September 27, 2011; Source: Bridgespan | This is a very impressive report from Bridgespan that recognizes both the challenges and the virtues of nonprofits in rural America.  The authors, Alex Neuhoff and Andrew Dunckelman, begin their analysis (in the full report, not the executive summary) with an important question: “Poverty is more common in rural areas of the United States than in urban areas.Yet the nonprofit sector, a key force in the fight against poverty, is three times smaller in the rural US on a per capita basis than it is in urban areas. Why does this disparity in size exist? And what might be done to help nonprofits grow their impact in rural areas?”  Among their findings are these: 

  • “Spending: While rural areas account for 18 percent of the total population and 22 percent of the nation’s poor, they receive only 8 percent of the total spending in the nonprofit sector.
  • Financial health: Rural nonprofits actually exhibit better financial health than urban ones: They are less likely to run an operating deficit and have relatively more in cash reserves.
  • Funding: Rural nonprofits…lack local funding sources, connections to outside funding sources, and the capacity to go after both.
  • Leadership: Rural nonprofits face challenges in hiring and retaining talented staff and board members. Smaller budgets make it hard to offer attractive salaries, and even when talented candidates are hired, it can be hard to retain them…
  • Distance: On average, in rural America, there is one nonprofit for every 50 square miles, while in urban areas, there is one nonprofit for every half of a square mile…rural nonprofits serve much larger swaths of land than urban ones?and beneficiaries who are highly dispersed and lack access to public transportation.”

As one might expect from an entity whose expertise is in helping nonprofits devise strategies for addressing strategic problems, the answers they lay out focus on what rural nonprofits themselves  might do to overcome the specific challenges of nonprofit survival and advancement in rural America–strategically pursuing government and foundation grant opportunities, “networking outside their communities because…that is where the money is,” building strong leadership teams, using videoconferencing and the Internet to deliver services given the large geographies that many nonprofits cover, collaborating with other nonprofits, and affiliating with state or national nonprofit networks.

The report mentions but doesn’t focus on the public and quasi-public policy dimensions underlying these problems, particularly the continued reluctance of foundations to support rural nonprofits (despite lip service to the contrary) and the rapidly declining federal government commitment to many aspects of rural community development. What nonprofits can do is to organize and advocate, to get the message across to institutional funders, both public and private, that the undercapitalization of rural nonprofits is short-sighted, bad practice, and ultimately self-defeating.  Despite the existence of some foundation champions, foundations overall have to be held to account for their continued sluggish response to rural needs. 

Toward the end of the Bridgespan report, the authors discuss reasons why national networks like the Local Initiatives Support Corporation have generated and maintained commitments to rural nonprofits (as in Rural LISC).  The omit one big reason that should impel philanthropy to support rural groups,  In urban areas, even though the headcounts for quantitative impact are obviously larger due to population densities, it is hard to imagine most nonprofits getting their organizational arms around large neighborhoods, much less cities, to be able to fully transform a community, the sizes are too large and the problems too complex and multifaceted.  In small towns and rural areas, anyone who has worked in these places know that it is conceivable, palpable, that a group can realistically imagine community-wide transformative strategies.  That is, in rural America, you can really see and touch community change–if foundations and the federal government are willing to ante up the resources to these “small but tough” rural nonprofits.

We commend this very useful report to NPQ Newswire readers.—Rick Cohen