Rural Areas Reach Out to Donors

New programs aim to combat poverty in small towns

Poverty is most often thought of as an urban problem, but 25 percent more poor people live in small towns or in the

country than in metropolitan areas. Of the 200 counties in the United States that have traditionally been the poorest, 195 are rural — almost all of them in Appalachia, in the Mississippi Delta, on American Indian reservations, and along the Texas-Mexico border.

The boom years of the 1990s made little difference: From 1990 to 2000, the poverty gap between rural residents and those living in or near cities rose in 41 states. The 57 million people who live in rural counties nationwide, or one in five Americans, earn an average of about 70 percent of the amount metropolitan residents do.

For all that need, rural poor people and struggling small towns have traditionally encountered a deaf ear when seeking grants and donations for charities and economic-development plans. A dearth of organizations has made it difficult for foundations to find suitable grant recipients. Tapping local donors — or even finding them — in rural areas has been nearly impossible, short-circuiting well-intentioned efforts to raise charitable donations from within troubled towns and counties.

But in an attempt to steer more philanthropic resources to rural areas, several foundations and organizations have started programs to benefit rural causes and mine charitable wealth, even in poor regions.

Among them:

• The Southern Rural Development Initiative, an organization in Raleigh, N.C., has created a tool to help charities and others search for rural residents who have the potential to make gifts but who have escaped fund raisers’ attention. By collecting federal and state data, as well as information from local residents on pockets of wealth, the Philanthropy Index for Small Towns and Rural Areas of the South is trying to locate potential donors and organize groups of people to seek ways to use charitable donations. In New Roads, La., population 4,966, the prospect-research tool helped fund raisers attract $100,000 with which they will support emergency-aid programs in their town — where one in five people is poor. The index’s creators hope 20 other Southern towns and counties that have used the index in the past two years will soon start their own funds. A similar program, run by the Nebraska Community Foundation, in Lincoln, helps small towns make educated estimates of the amount of wealth that charity leaders and local philanthropies can tap in the next five decades.
• New Ventures in Philanthropy, in Washington, a consortium of national grant makers, has in the past two years made $1.4-million in grants to community foundations and nonprofit economic-development groups in small towns. By making small grants to struggling areas, New Ventures in Philanthropy has helped an old Mississippi River town plan the redevelopment of its historic waterfront, and given a lift to the tourism industry in economically depressed eastern Ohio.
• The National Rural Funders Collaborative, in Dallas, a coalition of 11 national foundations, has made $2-million in grants to spur economic development and improve health services in rural areas during its first two years in existence. The collaborative is now in the third year of a 10-year plan to help start regional foundations and organizations, and to help charities in rural areas expand to deal with the pressing needs of their impoverished regions.
• The Foundation for the Mid South, in Jackson, Miss., a regional grant maker that serves Arkansas, Louisiana, and Mississippi, three of the poorest and most rural states in the United States, has started a program to tap former residents of those three states who have amassed wealth after moving elsewhere. And with help from a $1-million grant from the Ford Foundation, in New York, Mid South has formed a commission to investigate ways to garner more charitable dollars locally, then distribute them to promote racial and economic equality in rural areas.

While changes in government rural policies may be needed to greatly decrease poverty and develop the economies in sparsely populated areas, such new programs have the potential to narrow a philanthropy gap that is as old as many of the struggling rural towns, say nonprofit leaders.

Rates of giving in poor rural areas are typically higher than those in places with a large percentage of high-income people, but that generosity does not often translate into riches for charities. Because many people in rural areas give primarily to churches, relatively little goes to other organizations that work to alleviate poverty.

Thirty-two of the country’s 40 most-generous counties were in rural areas, according to a Chronicle analysis of tax returns, income data, and giving statistics (The Chronicle, May 1). Over all, people in rural parts of the country give more to charity but less to secular causes than people in urban areas, the Chronicle study found.

