Recent research from the National Center for Responsive Philanthropy shows that only 6 percent of grants from foundations in the U.S. go to rural places. National foundations spend $4,000 per capita annually in places like New York and San Francisco, but in Appalachia, that number goes down to $43 per capita. The Foundation for Appalachian Kentucky is working to change that.
They’ve invested more than $9 million in southeastern Kentucky since 2009 through grantmaking, which is the primary way they support organizations. In 2018 alone, the Foundation distributed more than $3.4 million.
“We are pooling resources, leveraging private dollars with public funds, and tackling entrenched systemic issues with people in communities they have loved for generations, or have come to love as their new home,” Foundation for Appalachian Kentucky Executive Director Gerry Roll said in a recent op-ed. “It’s not happening quickly, and it’s not going to be cheap. But it is happening.”
There are 1.2 million people living in Appalachia Kentucky’s 54 counties. That’s more than a quarter of the entire state. The Foundation believes that funds invested responsibly in and with the people who will be impacted the most, are what will transform southeastern Kentucky, and subsequently, the entire state.
In 2017, the Foundation worked with Kentuckians Brook and Pam Smith to establish and house a new social-impact investment fund, the Appalachian Impact Fund (AIF). The Smiths wanted to start the fund because they recognized the immense needs and challenges that existed alongside the region’s promises and opportunities, and they felt a responsibility to reinvest in the region.
Brook has a longtime relationship with Eastern Kentucky through several decades of providing surety bonds on behalf of the construction and mining industries across the region. Recognizing that their personal wealth is deeply tied to mountain people, land and communities, the Smith family felt a personal and social responsibility to reinvest in the region.
The Smith family hired philanthropic advisor and Eastern Kentuckian Lora Smith (no relation) to help develop the operating model, set strategy with the board, and serve as the Fund Manager.
“The opportunity to co-create the first social impact fund located in and serving Central Appalachia was an exciting prospect. This was the first time I could see the possibility for a direct reinvestment strategy to emerge and grow for coalfield communities that shifted resources and power back to local people,” AIF Fund Manager Lora Smith said.
AIF was established with a multi-million-dollar commitment from the Smith family and deploys capital to community-led initiatives. AIF’s strategies are informed by the Foundation, local leaders and a mission to support equitable economic transition in the region. In less than two years, AIF has leveraged an additional $3.5 million outside the Smith’s investment.
The Appalachian Impact Fund focuses on supporting three main areas:
- Geographically anchored communities, so small towns and counties can provide opportunities for entrepreneurship and amenities that cater to local life and visitor experience that support and promote the best of Appalachian Kentucky’s cultural and natural assets. This includes:
- Arts and culture enterprises
- Community revitalization through repositioning historic buildings and infill (developing vacant parcels within built areas)
- Visitor economy infrastructure including attractions, hospitality, amenities and culinary enterprises
- Workforce Empowerment, so people can transform human and natural capital into financial capital for the benefit of the region. This includes:
- Affordable and energy efficient housing
- Transportation options and alternatives
- Rural childcare and early childhood development
- Community and business-driven workforce education
- Locally Controlled Philanthropy, because communities know best what their challenges and needs are, and the creative strategies and plans to solve those challenges. Community controlled and directed philanthropy is one of the building blocks for creating healthy, vibrant and sustainable local communities in rural places. This includes:
- Support of the Foundation for Appalachian Kentucky and the geographic component funds of the Foundation
- Civic capacity and good government
AIF envisions Eastern Kentucky as a place of unique, thriving local economies that enhance the existing natural and cultural assets of the region and offer economic opportunity for all people, while keeping ownership, assets and wealth rooted in local communities.
Ensuring our rural areas are invested in with philanthropic dollars is critical to building Appalachia’s New Day. To support locally-controlled philanthropy in Eastern Kentucky, please find information about donating to the Foundation for Appalachian Kentucky here.
About: This is story #38 in the Appalachia’s New Day campaign, a new storytelling effort launched in June 2019 by MACED for Eastern Kentucky communities. We can work with you to help identify, shape and amplify stories about businesses, programs and initiatives in your community that are helping build a new economy. Read more stories here. Contact us or sign up here if you would like more details.