Myths and Opportunities: What's Happening in Rural Philanthropy?

 photo: cjchiker/shutterstock

photo: cjchiker/shutterstock

Allen Smart is on a mission to set the record straight on rural philanthropy.  When we report on philanthropy in rural communities, it’s often to decry its scarcity. Smart says that’s not the full story. In fact, there’s a great deal of robust, strategic philanthropy in rural communities happening under the radar.

Part of this is because the philanthropy typically isn’t coming from the types of foundations that get the most coverage—large, national funders based in cities. That doesn’t mean that rural philanthropy doesn’t exist, Smart says.

Smart has spent much of his career working in and studying the rural philanthropy. He serves as the project director of Campbell University’s Office of Rural Philanthropic Analysis and recently collaborated with the Robert Wood Johnson Foundation on a landscape report on the state of rural philanthropy.

“I think that one of the fundamentals that’s misunderstood is that there isn’t a bunch of good philanthropy going on in rural America. There’s actually a great deal of good philanthropy,” Smart said. “Much of it doesn’t get much attention outside its community or its region. So I think that’s a piece of the narrative that gets lost in translation.”

Health conversion foundations are the big movers behind this work, Smart said. The funders, sometimes referred to as health legacy foundations, typically start when a nonprofit health organization, like a hospital or health plan, is sold or merged and the proceeds need to stay in the nonprofit sector. Examples include the Colorado Trust and Episcopal Health Foundation in Texas.

Several hundred of these types of foundations exist across the country. In many cases, they’ve emerged as the leading supporters of strategic, community-led work in rural America, Smart said.

“I think most people thought that that was just going to be traditional grantmaking added to a community, much like United Way or a community foundation might have. But in many cases, the conversions have been leaders of real education and economic stimulus.”

What Does Rural Philanthropy Look Like?

Good rural philanthropy can look different than good urban philanthropy, which in some ways makes it easy to miss, Smart said. “I think another piece of it is that good rural philanthropy, or rural philanthropy that’s going to have a long-term impact does in many ways look quite different from what large-scale, urban philanthropy looks like. Some of that’s scale. Some of that is working in a very different cultural context.”

“I think the philanthropic take from larger funders is often, ‘There’s no scale. There’s no rate of return.’ That’s just fundamentally wrong,” he said. “There are ways to address those, and rural philanthropy can and should be in many ways the innovation lab for larger, urban-scale philanthropy.”

Leaders at regional health foundations that work with rural communities noted that they bring the same principles to their work in rural and urban areas. Foundations strive to allow communities to lead the work. They respect the expertise of residents, who are best equipped to know what their communities need.

Dolores Roybal, the executive director of Con Alma Health Foundation in New Mexico, says that the characteristics of good philanthropy are the same in rural and urban communities—think non-prescriptive and community-led—but that demographics, needs, challenges, strengths and resources differ.

That different context means that the work can look different, even when it grows out of the same philanthropic principles. To start with the obvious, scale in rural philanthropy is much smaller than urban philanthropy.

That’s been true in Ned Calonge’s experience at the Colorado Trust, where he serves as the foundation’s president. The foundation works both in the rural regions of the state—in communities with as few as 500 people—and neighborhoods in urban centers like Denver that can have as many as 30,000 residents.

“How does it play out differently? Well, in rural communities, there’s just less capacity. If you have 30,000 people in your neighborhood, there’s a lot of depth; there’s a lot of folks who may have the time and interest available,” Calonge said. “You have to work a little harder to develop that in rural communities.”

That can mean devoting more resources to capacity building, Calonge said. There are fewer large, established nonprofits in rural areas, so the foundation takes more education and support, and technical assistance work. In communities without established nonprofits, a lot of back-office and administrative work falls to residents. Calonge says the foundation’s fix is to hire contractors to do those tasks and train locals, so that when the grant is over that knowledge stays in the community.

The smaller scale has its advantages, though. For one, navigating the many overlapping nonprofits found in cities while striving to do resident-led work is a challenge, Calonge said. But that’s not the only benefit of working in a smaller community. “The sense of ownership in rural communities is remarkably strong,” Calonge said. “Often in our experience, it can be greater than the sense of ownership in an urban neighborhood.”

Elena Marks, who runs the Episcopal Health Foundation, agreed with Calonge. Her foundation works in Texas’ rural regions, as well as its urban centers, and rural work has its advantages. “Because the population is smaller, you actually have an opportunity to get things done that you can’t get done in an urban area because there are so many more people,” she said.

