Report Calls for New Partnerships to Address Poverty in Rural America

Report Calls for New Partnerships to Address Poverty in Rural America

To address persistent rural poverty in America, the philanthropic, nonprofit, business, and government sectors must form new partnerships and make investments aimed at catalyzing broad-based economic growth, a report from NeighborWorks America argues.

Released at NeighborWorks America's first national conference on rural poverty and economic development, the report, Turning the Tide on Persistent Rural Poverty (20 pages, PDF), found high rates of persistent poverty — defined as at least 20 percent of the population living in poverty for at least thirty years — in rural areas, primarily Appalachia, Indian country, the Mississippi Delta, and colonias in the Rio Grande Valley. According to the study, factors contributing to the prevalence of persistent poverty in rural areas include population loss due to out-migration, lack of accessible transportation and other vital infrastructure, and reliance on resource extraction. In addition, many rural communities lack services and community development resources; receive limited federal and philanthropic funding, in part due to mandated matching funds that smaller, less well-resourced organizations have difficulty raising; structural bias; a sense of hopelessness; and, in the case of Native-American communities, legal restrictions that hamper business transactions such as collateralizing business loans or home mortgages using trust land.

To address persistent poverty in rural areas, the report calls on business, government, and philanthropy to increase the supply of consumer banking services and partnerships with community development financial institutions in rural markets; provide broadband connections, training, and equipment more deeply into rural communities; and boost commercial lending to grow small businesses and encourage local entrepreneurship. Developed with input from NeighborWorks network members and other community-based nonprofits, recommendations include clustering investments to maximize impact, supporting community leadership development, promoting investment using new models that leverage public resources with philanthropy and private equity, and partnering locally and regionally to achieve economies of scale. "We need to be intentional about investing in communities to help them go from opportunity deserts to thriving places," said Bill Bynum, CEO of HOPE Credit Union, in the report.

NeighborWorks America also announced this week that its network leveraged more than $3.1 billion in investment in rural communities in 2016, serving a diverse cross-section of residents, including current service members, veterans, and seniors.

"We are excited by the economic impact the NeighborWorks network is having in rural communities across the country, but we know that more is needed and can be done," said NeighborWorks America president and CEO Paul Weech. "This new paper contains straight-forward recommendations that will contribute to significant economic and community improvement."