The dearth in giving by residents of rural cities and towns has hardly been rectified by foundation grant making. National foundations have typically given about half as much per capita to rural causes than to causes in metropolitan areas, according to some studies. A Southern Rural Development Initiative study found that the 12 Southern states contain 34 percent of the nation’s poor people, but receive only 14 percent of foundation assets.

“Foundations measure success by how many people their grants serve,” says Rick Foster, a vice president at the W.K. Kellogg Foundation, in Battle Creek, Mich., which annually makes more than $20-million in grants to programs that specifically focus on rural problems. “Urban areas have the attention of the media and the foundations, most of which are located in cities. The dispersed population in rural areas effectively hurts the people there when it comes to grants.”

A Paucity of Charities

But grant makers who may be looking to support rural organizations may not be able to find them. People in rural areas might be more likely to help one another, but less inclined to organize groups, says Karl M. Stauber, president of the Northwest Area Foundation, in St. Paul.

“There’s this romantic image of rural communities, that they have less institutional structure and more impetus to help each other — it’s the barn-raising metaphor,” says Mr. Stauber, whose foundation will spend more than $150-million over the next 10 years in an attempt to reduce poverty in 16 rural regions. The foundation was unsuccessfully sued last year by one group in rural Washington state after it pulled its grants, citing a lack of cohesiveness among towns and organizations there. “There’s a lot of social capital there, but it hasn’t translated into philanthropy.”

Some organizations have taken it upon themselves to start new groups. The Southern Mutual Help Association, formed in New Iberia, La., in 1969, has expanded from its initial mission of protecting the rights of people working in south-central Louisiana’s sugar-cane fields to ending poverty in rural Louisiana, where 18 percent of the population is poor, nearly 30 percent more than the statewide average. The group has started affiliates that now oversee scholarships for low-income students, a dental clinic, and a loan fund so that people with moderate incomes can buy homes. In addition, the group has brought together leaders of other local charities in an attempt to aid rural development throughout the South.

“We never looked at it as starting organizations,” says Lorna Bourg, executive director of the Southern Mutual Help Association. “We’ve just done what we’ve needed to do.”

Small Awards

Elsewhere, grant makers have attempted to help existing charities. A $100,000 grant from New Ventures in Philanthropy offers hope that charities in poor rural areas in Missouri will grow bigger. The grant, made to the Ozark Foothills Regional Planning Commission this year, is being used to create community foundations in nine regions in the Ozark Mountains. Once the fledgling foundations have at least $50,000 in their accounts, the commission will encourage them to make grants in small towns that don’t have many big charities, says Greg Batson, executive director of the Ozark Foothills Regional Planning Commission, in Poplar Bluff, Mo.

“Even small grants of a few thousand dollars can be a great help in these areas,” says Mr. Batson. “With a little money, towns can tear down old houses, start cleanup efforts, and open parks.”

Similar to the Create Foundation, in Tupelo, Miss., which has helped start 16 community foundations in rural northeastern Mississippi, the Ozarks program is also designed to help small towns kick-start their stalled economies. A community foundation in Ste. Genevieve, Mo., started with the help of the New Ventures grants, has been greatly aided by an anonymous gift of $350,000. The town, once a popular riverboat stop that now is home to 3,000 people, may use some of its newfound philanthropy to develop tourism to aid its economy.

The Foundation for Appalachian Ohio, in Athens, has used part of $200,000 in grants made by New Ventures in Philanthropy to encourage the development of birding trails and to promote the area’s historical and natural assets. The grants have also helped link the community foundation to other grant makers.

“We had had no conversations with other foundations in the region,” says Leslie Lilly, president of the Foundation for Appalachian Ohio. “By having these grants, we were able to have talks that led us to amass some philanthropy here.”

New Ventures’ strategy of reaching economic planning groups and rural community foundations mirrors that of the National Rural Funders Collaborative. By making small grants to community-loan funds, nonprofit economic-development corporations, and community colleges that improve job skills, the collaborative hopes to help turn around local economies, says Jim Richardson, executive director of the National Rural Funders Collabora-tive. The group’s $2-million in grants have encouraged regional grant makers and private donors to give an additional $5.7-million to rural causes, he says.

