Foundations Urged to Do More to Aid America’s Rural Regions

Missoula, Mont.

Foundations could help alleviate many of the nation’s most pressing problems by focusing more on the challenges and opportunities of rural America, said speakers at a conference on rural philanthropy here this month.

While such regions receive fewer philanthropic dollars than urban areas, the nation’s rural areas have been hit hard by some of the issues that top the country’s policy agenda — access to health care, immigration of low-wage workers, the need for better schools, and the loss of industrial jobs.

“There are a whole lot of folks out there in what looks like this very simple or idyllic world that are struggling like crazy to keep their families’ heads above water,” said Karl Stauber, former president of the Northwest Area Foundation, in St. Paul, who just became president of the Danville Regional Foundation, in Virginia.

Mr. Stauber said attention to rural areas is critical because they often serve as bellwethers of economic issues that affect American society at large. For example, he said, farmers were among the first to feel the impact of increased global competition.

“In many ways, that economic transition in rural America started 15 to 20 years before many of the folks in urban America started to wake up to it,” he said.

About 180 foundation leaders and others attended the conference, which was sponsored by the Council on Foundations and Sen. Max Baucus, the Montana Democrat who chairs the Senate Finance Committee. Senator Baucus wants foundations to increase their giving to rural areas such as his home state.

Steve Gunderson, president of the council, urged participants to think of ways to increase giving overall, rather than at the expense of urban areas — for example, by tapping into the huge transfer of wealth that many economists expect to take place over the next 50 years as people die and leave their estates to their heirs.

“I don’t think we solve this by redistributing philanthropy from an urban area to a rural area,” he said. “Our job has to be to grow philanthropy across the board.”

While speakers emphasized the needs of rural regions, they also highlighted ways those areas can serve as laboratories for innovative projects.

For example, Brad Crabtree, a program director at the Great Plains Institute, in Minneapolis, said the fight against global warming presents rural areas with an “unprecedented economic opportunity,” because they can be a major source of alternative energies such as wind power and ethanol.

He added that North Dakota is home to the world’s largest project to capture carbon dioxide from a power plant and store it rather than release it into the atmosphere.

“Philanthropy can play a major strategic role in expanding rural America’s capacity to respond to this energy and climate challenge,” Mr. Crabtree said.

John Molinaro, an associate director at the Aspen Institute, a think tank in Washington, urged foundations to help rural areas develop new economic-development strategies.

He said the predominant strategy now — trying to win the “Toyota lottery,” providing economic incentives to entice industries to rural areas — is not effective and should be replaced by one of developing local businesses with strong ties to the area, which would be less likely to move.

In an age of “big box” stores and other business models that operate on a large scale, rural areas also need to band together to plot their economic futures, he said.

“Rural communities that are trying to go it alone and not focusing on a regional strategy are pretty much doomed to failure,” he said.

Several speakers highlighted barriers that make it difficult for rural nonprofit groups to get grant money — for example, an emphasis by some foundations on “metrics,” or the need to demonstrate impact by assessing how many people were helped.

“When we think about impact, it’s more than just population, more than just numbers. This kind of trend only goes to exacerbate the kind of problems we’re facing,” said Mario Gutierrez, director of an agricultural health program at the California Endowment, in Los Angeles.

Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy, in Washington, said a new report by his organization recommends that grant makers measure their influence in ways that are more appropriate to rural areas — for example, “the breadth and depth of impact achieved by serving entire communities, counties, and even regions that would otherwise go unserved or underserved.”

The report, “Rural Philanthropy: Building Dialogue From Within,” also suggests that grant makers send their staff members on more visits to rural areas and pay for events that bring urban foundations and rural nonprofit groups together.

“People fund people they know,” Mr. Dorfman said. “Relationships matter.”

Another study that was released to coincide with the Montana conference found some evidence, albeit from a small sample, that awareness of rural issues is growing among foundation officials.

The Center for Rural Strategies, in Whitesburg, Ky., updated a survey it conducted in 2004 of 50 grant makers on the state of foundation giving to rural areas. The new survey, based on 10 recent interviews, said many of those interviewed were optimistic that giving to rural areas would increase, partly because of recent attention to the issue by the Council on Foundations.

However, that optimism has not yet translated into dollars, according to the report: “Most note that the overall funding situation has not really changed in the past few years.”

Senator Baucus, speaking during a conference lunch, renewed his plea for foundations to double their grants to rural areas within five years.

Mr. Baucus first issued that challenge at the council’s annual meeting in Pittsburgh last year, saying rural areas were being shortchanged when it came to philanthropic dollars. The council responded by working with him to set up the Missoula conference.

“I understand that each foundation has particular funding guidelines, regions of focus, and priorities,” Mr. Baucus said. “But I encourage foundations to work hard to make rural places a priority.”

The senator asked foundations to do four specific things:

• Work on rural projects with other foundations, nonprofit groups and associations, and government bodies. He said foundations could, for example, help nonprofit groups identify children without health insurance who would be eligible for the State Children’s Health Insurance Program, a program financed by federal and state governments.
• Give money to community foundations in rural areas to help them hire staff members and build strong organizations. “Localized grant making means grant-making by decision makers who are familiar with the local need, local conditions, and local resources,” he said.
• Offer grants to help rural nonprofit groups build their operations — for example, by financing management training, programs to help nonprofit groups design internship opportunities for “top-notch” students, and state coalitions of nonprofit groups.
• Remove the barriers that hinder national foundations from making grants to rural nonprofit groups. “Funding guidelines are too often written in a way that requires programs or organizations to have already achieved a high level of development, including sophisticated partnerships and alliances,” he said. “But rural programs often need funding to navigate these crucial developmental stages.”

Mr. Gunderson of the council told Mr. Baucus that the group’s members would follow through on those suggestions.

Immediately after the senator spoke, conference participants divided into small groups to select items to be part of a “philanthropic agenda for rural America.”

The participants drew up “working drafts” with 30 items in areas including the arts, economic development, education, the environment, health, housing, technology, and efforts to increase the financial assets of individuals and families.

Among the suggestions:

• Conduct “transfer of wealth” studies for every state and county showing how much money will be passed on to heirs over the next 50 years — and develop guides on how to tap into that money to increase endowments at community foundations.
• Organize a steering group to promote rural community foundations.
• Explore new ways to use foundation assets, for example by giving money to “low-profit limited liability companies,” which would make a small profit while conducting business with a charitable purpose — such as generating jobs in an economically depressed area.
• Encourage grant making that marries environmental protection to economic development; take advantage of the growing interest in locally grown, healthy food.
• Conduct research on ways foundations can support arts and culture in rural areas and distribute the findings broadly.
• Replicate in other states an event in Colorado called Rural Philanthropy Days, which brings urban grant makers to rural regions to meet with local nonprofit groups.
• Find ways to explain to people, especially the “suburban majority,” why economic development in rural areas matters.
• Work for universal health care at the state and federal levels.
• Help rural areas provide low-cost housing.
• Give priority to expanding rural America’s access to technology, which “enables all the other focus areas.”

Mr. Gunderson told the participants that the items would be incorporated into the council’s legislative agenda, published on its Web site, and presented at the council’s conference for community foundations in September. He said rural philanthropy would also be the first topic covered by a new series of “thought leadership” journals that the council will start publishing in the fall.

“This is not something when you leave today, this is it, it’s over,” he said.