Foundational Assets to Build On

Central Appalachia has a strong foundation of community organizing and community economic development (CED) that has been more than 40 years in the making, including two of the country’s most respected and longstanding rural community development financial institutions (CDFIs). Based in Appalachian Kentucky, Fahe and Mountain Association have provided innovative, values-based approaches to housing and community economic development since the War on Poverty. They have long worked alongside other CED organizations at the local and state levels to provide entrepreneurial support, small business lending, and other services. As coal employment declined in the 1980s and 1990s, these organizations pursued asset-based development strategies informed by grassroots leaders and a shared commitment to economic, environmental, and social justice. Over this period, CDFIs and CED organizations built expertise and track records around industry sectors such as local foods, clean energy, entrepreneurship, and sustainable agriculture. 

Despite these assets, support for the CED infrastructure was unreliable and inconsistent. The Appalachian Regional Commission (ARC) provided important resources, particularly when the political winds favored community economic development priorities. It was occasionally possible to secure capital from banks and other private sources. The strongest organizations, especially those with a regional footprint or specialized expertise, attracted grants from national philanthropy, but funding was often short term and restricted to specific programs. Philanthropy within the region was mostly local and often tied to traditional coal interests. The region’s notorious “philanthropy gap” (grantmaking in Appalachia was 10 percent of the national average per capita as recently as 2014)¹ was exacerbated by sparse relationships and little coordination among regional foundations or with national philanthropy. 

1 According to Grantmakers for Southern Progress and the National Committee for Responsive Philanthropy, coal country receives an average of $43 per capita in annual grantmaking compared with the $400 national average, $1000 in California, and $4,000 in the Bay Area.

Coalescing Around Common Interests

In low-resource rural communities where organizations play multiple roles, collaboration is a necessity rather than a luxury. Fahe’s network approach illustrates how no single organization or strategy is sufficient to match the scale of geography and challenges facing the region. Yet even in the absence of formal partnerships, the region had a natural ecosystem and a “we” orientation to CED that only deepened as economic dislocation challenges grew. Community economic development leaders reminded funders –  and each other –  that the challenges they faced were generations in the making and would not be easily fixed. Economic transition would be slow, hard, and expensive, requiring collaborative infrastructure to go the distance.

Over time, networks in Ohio and Kentucky continued to coalesce around place-based strategies. Faced with the loss of 1,000 manufacturing jobs in the early 2000s, the Appalachian Center for Economic Networks (ACENet) and Rural Action collaborated with university, arts, and philanthropic organizations to design Regional Flavor, a placemaking economic strategy based on Southeast Ohio’s unique tourism and local food assets. In Kentucky, a shared commitment to economic and social justice led Mountain Association and Kentuckians for the Commonwealth (KFTC) to develop complementary strategies to support entrepreneurs and advocate for policies to support a clean energy economy. In both cases, trust and a common analysis increased alignment between grassroots organizing, community economic development, and philanthropy and laid the groundwork for shared goals and strategies. 

While most collaborative relationships developed within individual states, a network of community development groups recognized the need for regional-scale strategies. The Central Appalachian Network (CAN) began in 1992 as an informal peer network of six nonprofit chief executive officers based in Kentucky, Ohio, Virginia, West Virginia, and Tennessee. As their relationships grew –  and with encouragement and financial support from national funders – CAN members began to learn together, develop a common analysis of the region’s challenges, and share promising solutions. At its 2009 convening, which included regional funders, CAN launched a collaborative initiative to support small and mid-size farmers, connecting them to buyers to take advantage of the growing demand for local foods. Over time, CAN honed its role as a collective impact network to pilot efforts, deploy strategies, and measure the impact of promising sectors to support economic transition.

Bottom-up Solutions Emerge 

Despite the rapid drop in coal employment and a global financial crisis, traditional economic development entities provided few solutions for the region’s economic transition in the first decade of the 21st  century. Instead, community-based anchor organizations, such as those described above, offered much-needed alternatives to an extractive economy that had failed to build local wealth and no longer provided employment opportunities. Using an asset-based development approach, these organizations developed strategies that were broad enough to apply regionally but flexible enough to adapt to each community’s unique assets. Local and regional innovation around such sectors as sustainable food and forest products, energy efficiency and renewable energy, and outdoor recreation and tourism attracted the interest of public, private, and philanthropic partners. Community development financial institutions and other CED organizations provided technical skills, while relationships with grassroots leaders grounded these “bottom-up” solutions in the culture and values of the region. Increased trust and alignment during this phase set the stage for a new narrative and regional economic strategy.