In his research, Smart also found that foundations were more likely to engage with state and local governments in rural, rather than urban work. There tend to be fewer large, established nonprofits in rural communities. That means regional foundations working with these communities find themselves leading configurations of the private and public sector to move work along, he said. The work requires a different type of leadership and engagement than is typically seen from large, national foundations.

Both Calonge and Marks found that was true when it came to their foundations’ rural initiatives.

Marks echoed Calonge’s experiences when it came to capacity building, but was careful to stress that she felt the emphasis on the differences between urban and rural philanthropy were overblown. Marks said she’s encountered neighborhoods in cities that are just as different from one another as they are from a rural town.

“Every community is different. The way that you work in a community is determined by the characteristics of that community. Urban versus rural is one characteristic of many,” she said.

For Marks, the most harmful misconception outsiders bring to rural philanthropy is to think that communities are any less capable of understanding their needs and directing their own work than urban neighborhoods.

“I think there’s this assumption that people or organizations in rural areas are less sophisticated and need more help in figuring out what they want to do, and I would say that’s absolutely not true. They are every bit as sophisticated,” she said. “They may want or need different things than urban areas, but as I’ve said, one urban area may have different needs and wants than the neighboring urban area.”

Another often overlooked characteristic of rural communities is their diversity, Smart said. There’s a tendency to describe rural communities as predominantly white, which often isn’t the case.

Roybal of Con Alma reports that the demographics in the communities where her foundation works typically echo the demographics of New Mexico as a whole.  That means communities tend to be about 50 percent Hispanic, 40 percent white and 10 percent Native American. 

Calonge and Marks echoed Roybal’s experience. Marks said EHF has long worked with rural communities with large African American populations, which mirrors the demographics in many rural communities across the South. Dynamics are changing, though, as more Latino immigrants move into the communities, she said.

The communities that Colorado Trust works with are similarly diverse, though the demographic breakdowns vary, Calonge said. Rural communities are so diverse that working on a collective community identity—which the fund refers to as "social connectivity"—is a big part of the work the trust funds.

Members of diverse communities understand how important the work is, Calonge said. Resident groups tackled the challenge in a number of different ways. One community that was made up of whites, Latinos and African refugees chose recreation as the tactic to bring disparate ethnic and cultural groups together to better understand each other.

“It’s fascinating to hear them talk, because—not to over-generalize—but both sides recognize that if they want to be a community, they have to work to understand each other better,” Calonge said. “They’re actually working on how to work together across difference.”

The Issues

In many ways, the issues facing rural communities can look similar to those facing urban communities. EHF, for example, follows the same strategy and focuses on the same issues—improving community health—in rural and urban areas, Marks said.

However, there are also challenges either unique to or more pronounced in rural areas. Obviously, problems differ by region, but Smart identified a few that many communities have in common. Smart sees the instability of the healthcare system in rural areas, the lack of transportation options, and access to Broadband and cellular service as leading issues.

Rural America is also in the middle of a housing crisis, Smart said. Rising rents in urban hubs like New York City and San Francisco get a lot of attention, but the media largely ignores the problems caused by increasing rural rents. Smart counts K-12 education as another big challenge. Rural communities have a hard time attracting and keeping good teachers.

In New Mexico, Roybal said rural communities are more likely to lack access to healthcare services because fewer doctors and dentists set up practice there. Rural residents are also less likely to have employer-provided healthcare and prescription drug coverage.  There’s a higher poverty rate, and people in rural areas are more likely to experience suicide, alcohol abuse and obesity. They’re also more likely to use tobacco or die in a car crash, she said.

In Colorado, Calonge sees the biggest issues as the economy, a lack of opportunity for young people and building a sense of belonging in diverse communities, as mentioned earlier.

Many of the state’s rural communities grew up around small family farms, Calonge said. As those were sold off to larger farms, that money left the community. Migrant workers staff many of the large farms. That means earnings have left the community, as well. Many of the communities are still struggling to adapt to this new dynamic, he said.

The economic issues dovetail with the lack of opportunity for young people born into rural communities, Calonge said. Only about half of the graduates from rural high schools continue to college. Because of the economic issues, the half left behind can’t find jobs. They’re left without many choices.

Calonge sees the downstream consequences of these issues in the opioid crisis. He says he's witnessed work in the region led by others on prescription and medication take-backs in rural communities.  A drop-off in prescription medication abuse often follows the initiatives, but it’s paired with an uptick in illegal opioids.

