A Proven Way to Battle Rural America's Poverty

 Camp Kamassa, in Crystal Springs, Miss., is the state’s first fully accessible camp for special-needs children and adults. Built in a county whose poverty rate is 28 percent, the 326-acre camp will include a sports field, pool, amphitheater, and nature trails.

Camp Kamassa, in Crystal Springs, Miss., is the state’s first fully accessible camp for special-needs children and adults. Built in a county whose poverty rate is 28 percent, the 326-acre camp will include a sports field, pool, amphitheater, and nature trails.

This op-ed, authored by Justin Maxson, Executive Director of the Mary Reynolds Babcock Foundation, originally appeared in the Chronicle of Philanthropy on July 11, 2018

A county in Mississippi with a 28 percent poverty rate is about to boast the state’s first and only year-round, fully accessible camp for disabled children and adults. A rural county in South Carolina will soon have a dedicated high school to prepare students for health careers. In South Dakota, dilapidated school buildings in a county that’s 43 percent Native American are to be transformed into state-of-the-art facilities.

These are among 100 projects that have gotten off the ground through creative efforts to aid persistently poor counties by unlocking as much as $423 million from government and private sources. Americans in high-poverty rural areas will benefit from community projects now in the pipeline, including health clinics, hospitals, assisted-living homes, schools, child-care centers, recreation and tourism hubs, and other facilities and programs.

But funding alone isn’t moving shovels in these small towns. Mission-driven organizations known as community-development financial institutions — or CDFIs — are behind the progress. They consist of local experts who know what their neighbors need and who have the relationships and knowledge to tailor solutions to specific challenges in their communities.

That’s why the Mary Reynolds Babcock Foundation, which I head, has been supporting an effort known as Uplift America, which seeks to make these organizations stronger so they can use their expertise and relationships for the greater good.

The partnership just published a progress report detailing the scope and geography of these local lenders and the much-needed projects they’re financing. It is worth reading for all grant makers concerned about advancing America’s too-often-neglected rural poor and middle-class residents.

A new United Nations report finds tax cuts for the ultrarich coupled with erosion of protections for low-wealth and middle-class families are exacerbating wealth inequality and extreme poverty in the United States. In this climate, it is vital we support the communities most likely to be harmed by these policies and find out what they need to stay on their feet.

High Poverty Rates

Places outside America’s cities have vast natural resources, agriculture, and manufacturing businesses, as well as millions of proud, passionate people with rich cultural traditions. Latinos, African-Americans, Asians, and Native Americans are well represented, and in many areas, expanding immigrant populations are helping to keep communities afloat.

These places are critical to the country’s overall economic health, but to adapt an old cliché, when America sneezes, rural regions catch a cold.

A new Save the Children report finds that while urban poverty remains too high, rural poverty is much more pervasive and persistent. Nearly a quarter of American children in rural areas grow up poor; the figure is one in three or higher across much of the South.

This isn’t a new phenomenon. Lack of opportunity, low educational attainment, limited access to health care, slower recovery from recessions, rising income inequality, and other factors have kept too much of rural America in poverty for generations. A paucity of investment and outright neglect have led to decaying infrastructure and inadequate public services, leaving many areas with open sewage, undrinkable water, and crumbling schools.

Uneven Benefits

Philanthropy has not been stepping into the breach — at least not at the scale needed to tackle the challenges. U.S. Department of Agriculture economists analyzed grants from 1,400 of the largest foundations from 2005 to 2010; the analysts concluded that only 5.5 to 7.5 percent of those grants benefited rural counties, even though 19 percent of Americans were living in such places.

Researchers also found that the greatest benefits from grant making to rural areas go to counties that already have well-funded nonprofits with the resources to court support from foundations.

It’s clear we need to make a shift in how we work.

One way to make a huge difference is for grant makers and the government to better tap the role of community-development financial institutions as key players in deploying more assets to rural America. These organizations excel in fighting rural poverty and in working on ways to shape policy, develop leaders, and expand civic engagement.

