How are foundations funding rural nonprofits today? That’s a difficult question to answer, as the definition of “rural,” much less “rural nonprofit,” is a subject of great debate even within the federal government, which has at least 15 different definitions of rural. Many rural nonprofits have probably given up on seeing philanthropy double its rural grantmaking in five years, as per the challenge issued by Senator Max Baucus (D-MT) to the Council on Foundations seven years ago, because of the historic underfunding of rural communities by foundations.
From the perspective of examining subsectors of rural nonprofits, however, one can discern interesting dynamics that suggest changes in foundation support for rural groups. This analysis draws on the foundation support for rural community development corporations that are members or partners of two networks, the Rural LISC program of the Local Initiatives Support Corporation and the NeighborWorks Rural Initiative under the aegis of NeighborWorks America.
Rural community economic development groups that are connected to LISC and NeighborWorks are generally among the strongest, in part because of the access and credibility they get from their association with national community development intermediaries. As a result, the data on foundation grantmaking for these organizations reflect foundation grantmaking for groups more likely than the average rural CDC to access philanthropic resources. Eighty of the 250 members of NeighborWorks are in the Rural Initiative; 58 CDCs are in the Rural LISC program, with substantial overlap with NW.
Although not representative of all rural community developers, these groups do give a taste, at least, of how institutional philanthropy treats the top groups in the subsector. For the purpose of this analysis, groups without any foundation support in recent years have been excluded, as that might be as much the nonprofit’s choice to abjure foundation funding as it is philanthropy’s to consider funding for the group to be excessive and unnecessary. In addition, some members of the rural networks were predominantly urban in their focuses, with the bulk of their program activity geared to metropolitan populations, leaving only a small portion available for more rural groups; they, too, were excluded from the analysis. The statistics are drawn from the online grants database of the Foundation Center for the years 2006 through 2011—and thus not necessarily guaranteed to reflect all grants—and from the encapsulation of Form 990 data available from Guidestar.
Foundation grantmaking for these rural CDCs—67 that received foundation support during these years, basically from a low-base—has progressed in recent years, but without major leaps forward for many organizations:
Total foundation grant/loan investments
Change from previous year
Median foundation investment size
Mean foundation investment size
Average foundation investment total per organization
As of 2010 and 2011, foundation support for these top rural CDCs had not greatly increased above the level of foundation investments they had received five years earlier. These statistics, however, combine foundation grantmaking with foundation program-related investments (PRIs), loans, and other capital investments. Removing those non-grant investments from the calculation paints a somewhat different picture of foundation support for these Rural LISC and Rural NeighborWorks groups.
Total foundation grants
Percent change from previous year
Percentage of tot. fdn. support in loans/PRIs
Median grant size
Mean grant size
Average foundation grant total per organization
Two dimensions of these totaled foundation grant and loan dollars bear mentioning. One is that a few large grants to the largest rural CDCs skew the average grant size (or grant and loan size) upward. Most of these groups are spending significant efforts for relatively small grant dollars—in many cases, grants of only a few thousand. Although the foundation grant totals per organization reach six figures in four out of the six years, remember that groups that received no foundation grants at all were excluded from the analysis. Had they been included, the average foundation grant totals per organization would have been significantly lower.
The other is the impression that foundations lean increasingly toward lending and capital investments, rather than program and general operating grant support. Early indications in foundation investment patterns seem to show that, just as in 2011, one-quarter of foundation dollars will go to rural CDCs as loans or PRIs in 2012. Overall, for these larger, more experienced rural community developers, foundation support has fallen well short of Senator Baucus’s call for doubling.
The sources of rural philanthropy haven’t changed much. The top funders of rural community economic development between 2006 and 2011 do not show an influx of new money:
Grant/loan investments to rural community developers 2006-2011
Percentage of all foundation grant/loan support to rural community developers
F.B. Heron Foundation
Mary Reynolds Babcock Foundation
Annie E. Casey Foundation
Bank of America Foundation
W.K. Kellogg Foundation
Wells Fargo Foundation
Marguerite Casey Foundation