Foundations still shortchange rural America

Seven years ago, Democratic Sen. Max Baucus of Montana, chairman of the Senate Finance Committee, said foundations were not giving enough to rural America, and that prompted the Council on Foundations to hold a summit about the issue. Former President Bill Clinton held a similar gathering and lectured foundations. There was hope for increased rural philanthropy, but the Great Recession hit, and foundations' giving declined as their endowments shrank.

Now, those assets have largely regained their value, but foundations are doing no better by rural community development corporations, Rick Cohen writes in Nonprofit Quarterly. He says even the best rural CDCs "have a hard row to hoe in tapping foundation support. It is doubly challenging because foundations have started to lose interest in supporting housing and community development. A foundation sector that has long recovered from its recessionary downturn has the capital to meet Sen. Baucus’s long-forgotten challenge and to reinvest in the stabilization of American’s urban and rural communities. In the aftermath of the recession, now is not the time for foundations to pull back, either from rural or from housing and community development."

To back up his argument, Cohen looked at giving to rural CDCs in two networks, the Rural LISC program of the Local Initiatives Support Corp. and the NeighborWorks Rural Initiative. He found that foundations "lean increasingly toward lending and capital investments, rather than program and general operating grant support," Cohen writes. He lists the biggest rural grantmakers:

"The top 10 foundations in this list account for more than 52.2 percent of foundation grant and loan investments," Cophen writes. He noted that many of the top grantmakers for community and economic development are regional or state-based. "Scarcely present in this list are those foundations typically found among the top overall grantmakers in the nation. . . . A more generalized rural community economic development analysis of foundation grantmaking conducted a few years ago that examined grantmaking between 2004 and 2008 had Kellogg as the nation’s second largest rural development grantmaker, though it’s not so in this analysis of grantmaking to the LISC and NeighborWorks rural groups. Others with high rank in that prior analysis that do not rank highly in this analysis are the Northwest Area Foundation, the McKnight Foundation, the C.S. Mott Foundation, the Bill and Melinda Gates Foundation, the Walton Family Foundation, and the John D. and Catherine T. MacArthur Foundation. (Read more)

In 2011, Cohen reported that as philanthropy rebounded with the economic recovery, rural giving actually shrank. That year, the Council on Foundations and the U.S. Department of Agriculture agreed to work together to improve the rural economy. Grant writers, get busy.