Efforts by these institutions have prevented some communities from becoming banking deserts, where people are likely to resort to high-cost predatory lending. These institutions provide services such as small-business loans, mortgages, financial education, debt consolidation, and financing for projects including affordable housing, schools, and grocery stores. They help individuals, families, entrepreneurs, developers, and municipalities improve their financial situation by providing not just capital but also hands-on assistance and training.

What’s more, these institutions often promote potential new growth areas for local economies like renewable energy or cultural tourism. Some educate the public and advocate for policies that offer ladders out of poverty so low-wealth people and small businesses can achieve their financial goals, thereby contributing to the improvement of local economies in general.

Making Development Democratic

Increasingly, efforts such as these are being done collaboratively with other nonprofits, all with the aim of making development efforts across the country more democratic.

The Bill & Melinda Gates Foundation recently gathered academic, nonprofit, religious, philanthropic, and business leaders to examine the underlying factors of chronic poverty, including social, political, and economic forces. Among the recommendations issued by this collective effort, the U.S. Partnership on Mobility From Poverty, is to give residents of poor rural areas better access to affordable, responsible financial tools.

Specifically, the partnership recommends strengthening and expanding the constellation of 1,100 financial institutions serving people and places neglected by big banks. The group cited Uplift as an example of "the potential for collaboration among financial institutions, government, foundations, and CDFIs in expanding access to financial services in economically distressed areas."

Evolving Picture

In today’s turbulent political and economic environment, efforts like Uplift America face new obstacles. Since the effort began, the leadership at many federal agencies has changed greatly. There is also a lot of uncertainty about policies and regulations in the financial world. While we hope to develop more collaborative efforts like that one, they may look a little different — and maybe that’s a good thing.

What is clear is that the demand and the need remain high. We hope to attract new sources of flexible capital that can deliver benefits to rural areas, involve smaller lenders, and seed a wider range of projects both large and small.

One ingredient in future partnerships will remain constant: trusted local lenders that are mission-bound to improve their communities and, with the right kinds of investment, can actually get it done.

In the meantime, the Babcock Foundation will continue to provide grants and program-related investments to community-development financial institutions in rural areas that have contributed so much to America but never gotten fair recompense.

Regardless of the shifting political winds, we hope more foundations will recognize that supporting these trusted institutions is a straightforward way to increase economic opportunity, improve the quality of life, and help realize the immeasurable potential of rural America.

Uplift America Releases 2017 Progress Report

Now that Uplift America's first year has come to a close, Prosperity Now and the Mary Reynolds Babcock Foundation are pleased to release a 2017 Progress Report, which explores Uplift's impact on rural communities. Here are some of the report’s highlights for 2017:

  • Over $400 million in long-term, low-cost financing made available to community development institutions through the Community Facilities Relending Program
  • $22 million in private grants pooled by seven philanthropic institutions
  • 20 community development institutions across the country received USDA loans and private grants
  • 93 community facilities projects, representing $217 million in loans, in the pipeline

The projects that Uplift grantees are financing cover a wide range of rural communities' needs, from community support services to education. For example, with the help of a $7 million loan from HOPE, a CDFI dedicated to strengthening communities, building assets and improving lives in the Delta, Mississippi’s Toughest Kids Foundation plans to open the only fully accessible camp in Mississippi for people with serious illnesses and disabilities. In another exciting project, two community lenders in South Dakota, Dakota Resources and Rural Electric Economic Development, Inc., are teaming up to finance the reconstruction and renovation of school buildings in the small community of Lake Andes, which is 43% Native American.

The 2017 Progress Report also emphasizes the importance of CDFIs in the Uplift America partnership. These mission-focused institutions are located in the communities they serve, so they can build relationships and tailor their services to local needs. Coupled with their ability to provide technical assistance and counseling to borrowers, this makes CDFIs a crucial partner in community-based development. Additionally, Uplift builds CDFIs’ capacity, with the goal of making them enduring resources for their communities.

Uplift America demonstrates the commitment of the public and private sectors to reducing persistent poverty and creates opportunity in rural communities. Read our report for more details on what Uplift has accomplished in its first year.

