Our Region’s Journey
An Introduction
On a crisp fall day in September 2016, dozens of people made the circuitous journey from all corners of the Central Appalachian region to Charleston, West Virginia, to tackle a big question: What will it take to accelerate the flow of impact capital into Central Appalachia to achieve transformative economic, social, and health outcomes for the region? The Appalachia Funders Network had convened community development practitioners, financial institutions, public and private sector funders, and national impact investing experts to address this increasingly urgent topic. The region was facing deep and long-standing socioeconomic challenges made worse by the collapse of the coal industry. Regional actors had been “investing in ourselves” for over a decade, building cross-sector collaborations that could grow key economic sectors and advance a shared vision for a just, resilient, diversified, and inclusive economic transition in Central Appalachia. But we knew that transformative change in our chronically low-wealth and underinvested region would require new resources and external investment.
Everyone at the meeting understood that the solution to regional economic transition was not a silver bullet but rather “lots of silver BBs,” but they also recognized that to invest in Appalachia, national funders and investors would need an accessible, effective ecosystem to organize and develop investable opportunities at scale. Over the course of three days, we developed a collective vision for a thriving regional community investment system, began to map the existing system and identify missing components and capacities, and agreed on a set of values to guide a community-led process to achieve our vision.
From the 2016 meeting | Courtesy of Invest Appalachia
From the 2016 meeting | Courtesy of Invest Appalachia
Five years later, Central Appalachia is seeing that vision become reality. We have mature networks and high-capacity organizations working collaboratively to dramatically increase the pipeline of investable deals in key sectors. Capacity-building work has broadened and deepened the skills of community-led organizations to create a more inclusive investment ecosystem. And a new social investment fund, Invest Appalachia, is being launched to aggregate opportunities, coordinate strategies, and provide large-scale integrated capital to drive economic transition.
A community investment ecosystem refers to the key actors, resources, and supporting conditions that enable the flow of investment capital to community priorities. It includes the people and organizations that help to shape projects and get them ready for investment, the financial intermediaries (e.g., banks, community development financial institutions, foundations) that provide various forms of capital, as well as contextual factors (cultural, regulatory, economic, political) that constrain or encourage community-focused investment.
This piece asks: How did a persistently poor, economically marginalized, chronically underinvested region build a community investment ecosystem with the capacity to absorb and deploy catalytic capital for transformative change? And what have we learned along the way?
At the core of this story lies a commitment to self-determination and a central focus on equity, in both process and outcomes. A shared analysis united partners around key sectors and a framework for economic transition. This common vision and trusting relationships supported the growth of collective impact networks within the community economic development and philanthropic sectors as well as cross-sector partnerships that collaboratively developed priority industry sectors and aligned strategies. Finally, a long-term commitment to building technical and community capacity and infrastructure ensured that the ecosystem is not only effective but also accountable and responsive to the people and places of Central Appalachia.
Central Appalachia’s story is specific to the region and the partners that created it, yet it offers lessons for other under-resourced places faced with persistent poverty and structural inequities. By tracing the work that preceded the catalytic 2016 meeting and the subsequent progress over the last five years, this story illuminates key factors that accelerated the region’s ecosystem development. By showing that it is not only possible but imperative to develop comprehensive approaches to community investment in low-resource regions, we hope it can inform the broader community investment field.
Background
Appalachia is often characterized as the “other” America on the basis of “hillbilly” narratives, its status as the poster child for the War on Poverty, and its century-long role as an internal resource colony for the country. While the region’s specific history as an extractive mono-economy has exacerbated inequities and limited investment in human capital, its persistent poverty is emblematic of structural inequities built into our nation’s social and economic systems. Racial and class disparities have intertwined with other structural barriers to limit employment opportunities, produce health inequities, and foster social injustice.
Yet, like other persistent poverty regions, Appalachia has significant assets: resilient people, unparalleled natural beauty, a heritage of craft and industry, the legacy of organized labor, vibrant culture, and a love of place. Perhaps its most important asset is a strong sense of self-determination that is fueling a community-led economic transition. This is the story of how the people of Central Appalachia capitalized on the region’s assets and worked together to create an ecosystem to invest in transformative change.
Courtesy of Foundation for Appalachian Kentucky
External factors that shaped that ecosystem include the rapid decline of the coal industry, the global financial crisis, and trends in philanthropy such as the growth of impact investing and particularly the DivestInvest movement. Internal factors include the grassroots movement to create a new narrative and framework for Appalachian Transition; the growth of nonprofit, philanthropic, and cross-sector networks; and the intentional development of a community investment ecosystem.