“What that tells me is that the basic issue isn’t being addressed. I think there is very little infrastructure for prevention, identification and treatment in rural areas. That lack of appropriate services is compounding problems,” he said.

“It’s in no way to undercut the issue in urban areas, but I want to take you back to the issue of half of your class not going on to college. You know, what do you do?” Calonge asked. “Without opportunity and without hope, it’s easy to fall into drugs and other ways of coping. We see that in the rural areas.”

The opioid epidemic is a problem that complicates all the other areas—from financial stability to healthcare access—that regional foundations have worked on for years. In states where opioids are a major problem, the epidemic eats up the financial resources of emergency response and public safety systems across the whole state.

And despite the national attention the opioid crisis has been getting, there hasn't been an influx of dollars from funders outside of rural regions to combat the problem.

The Opportunity

Just because there’s robust, strategic work happening in rural communities, led by regional funders, it doesn’t mean there aren’t ways for national funders to get involved. That’s a good thing, according to Smart, who’s noticed a growing interest in rural work among large, coastal foundations.

For a long time, that wasn’t the case. Smart thinks that in part, this was due to big philanthropy’s focus on scale. “I think there certainly is this mythology that philanthropy should only focus on where there’s density of scale. That somehow that relates to return on investment. That’s one theory. I think philanthropy should also be about innovation, allowing people pursue their hopes and dreams in ways that weren’t available otherwise.”

Another piece is that big foundations haven’t been asked to think about rural philanthropy in a serious, long-term way. On a human level, leadership and staff at national foundations haven’t spent much time in rural areas. “I think unless you’ve lived and worked in the different rural regions of the country, it’s hard to imagine a philanthropic place. The work does look and feel different,” Smart said.

Of course, there are exceptions. The Ford Foundation and W.K. Kellogg Foundation are longtime supporters of work in rural communities, Smart said. The Robert Wood Johnson Foundation is also emerging as an eager partner for regional and local foundations engaging in rural work. The foundation commissioned Smart to study the field with the goal of aligning and energizing it by promoting the good work funders are already doing and engaging the foundations sitting on the sidelines.

Through his work, Smart has found ways for big, national foundations can get involved. For starters, these funders can bring standardized methods for evaluation to the underdeveloped field of rural philanthropy. Large foundations can also lend their expertise in strategic communications, especially when it comes to advocating for issues, he said.

If big, national foundations do take on rural work, Smart hopes they’ll do it alongside and learn from the regional funders that have been working in these communities a lot longer.

“Just dumping a bunch more money into rural America from a philanthropic side is likely to not be particularly useful, and may actually be disruptive to some of the work going on already,” Smart said. “What we really need is for funders to really commit to this long-term learning path, this long-term model development. Rural communities, rural funders are very leery of larger funders that want to develop the rural initiative of the day, devote a bunch of dollars and then go home.”

Calonge said that in his experience, investments from national funders look a lot more like traditional philanthropy. “National foundations are more likely to really engage in the traditional model of finding a nonprofit that aligns with their mission and vision and providing funding to them to build out, scale up, or continue their work in communities.”

It’s a model that works, if you can find a nonprofit in the community you want to serve, but that’s not a guarantee in many rural areas.

“It’s rare for a national funder to really get down far in community engagement. It really takes boots on the ground and people in community. It just requires a much larger investment than finding those rural nonprofits that are aligned with their mission and vision,” Calonge said.

With this dynamic at play, it makes sense for national foundations to partner with local funders, that do have the ‘boots on the ground’ necessary to engage with residents in rural communities.

That’s the path the Robert Wood Johnson Foundation took on a recent initiative with the Episcopal Health Foundation, Marks said. The EHF partnered with the public health giant and another local funder to work in rural communities that had lost hospitals. Support from RWJF meant they could run the initiative in three communities instead of two.

“We’re learning together and from each other. Co-funding the work allows us to spread our dollars better when there are three funders as opposed to one,” Marks said. “It means we can do more work.”

It’s a promising model for national funders that are looking to get involved. For a long time that hasn’t been the case, but Smart is hopeful this is starting to change.

“I think having been in the field for 20 years or so, there is more interest now than there has ever been,” he said. “I think a lot of it is stimulated by this group of funders working on the local and regional level that have really committed to thinking and doing in ways that are specific to rural.”

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