Uplift America-Funded YMCA Re-Opens in Rural Maine Town

After a period of renovation and construction, the Central Lincoln County (CLC) YMCA in the small town of Damariscotta, Maine hosted its grand re-opening yesterday afternoon. Since the late 1980s, the YMCA has been a community hub for the region’s residents, offering exercise facilities, childcare and summer camp programs. The decades had taken their toll, however. The structure was built in 1973, serving as a recreational center before being purchased by the YMCA, so it needed upgrades to continue meeting the community’s needs.

With the help of a fundraising campaign and financing from Coastal Enterprises, Inc. (CEI)—a community development financial institution and participant in the Uplift America Fund—the CLC YMCA underwent a renovation and expansion that will allow it to cater to the region’s young and old alike. Overall financing for the renovations was almost $8 million, with $2.46 million supplied by CEI through the Community Facilities Relending Program. CEI works in Maine and across the country to revitalize rural regions and gateway cities and increase the availability of good jobs. The additional $5.4 million for the YMCA was raised through a three-year community fundraising campaign.

With a 17,000-square-foot expansion, the new YMCA is 25 percent larger and includes a new welcome center, fitness center and space for its first pre-kindergarten classes. An elevator was installed as part of the renovation, making the facility fully accessible as defined by the Americans with Disabilities Act. The YMCA also provides services for senior citizens, including an intergenerational room, which is a meeting space meant to bring together children and elders. Finally, the YMCA is housing two nonprofits - Spectrum Generations, which connects the aging and disabled population in central Maine with resources and activities, and Focus on Agriculture in Rural Maine Schools (FARMS), which heads a teaching kitchen to educate children on good nutrition and local farming.

Senator Angus King of Maine, the YMCA's CEO Meagan Hamblett and a local artist.

Thousands of locals will enjoy the expanded facility’s services. The CLC YMCA serves 22,000 residents of ten rural communities within a 25-mile radius. Ten percent of the region’s year-round residents are YMCA members, and the new YMCA is expected to draw 2,100 memberships, plus additional, non-member users. Lincoln County has an 11.3 percent poverty rate, and almost half of the students in the region receive federally subsidized school lunches.

"This project has a significant benefit to the community. In rural areas, these projects become the lifeblood of the community. Ys are all about helping people live better lives," said Elizabeth Rogers, CEI’s Chief Communications Officer.

Mission Investors Exchange to Host Uplift America Webinar

Mission Investors Exchange will host a webinar called Unlocking Investment in Rural America: A Systemic Approach to Partnerships for Impact on Tuesday, December 13 at 2pm. 

From MIE's description: 

This webinar illustrates the leadership role that foundations can play in leveraging additional dollars for communities in need.

The efforts you will hear about in the creation of the Uplift America Fund are resulting in stronger local community infrastructure, reductions in poverty and access to almost $500 million in federal dollars that otherwise would have been left on the table.

  • Discover how foundations are playing a leadership role in leveraging capital for communities they care about.
  • Learn how a combination of grants, guarantees, and loans can work together to strengthen community development financial institutions (CDFIs) and their work in low-wealth regions and Native American communities.
  • Understand how this framework for multi-sector place-based solutions could be applied in your own community to facilitate funding for community projects such as schools, food banks, child care facilities and health clinics. 

Mission Investors Exchange will be live tweeting during the event. Follow @missioninvest and #UpliftAmerica on Twitter to participate in the conversation!

To register, click here

Moderator: 
Melanie Audette
Senior Vice President, Mission Investors Exchange
@melaudette
@missioninvest

Participants: 
Bill Bynum
CEO, Hope Enterprise Corporation
@HopeCUbill

 

Justin Maxson
Executive Director, Mary Reynolds Babcock Foundation
@justindmaxson
@mrbf_org

Lisa Mensah
Under Secretary for Rural Development, United States Department of Agriculture
@usdaRD

This webinar is inspired by the dynamic sessions Private Capital for Public Good and A Tactical Guide to Harnessing Federal Resources for your Community at MIE's 2016 National Conference: Seizing the Momentum and is part of MIE's Forward Momentum series.

