Despite lip service, rural America is the forgotten landscape of the U.S. political arena and certainly in American philanthropy. Foundation grantmaking and federal government support to rural communities should be a continuing, serious priority in this nation and within the nonprofit sector.
But unfortunately, for the moment, it appears that rural philanthropic grantmaking is tanking, not just because of the economy, but because of its low ranking in the priority lists of foundation grantmakers and some public decision-makers. This is contrary to what common sense should tell us: investing foundation dollars in rural communities is a sensible, constructive part of a philanthropic agenda for social progress, social justice, and economic recovery.
In this brief commentary, we touch on the following issues:
1. What happened in response to Senator Max Baucus’s challenge to foundations to double foundation grantmaking in 5 years? What did the foundation sector actually do?
2. Despite the problematic data on reported foundation grantmaking priorities, what do the trends in domestic U.S. rural development grantmaking look like?
3. How are rural development organizations experiencing and responding to the continuing diminution of foundation grant support to rural areas?
4. In what ways does foundation grantmaking relate to federal government policy and budget decisions?
5. What might be some public policy priorities that rural nonprofits and foundations might think about with clear and specific implications and parallels for the content of foundation grantmaking?The takeaway: big new foundation money for rural development is missing
A brief history lesson: It was an unusual speech at an annual meeting of the Council on Foundations. Montana’s Democratic senior senator, Max Baucus, gave a plenary talk, partially about pending legislation on Capitol Hill. He then followed it up with a detailed talk about the challenges facing rural America and called on foundations to double their grantmaking in 5 years and report on their plans for doubling in only a few months.
In the wake of Senator Baucus’s challenge to the Council, there was what one wag called “the appearance of intense action”. Foundation leaders pronounced rural philanthropy a top concern of the sector, as it was certainly a top concern of the incoming chair of the Senate Finance Committee. This sparked a conference on rural philanthropy in Montana, a book on the good things that foundations are doing for rural America, a bootstrapping pitch that rural areas looking to capture philanthropic giving should focus on indigenous wealth for rural endowments, and plans for a new conference on rural philanthropy this year, to be held in Little Rock.
But major efforts for promoting more foundation grantmaking to rural? What happened in the ensuring years has not ben promising.
A search for rural development grants on the Foundation Center’s Foundation Directory Online, which contains information on 1,637,227 ”recent” grants from 98,170 foundation and corporate grantmakers, with only explicitly non-U.S. grant recipients deleted, indicates the following meager pattern of growth in foundation grantmaking in this field:
Domestic Rural Development Grantmaking by U.S. Foundations
- 2005: $95,677,130
- 2006: $99,699,160
- 2007: $110,220,576
Between 2005 and 2006, these rural development grants increased 4.2 percent compared with a 7.14 percent increase in all foundation grants. Between 2006 and 2007, rural development grants grew 10.5 percent compared to 10 percent for all grants. One might surmise that these totals for domestic rural development are exceptionally generous, as they include grants to universities which could easily be focused on international rather than domestic issues. Nonetheless, taken on face value, rural development grantmaking has lagged behind overall foundation grantmaking during this time period: 15.2 percent compared to 17.9 percent, and certainly hardly on a path toward doubling in the five years since Senator Baucus’s unique philanthropic challenge.
These numbers of relatively slow growth in rural development precede the current economic recession, which has seen widespread cutbacks in foundations’ 2009 grantmaking compared to 2007 and 2008 levels (see Rick Cohen, “Philanthropy During the Downturn”, The Economic Crisis and Community Development Finance: An Industry Assessment, May 2009, also “Foundation Grantmaking during Economic Collapse: Pollyanna or Cassandra at the Helm,” Cohen Report, March 19, 2009).
Foundation grantmaking to Rural LISC partners
The recession does not make this time propitious for significant increases in foundation support. But a more indicative view of the challenge might be seen in the grant support provided by foundations between 2005 and 2007 to a sample of 36 partner organizations of Rural LISC (Local Initiatives Support Corporation), all among the top rural community economic development organizations in the nation (Southern Mutual Housing Association was excluded from the list, because of the special grantmaking it benefited from that was specifically related to SMHA’s stellar Katrina relief and recovery efforts).
Of the 36 Rural LISC partners examined, 11 received no foundation grants between 2005 and 2007, at least as reported on the Foundation Center’s online database. The remaining 25 took in the following grant totals, including grants from the Fannie Mae Foundation (which appear to be missing in the Foundation Center tabulations):
- 2005: $7,102,978
- 2006: $5,035,119
- 2007: $7,178,379
The 2007 grant total is only slightly more than the amount received two years earlier. If grantmaking to these groups had kept up with the pace of increased overall financial grantmaking, the 2007 number would have reached $8,374,411.
An examination of the largest grantmakers to the Rural LISC partner organizations for this three year period underscores the challenges that nonprofit rural developers are going to face in 2009, 2010, and beyond:
- W.K. Kellogg Foundation: $3,114,866
- F.B. Heron Foundation: $2,605,000
- Annie E. Casey Foundation: $2,505,000
- Marguerite Casey Foundation: $1,367,500
- Ford Foundation: $1,125,000
- Mary Reynolds Babcock Foundation: $1,110,000
- S.H. Cowell Foundation: $1,000,000
- Bank of America Foundation: $983,250
- Meyer Memorial Trust: $350,000
- Wells Fargo: $324,000
- Nina Mason Pulliam Charitable Trust: $300,000
- Ventura County Community Foundation: $296,262
- Sandy River Charitable Foundation: $285,000
- Citi Foundation: $275,000
- Fannie Mae Foundation: $260,000
- William Randolph Hearst Foundation: $200,000
- Surdna Foundation: $154,000
- Richard King Mellon Foundation: $150,000
- Blue Moon Fund: $140,000
- Foundation for the Mid-South: $110,000
The commitment of some of these foundations is noteworthy, particularly the creative mix of general operating support, program related investments, and loans from the F.B. Heron Foundation. For example, one of the $500,000 expenditures to Coastal Enterprises (in Maine) was in the form of a PRI, a $500,000 disbursement to Self-Help Enterprises was a loan. In addition, Heron makes both general operating