The Dilemma of Rural America Philanthropy

Philanthropy alone cannot cure poverty and the host of related issues experienced in rural America. The numbers tell the story. Typically a rural community's population is measured in the thousands, sometimes tens of thousands but never hundreds of thousands. If the majority of giving is by bequest and if less than one in ten people leave a bequest (the overall U.S. experience is 8%, per Giving U.S.A.), then the growth of a rural community foundation will be a slow process. The process is made even slower by the nature of assets held by rural Americans, which often tends to be illiquid (land-heavy).

Philanthropy needs partners to solve rural issues on a timeframe that impacts people today. Government can help. Large national foundations can help. Neighbors in urban areas can help. These entities are either tax-funded or already have established endowments.

Government is increasingly pressuring philanthropy to spend out its dollars rather than build endowments. To date, this has been a "jawboning" effort which has followed on the charitable reforms contained in the Pension Protection Act of 2006. Pressuring nonprofits to spend down their endowments would rob rural areas of the ability to eventually build an asset base through which they can address their own issues with reduced outside help.

Building endowments in rural areas will take more than just time. It will take expertise. This is where urban neighbors can be particularly helpful if they have the systems and human capacity to establish rural affiliates. The affiliate structure contains its own dangers, however, if the urban host does not allow the rural affiliates substantial flexibility to address problems in its own way. One may justifiably be suspicious whether expansive urban community foundations are more focused on building their own assets than they are in solving the rural areas' problems.

The conference in Montana on rural philanthropy earlier this month brought all of the above partners to the table. It presented an opportunity to listen and to be heard. The Community Foundations of Virginia had two representatives there -- Karen Krei of the Piedmont Community Foundation in Middleburg and Randy Arno of the Cooper Center at University of Virginia. Our group was inspired to hear their report last Friday. We now begin assessing the meaning of what they learned and determining how to bring all of these partners to bear on this issues of rural Virginia

Robert Thalhimer