“Our focus is to build wealth in low-income rural communities,” says Mr. Richardson. “You can’t do that without getting regional funders to sustain these efforts.”

Tapping Former Residents

While trying to garner donations and grants locally, one regional foundation has recently started a program to raise funds from a previously untapped group: former residents who live many miles away.

The Foundation for the Mid South, which has taken on rural causes because of studies that show that the overwhelming majority of Southern philanthropy goes to cities, such as Atlanta and New Orleans, has turned to Southern “expatriates.” The foundation held a fund-raising event in Chicago last month to gather former residents of the South who belong to clubs that celebrate their heritage. Beverly Divers-White, vice president for programs, says the foundation is hoping that some expatriates will start their own philanthropies geared toward helping the South, or create donor-advised funds that benefit groups that attempt to reduce rural poverty.

“It’s necessary for the health of these areas to make these groups grow stronger,” Ms. Divers-White says. “We don’t even have United Ways in most of these places.”

In addition to starting new fund drives, the foundation also provides logistical help to its grantees that use the Southern Rural Development Initiative’s index, a tool Ms. Divers-White believes can lead to the reinvigoration of long-downtrodden areas.

Joanna M. Wurtele, a charity volunteer and donor in New Roads, La., and its surrounding parish, Pointe Coupee, says that the index, and the town meetings its introduction prompted, have given the region new hope that it can overcome some of its longstanding racial and class tensions. “We’re finding that a little bit of encouragement, money, and inclusion can make a big difference in our lives,” she says.

Other regional foundations, such as the Blandin Foundation, in Grand Rapids, Minn., have made improving the local economy their sole focus. Because of the layoffs of thousands of people from paper mills and other industries based on natural resources in rural Minnesota, Blandin used its entire $17-million grant-making budget this year to encourage the development of small-scale businesses and environmentally friendly forestry practices that make wood products more attractive to buyers. The foundation’s redoubled approach to rural areas, which was announced nearly a year ago, includes more grants to promote public policies that benefit impoverished rural regions.

More Advocacy Money Sought

Some experts on rural econ-omies say that making grants to antipoverty programs won’t be nearly enough to solve small-town problems.

Foundations might make more of a difference by supporting policy programs that promote rural planning and social justice, says Cornelia B. Flora, director of the North Central Regional Center for Rural Development, a research organization in Ames, Iowa. Because large corporate interests, primarily agricultural ones, exert significant influence on land-use and rural-policy issues, Ms. Flora says, foundations can play a part in making sure that policy makers hear more voices.

“They can help people become part of policy debates that affect where they live,” says Ms. Flora, who points to a program in California’s Central Valley that aims to organize immigrants into groups that advocate for better schools and jobs.

The Humboldt Area Foundation, in Bayside, Calif., has made $330,000 in grants this year to support advocacy in a four-county area of Northern California — a timber region where seasonal unemployment can be as high as 80 percent and where many children regularly suffer from anemia because their families cannot afford to buy enough food to give them proper nutrition. The grants were made to hold meetings of residents, leaders, corporations, environmentalists, and others to talk about the best use of the region’s land. “We’ve gotten ourselves in the middle of this because it often means more to get everyone together than it does to sprinkle grant money around elsewhere,” says Peter H. Pennekamp, executive director of the foundation.

The meetings have yielded recommendations that will be forwarded to county governments. “We have a unified economic strategy now, something that’s been missing here for some time,” says Mr. Pennekamp.

But he warns about the limits of philanthropy in rural areas.

Because national growth patterns have tended to make many rural areas economically marginal, and rural policy as developed by governments tends to favor the interests of large agricultural, forestry, and mining companies, doling out grants in the traditional manner may not improve things, Mr. Pennekamp says.

“Until we see a recognition of the importance of rural policy,” he says, “rural philanthropy will always be little more than the few pennies grant makers have left on the side.”