Uplift Fund and Community Facilities Loan Recipients Announced

  BEREA, Ky., Oct. 6, 2016 – Agriculture Secretary Tom Vilsack today unveiled an unprecedented collaboration with banks, philanthropic foundations and community development organizations. In partnership with the Uplift America initiative, USDA is providing $401 million in Community Facilities program funds to local lenders with track records of helping reduce poverty in some of the nation’s most isolated rural communities.

   “This effort builds on our commitment to lifting up the economic prospects of communities that have not benefited from the revitalization of rural America," said Vilsack. "By engaging with local and national partners, private-sector financial institutions and philanthropic organizations, USDA will inject a game-changing level of investment capital to reduce poverty in targeted rural areas where the capacity for growth has not been realized." 

   The long-term, low-interest financing available through Uplift has two unique features: Private financial institutions, primarily Bank of America, provide guarantees for the first five years of the loans. Recipient "relenders" are eligible for net-asset and capacity building grants from a $22 million fund pooled by seven philanthropic foundations: Bank of America, Ford, Heron, JP Morgan Chase, Mary Reynolds Babcock, Northwest Area and Winthrop Rockefeller. MRBF, which is managing the fund, views the partnership as an opportunity to target critical funding to underserved communities while strengthening experienced local lenders.

   “With vast expertise about the areas they serve, community development organizations are uniquely positioned to tailor place-based solutions,” said MRBF Executive Director Justin Maxson. “Grants from the Uplift America Fund enable these lenders to attract more federal dollars in the short term, while building their capacity to address rural economic challenges for the long term.”

   The CF loans may be used to build, acquire, maintain or renovate essential community facilities. They also can be used for capacity building and to finance community services, such as education, health care and infrastructure. Kentucky-based Community Ventures Corporation plans to use funding from Uplift to open a new office and launch the Build Appalachia Fund.

   “Hospitals and colleges are usually the biggest economic drivers in small Appalachian towns. If we can strengthen those facilities by helping them attract more students or serve more patients, it increases the economic vitality of those communities,” said CVC President Kevin Smith. “There are a lot of great ideas in rural communities that never get off the starting block, and through this program, we can make that happen.”

   The funding will allow South Carolina Community Loan Fund to boost lending in rural counties, many of which experience poverty levels of 20 to 30 percent.

   “The unique partnership that has been established through the Uplift America Fund and Community Facilities Relending Program will help us provide essential services and improve quality of life in low-income, rural communities by providing much-needed, long-term capital,” said Chief Executive Officer Michelle Mapp. “We look forward to continuing to increase the wealth and health of disinvested communities throughout the state.”

 Fahe President and CEO Jim King and MRBF Executive Director Justin Maxson describe the benefits of the Uplift America partnership to rural communities. Fahe is one of 20 Uplift grant recipients and 26 Community Facilities Relending Program loan recipients. 

Fahe President and CEO Jim King and MRBF Executive Director Justin Maxson describe the benefits of the Uplift America partnership to rural communities. Fahe is one of 20 Uplift grant recipients and 26 Community Facilities Relending Program loan recipients. 

UA Recipients 2016 JPEG.jpg

Partners Gather in Washington to Launch Uplift America

Representatives from the USDA, Bank of America, the Mary Reynolds Babcock Foundation, Prosperity Now, community development financial institutions and philanthropic partners launched the Uplift America partnership at USDA headquarters on July 19. 

 USDA Under Secretary for Rural Development Lisa Mensah, MRBF Board President Dr. James Mitchell, USDA Secretary Tom Vilsack, MRBF Executive Director Justin Maxson, MRBF Communications Officer Susanna Hegner.

USDA Under Secretary for Rural Development Lisa Mensah, MRBF Board President Dr. James Mitchell, USDA Secretary Tom Vilsack, MRBF Executive Director Justin Maxson, MRBF Communications Officer Susanna Hegner.

USDA Expands Community Facilities Loan Program

The U.S. Department of Agriculture’s Rural Development office announced rule enhancements that make its Community Facilities Loan Program open to community lenders serving high-poverty rural areas. Under the new Community Facilities Relending Program, USDA can make long-term, low-cost, fixed-rate loans to “re-lenders,” who will re-loan the funds to develop essential community infrastructure in persistently poor areas.

Read the Federal Register notice.