Sen. Max Baucus, a Montana Democrat, turned heads in 2006 when he called on foundations to double the tiny amounts they were spending in rural areas within five years.
The five-year deadline passed quietly in May. While statistics about rural philanthropy are challenging to track, advocates for rural charities say foundations have not come close to meeting the senator’s challenge.
Grants for “rural development” in the United States dropped 3.4 percent from 2004 to 2008, even as total foundation grant making rose 43 percent, according to an analysis of Foundation Center data by Rick Cohen, a national correspondent for Nonprofit Quarterly.
Charles W. Fluharty, president of the Rural Policy Research Institute, described the modest giving to rural groups as a “moral failure” at a time when data show greater levels of child poverty exist in rural counties than in urban ones.
“Max Baucus did not fail,” Mr. Fluharty says. “American philanthropy did not step up.”
Senator Baucus, chairman of the powerful Senate Finance Committee, issued his challenge at the Council on Foundations meeting in Pittsburgh in 2006, but he hasn’t spoken out on the topic in several years, and he declined to talk to The Chronicle for this article. A spokesman for the senator said he “remains committed to increasing rural philanthropy” but that he realizes the financial crises of recent years have forced foundations to make “painful choices.”
A Scramble for Support
Officials at the Council on Foundations argue that foundations have responded to Senator Baucus’s challenge. The council organized its first rural-philanthropy conference in Mr. Baucus’s home state in 2007, and the council has held two more national conferences on rural giving since then, including one in Kansas City in July.
The council’s analysis of Foundation Center data found that giving to rural areas by large foundations climbed 51 percent from 2004 to 2009. (The council’s analysis looked at broader types of grant making than the rural-development work that Mr. Cohen analyzed, including grants for “rural-focused topics” to organizations that may have been located outside rural areas.) That increase exceeds the 44 percent growth in overall grant making during that period. Even so, giving to rural areas remains a very small part of foundation activity. Large foundations—those that award more than $4-million per year—gave $530-million to rural charities in 2009. That’s barely more than 1 percent of the nearly $46-billion awarded by all foundations that year.
“We’ve done some,” says Steve Gunderson, the council’s president, “but there is more to do.”
Several rural-development experts say that two foundations that historically have been among the most prominent givers in rural areas, the Ford Foundation and the W.K. Kellogg Foundation, no longer have the same national presence, given changes they have made in their grant-making priorities in recent years.
Yet both foundations say they remain committed to rural giving. Kellogg supports the Center for Rural Strategies, which helped persuade the Obama administration to create a council that will coordinate federal efforts in rural areas.
Ford says its grant making in rural areas has increased from $13.8-million in 2006 to $18.5-million this year.
However, executives at many rural nonprofit organizations say they are finding it more challenging to raise money, in part because of changes at those and other large foundations. Coastal Enterprises, a community-development corporation in Maine that received money from the Ford Foundation from 2004 to 2008, has been scrambling to maintain support for its programs to lend money to small businesses and promote low-cost housing. And it has had to spin off some smaller projects to other groups. “Before we could compete more for much larger grants,” says Keith Bisson, Coastal’s director of rural resources and policy. “Now we compete for smaller grants with more competition just because of the limited resources that are out there.”
‘Hard to Be Patient’
Many experts, including Mr. Gunderson of the Council on Foundations, believe that the most reliable source of support for rural charities will come from community funds created primarily by gifts from local residents. The Nebraska Community Foundation and others have proved that even tiny towns can assemble significant community funds, and such successes are some of the few bright spots in recent years in rural philanthropy. (See article on Page 24.)
But others say the needs in rural areas are so great today that foundations must play a greater role in solving the problems. Rural counties outnumber urban counties two to one, but the rural counties are four times as likely to have persistent child poverty, according to an analysis by the Carsey Institute at the University of New Hampshire.
“Raising your own money is critical, but it’s a 20-year strategy,” says Dee Davis, president of the Center for Rural Strategies, in Whitesburg, Ky., which advocates for rural communities. “When you’re dealing with issues of poverty and illness and disenfranchisement, it’s a little hard to be patient.”
Urban Entrepreneurs
The reasons foundations don’t pour money into rural areas are varied. While plenty of entrepreneurs create wealth in rural areas, they tend to settle in urban areas, and hence the staffs and boards of major foundations are primarily made up of urbanites.
Rural charities are less likely to receive press attention and are often too small to send employees to national conferences, where they might make connections with donors.
Likewise, foundation officials find it challenging to meet face-to-face with charities that work in small and widely dispersed communities. Chambers Family Fund, a Denver foundation with $57-million in assets, has made gifts totaling $3.8-million to start women’s funds at community foundations in four rural states—Montana, North Dakota, Oklahoma, and Wyoming.
But Letty Bass, the fund’s executive director, says it is often very expensive to travel to those states to meet directly with charities.
“It’s hard for the connections to be made,” Ms. Bass says. “A plane ticket to Helena, Mont., costs more than a plane ticket to Europe.”
The recent emphasis by big foundations and donors on producing statistical results may also pose hurdles for rural charities. Urban charities serve denser populations and can touch more people at a lower cost than can a rural charity that has a client list spread over several small towns.
“If a foundation is focused on measurable outcomes, and you measure that by the number of people affected, you’re going to follow the people, and you tend to follow them to urban areas,” says Sandra Mikush, deputy director of the Mary Reynolds Babcock Foundation, in Winston-Salem, N.C., which spends more than half of its $11-million grant-making budget in rural areas.
Advocates for rural areas see some reasons for optimism. Ms. Mikush says an increasing number of foundations have shown interest in supporting relatively large regional groups, such as the six anchor organizations that make up the Central Appalachian Network. These groups, including the Mountain Association for Community Economic Development, work across both rural areas and larger communities and in the process can show the kind of results that many large foundations desire.
“It’s not rural or urban,” Ms. Mikush says. “It’s regional.”
And Mr. Vilsack, the agriculture secretary, has made rural philanthropy a high priority. At the recent meeting in Kansas City, he called on foundations to be more open about what they’re doing in rural areas and to work closely with the Agriculture Department to help rural communities in two promising areas of economic development—renewable energy and local-food production.
“There’s an awful lot of opportunity here,” Mr. Vilsack told The Chronicle. “We perhaps have not focused on that opportunity as aggressively as we should have in the past. Going forward, we’re going to be focused on every opportunity to do partnerships.”