Last year, the Foundation for Appalachian Kentucky provided emergency relief to local businesses, like Sassy Trash, a store in Harlan, Ky., that sells antiques and work by local artists.
Original story posted on Philanthropy.com, by Nicole Wallace on May 4, 2021.
From day one, the Foundation for Appalachian Kentucky’s goal has been to bring together communities in 26 rural counties to build opportunity and reimagine the economy of a region that has long depended on coal and timber.
The community foundation acts as a hub to catalyze economic development. It forges ties with foundations outside the region and acts as a conduit to help them funnel money into southeastern Kentucky. Locally, it works closely with donors and partner organizations to promote affordable housing, nurture entrepreneurs, and revitalize downtown corridors.
Covid struck a little more than a decade after the foundation started — and leaders knew the progress the foundation had made was at risk.
Within two weeks, the grant maker had relief funds up and running, sending out checks to nonprofits, business owners, and farmers. Altogether, it distributed more than $1 million in emergency relief last year, a large sum in a region with few grant makers.
We’ve neglected these entire swaths of our landscape for so long. You can’t neglect that much of your nation for very long and then expect things to work in our civil discourse the way we want them to work.
GERRY ROLL, EXECUTIVE DIRECTOR OF THE FOUNDATION FOR APPALACHIAN KENTUCKY
The foundation is counting on its deep relationships, fortified by the crises of the past year, to help bolster economic resilience in the region going forward. The stakes are high for rural communities. But the Foundation for Appalachian Kentucky’s work also points to a long-standing national problem — the significant gap in philanthropic money going to rural areas versus urban ones.
Aid to Small Businesses
To distribute money directly to local businesses, the foundation worked closely with partners like Invest 606, a local business accelerator, and the Community and Economic Development Initiative of Kentucky at the University of Kentucky. Leaders from the three groups met once a week in the early months of the pandemic to review applications.
The grants were small — $600 to $3,000 — but it was the first assistance that many businesses received.
“It was that ‘I believe in you money,’” says Lora Smith, director of the Appalachian Impact Fund at the foundation.
Before the pandemic, the Roundabout Music Company, in Whitesburg, Ky., had sold some records on platforms like eBay, Amazon, and the online music seller Discogs, but it didn’t have the ability to sell products on its own website. Getting a $3,000 grant made a big difference as the store shifted to e-commerce, says Ben Spangler, Roundabout’s owner.
“It bought us a couple of weeks that we could just focus on this one task,” he says. “It’s like, OK, the rent’s paid, the bills are paid.”
Spangler says government Covid assistance wasn’t designed for Mom and Pop businesses like his. His application for a loan from the Small Business Administration was turned down.
“The definition of what a small business is in a lot of these grants and loans is pretty big,” he says. “It could include a local record shop or a local coffee shop. But it’s also someplace that employs 100 people.”
One big takeaway from the crisis is the need to provide money to small businesses without making them jump through a lot of hoops, says Geoff Marietta, founder of Invest 606.
“You have to build local capacity if you’re ever going to disrupt the cycle of poverty,” he says.
Too often, rural areas put all their energy into trying to entice a company to set up a factory, which Marietta says does little to develop local talent and leaves the community dependent on outside forces. “You can’t just 100 percent rely on large companies — Amazons coming in into your community — and suddenly providing 200 jobs.”
‘Skin in the Game’
Several years ago, leaders at New Profit, an organization that helps social entrepreneurs expand their nonprofits, realized that it was reaching primarily urban areas. It started the Rural and Small Town Action Summit to study the rural philanthropy gap and tapped the Foundation for Appalachian Kentucky as a partner.
Large foundations need to examine their assumptions about rural areas, says Kim Syman, a managing partner at New Profit who oversees its Systemic Solutions Initiative. Rural communities are not monoliths, she says, and there’s a lack of appreciation for the caliber of leadership that’s already there.
Syman says she’s come to believe that supporting rural development hubs is critical to bridging the rural philanthropy gap. Some hubs are community foundations like the Foundation for Appalachian Kentucky, while others are nonprofits, community development finance institutions, or centers at universities. What they have in common are their deep, trusted relationships in the community, the ability to bring local players together, and a focus on building leadership and capacity.
“It’s really easy for funders to kind of get stuck on this question of something being so small or so slow,” Syman says. “There’s actually an opportunity to bring a lot more creativity to bear here, to recognize that there are really powerful examples where catalytic philanthropic commitment can make a massive difference in rural communities and small towns.”
The Foundation for Appalachian Kentucky has started to bring in more dollars from large foundations, including the James Graham Brown Foundation, and it wants to help others invest in the region. But Roll cautions that it’s important to respect local expertise.
If you really care about the nation and our democracy, this is where you can invest, and as a partner, it can truly make a difference. As someone swooping in and trying to tell us what to do, it isn’t going to work.
GERRY ROLL, EXECUTIVE DIRECTOR OF THE FOUNDATION FOR APPALACHIAN KENTUCKY
Kristin M. Smith, the chef owner of the Wrigley Taproom & Eatery in Corbin, Ky., echoes that sentiment. Smith says that she and other entrepreneurs have grown jaded about outside foundations coming into southeastern Kentucky to try to boost economic development. Very little money trickles down to business owners, she says. It all seems to go to training run by facilitators who don’t understand the challenges local entrepreneurs face.
By contrast, Smith chokes up a little when she talks about the $3,000 grant her restaurant received from the Foundation for Appalachian Kentucky to respond to Covid.
“What I love about the foundation is the foundation is located in Appalachia. They’ve got skin in the game,” she says. “They’re working shoulder to shoulder with us, and that speaks volumes.”A version of this article appeared in the May 1, 2021, issue.
