprofit developers, and journalists with the specific information each needs, organized around community benefit and real project examples rather than program mechanics. That support may include community-facing NMTC explainer development, project case study development, local official briefing materials, journalist resource guide development, nonprofit developer program access guide development, CDE-borrower convening strategy, and outcome communication frameworks that document NMTC program impact in terms accessible to community audiences.

The goal of this work is a program that is understood in the communities where it operates, used by the borrowers it was designed to serve, supported by the local officials whose cooperation its projects require, and documented in ways that demonstrate its community impact to the public audiences who need to understand what their federal tax investment is producing.

Future Trends in NMTC Communication

The New Markets Tax Credit program has operated for over two decades with periodic reauthorizations, and each reauthorization cycle brings renewed attention to the program’s community impact evidence, its equity dimensions, and its relationship to other community development finance tools that have emerged alongside it. Communication that positions the program accurately within this evolving policy landscape will be more durable than communication that treats the program as a static tool whose design and policy context are settled.

Community benefit verification and reporting requirements for NMTC-financed projects are expanding, driven by both programmatic evolution and by growing public and legislative interest in demonstrating that federal tax expenditures produce community benefits that justify the cost. Agencies that have invested in outcome documentation frameworks will be better positioned to meet these expanding requirements than those that have not, and the documentation they produce will also serve their public communication purposes by providing the specific, verifiable community benefit evidence that makes NMTC program communication credible rather than aspirational.

The intersection of NMTCs with other emerging community development finance tools, including Opportunity Zone investment and various state-level NMTC programs, creates new complexity in explaining the financing structures behind specific projects but also creates new communication opportunities around the concept of incentive stacking: the practice of combining multiple tools to achieve financing that is more community-beneficial than any single tool could produce. Communication about incentive stacking, framed around the community outcomes it enables rather than the technical complexity it involves, helps audiences understand why complex multi-layered financing is sometimes the most community-responsive approach rather than an unnecessarily complicated one.

Racial equity and anti-displacement dimensions of the NMTC program are receiving increasing attention in both policy and communication contexts, driven by growing recognition that community development finance tools can either reinforce or undermine racial equity in community investment depending on how they are structured, targeted, and governed. Communication that honestly addresses these dimensions, including both the program’s potential to support equitable investment in communities of color and the ways in which without intentional equity focus it can produce investment that benefits developers and investors more than existing community members, positions agencies as thoughtful stewards of a powerful tool rather than as advocates for a program whose community equity implications they have not examined.

Conclusion

The New Markets Tax Credit program deserves a communication standard commensurate with its community impact potential and its public cost, and it has not consistently received one. The programs that have been most effectively communicated, that have the strongest community understanding and political support, are those where the implementing CDEs and partnering agencies have invested in making the program understandable to the audiences whose cooperation and engagement it requires, through plain-language explanation, real project case studies, honest discussion of the program’s limitations alongside its benefits, and systematic connection of nonprofit developers to the CDE relationships that make program access possible.

Building this communication standard requires treating NMTC communication as a program function rather than a marketing afterthought, investing in the process that produces materials accurate enough for technical audiences and accessible enough for community ones, and maintaining a library of case studies and outcome documentation that makes the program’s community benefit visible to the audiences who need to see it. The program is complex. The communication does not have to be.

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Economic development and public finance agencies need New Markets Tax Credit communication that makes a technically complex program understandable to community members, local officials, nonprofit developers, and journalists without sacrificing the accuracy the program’s structure demands. That means audience-specific communication organized around community benefit rather than program mechanics, real project case studies with borrower voice, local official briefing materials that answer the questions elected officials bring to NMTC-adjacent approvals, nonprofit developer access guides that explain qualification and access pathways, and outcome documentation that makes the program’s community impact visible in specific and verifiable terms.

SCG helps economic development and public finance agencies build NMTC communication programs that serve the program’s full range of audiences with the specific information each needs. Whether your agency needs community-facing explainers, project case studies, official briefing materials, nonprofit developer guides, or outcome documentation frameworks, SCG can help you build a communication program that makes this powerful tool understandable and its community impact visible.

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