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How I stopped worrying and learned to love Community Benefits Plans

This article is the first in a series about Community Benefits Plans, an important component of new government funding opportunities.

Community Benefits Plans can be an important way to engage a community. Other tools include Project Labor Agreements and Community Benefits Agreements.Two people working at a computer together; additional people in the background
Photo Credit: Desola Lanre Ologun via Unsplash

The Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) are historic in many ways – level of funding, for one. But they have also created a new application requirement: Community Benefits Plans (CBPs). (Note: If you're new to thinking about government funding, start with our overview here.)

Even companies with longstanding community programs may experience a “record scratch” moment when they learn about this requirement. What is it? Is it different from what the company already does? How much does it cost?  How is it measured?

For start-ups or companies new to the U.S. who already aren't sure about working with the government, the concept of adding in community relations can feel even more daunting.

But it doesn’t have to be!

Creating a Community Benefits Plan is a chance to set your company up for success in the community, making construction and recruitment easier in the long run.

What is a Community Benefits Plan?

The Department of Energy (DOE) has led the way on rolling out CBP requirements and if you want to take a deeper dive, they have developed robust guidance. Their CBPs typically include four major elements.

  • Engaging communities and labor. Includes demonstrated engagement of local communities and labor groups such as “unions, local governments, Tribal governments, and community-based organizations that support or work with disadvantaged communities.” Stresses the importance of community and labor buy-in as a way to set the project and the community up for success. 

  • Quality jobs to attract and retain skilled workers. The goal is to show how the project incorporates “explicit strategies and actions designed to attract, train, and retain a skilled diverse workforce.” Also emphasizes engagement of hourly workers in health and safety planning.

  • Advancing diversity, equity, inclusion, and accessibility (DEIA). The CBP should address DEIA in the construction phase and for the long-term. Preference is given to companies who locate their site in an area that is moderate- or low-income, has historically disadvantaged populations, or in a location transitioning away from a fossil fuel economy. 

  • Implementing Justice40. Justice40 refers to Executive Order 14008, which requires “40% of the overall benefits…to flow to disadvantaged communities.” This should also inform how programs related to the previous three bullets are implemented.

What do good Community Benefits Plans look like?

A good CBP is well planned, addressing the community’s needs and built with community buy-in. A successful CBP often includes the following five components.

  • Initial needs assessment. When a site is selected, a company should identify the characteristics of a community and needs that might be present. Many companies find the Environmental Protection Agency’s screening tool, EJScreen, to be helpful.

  • Community engagement, trust building, and input. The next step is to identify trusted partners in the community. These can include local government, higher education partners, and community groups. Companies should certainly seek to include groups from disadvantaged communities and the area immediately around the facilities. It may take some time to build trust before the community is ready to engage on a CBP.

  • Plan development. Development of the plan should be done in consultation with with community and its self-identified needs. A portion of the grant money may be used to implement the plan.

  • Implementation. Once implementation is underway, the company should continue to iterate in line with feedback from the community as they deepen their partnerships.

  • Ongoing monitoring and reporting. An old boss of mine used to say, “That which gets measured gets done.” CBPs are no different. Your otherwise amazing project risks a “gotcha” from the government or media if the benefits of the CBP fail to materialize down the road, while a loss of community buy-in can slow project milestones and long-term worker retention.  Ongoing monitoring and reporting ensures that the promises made in the funding application are being kept.

Other engagement tools: Community Benefits Agreements and Project Labor Agreements

CBPs are a part of the funding contract with the government, so there is an obligation to deliver on the plan once funding is granted. The CBPs themselves are not legally binding with the local community, but outcomes of a plan could include legally binding agreements with various community organizations. 

The Community Benefits Agreement (CBA) is one. A Community Benefits Agreement is a legally binding agreement negotiated between a community and the company. The company commits to providing certain benefits to a community in exchange for a community’s support of the project. It’s enforceable in court, providing both sides protection. CBAs go back about 25 years at this point. In fact, the Department of Energy created a whole series of presentations and toolkits about CBAs in 2016 and 2017. They’re well done, and still worth reviewing today -- keeping in mind there may have been some updates in the last several years. Nonetheless, these presentations build on a robust set of literature outlining best practices. and provide a strong foundation.

Project Labor Agreements (PLA) are another common legally binding agreement, this time between workforce and the company. The project labor agreement is an agreement that often includes wages, hours, working conditions, and hiring. They are often negotiated with unions. Because of the Biden Administration’s efforts to strengthen unions, funding opportunities will often specifically encourage Project Labor Agreements.

There are other types of agreements, but they all center on the key four concepts the DOE lists as critical to its CBPs (see above). 

Build on a strong foundation

The rewards of good relationships with the community are self-evident. Yet, there are always risks related to community engagement, especially if you are new to the community or are not familiar with the region and culture. Approaching the community with respect and sensitivity is critical for success. Bringing in Community Benefits Plan experts and/or hiring a local community engagement professional can help you find the right footing from the start. 

Check out the next article in our Community Benefits Plan series for a deeper dive on community engagement.


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