The Richmond Fed recently hosted national, regional and local organizations whose influence could help resolve some of the issues rural communities and small towns face when trying to fund their projects.
The Rural Investment Capital Development Expert Convening took place in Charlotte, North Carolina, on May 30–31 and brought together Bloomberg Philanthropies, the Annie E. Casey Foundation, local foundations such as The Claude Worthington Benedum Foundation and The Harvest Foundation, the North Carolina state agency responsible for pandemic funding, community development finance experts, and regional and local representatives of different types of capital. During their two days of information gathering and sharing of ideas, they tackled how to create easier access to funding for rural communities that are trying to thrive.
“Too often, small towns and rural communities do not receive economic investments that are needed to bring good ideas to reality,” said Jason Smith, the Richmond Fed’s senior community development advisor, who organized the event in collaboration with several participating organizations. “There are issues on the supply and demand side. On the demand side, rural regions have less people who can develop strong project proposals with a business case to attract investment. On the supply side, different sources of capital are not well aligned to finance strong rural proposals.”
Smith noted that even when there is an availability of funds for rural communities, those communities often can’t access them because of multiple obstacles. “We talk a lot about communities being ready, but the supply side of the money should be easier. Current systems make it hard for small communities to access capital. For example, sometimes a deal requires money from 10 different places, with different hoops to jump through and the need for matching funds to make a project work.”
This inaugural convening provided a forum to not only raise awareness about these challenges, but also to explore potential solutions. Discussion topics included: “What are the opportunities to pool patient, creative and flexible capital?” “Where could we have the greatest impact and influence?” “How can the Fed best support what’s working?” and “What does success look like?”
In addition to some attendees helping lead some sessions, Richmond Fed President Tom Barkin, the Bank’s Community Affairs Officer Carrie Cook, and the Bank’s Community Development team members Jarrod Elwell and Smith led conversations on issues ranging from the importance of helping communities prepare through pre-development investments to ways capital sources can align to form a better resource ecosystem.
The Richmond Fed also used the convening to announce the naming of an initiative it is spearheading to address capital access issues in rural communities and small towns. Through the Rural Investment Collaborative, the Bank is collaborating with a steering group made up of rural hubs across the Fifth District to provide training that can help more communities develop strong project proposals. The Bank is also convening national and regional funding sources to help them increase the availability and alignment of funds needed to bring investable projects to life.
The Collaborative has two working groups, with a third scheduled to be added, to explore all facets of issues related to rural communities accessing, absorbing and utilizing capital.
By bringing together the Collaborative steering committee and attendees of the late May philanthropy convening, the Bank aims to identify organizations and individuals who can improve upon current practices.
Cook said the convening will help drive stronger community impact. “Collaborating to improve capital access in small towns and rural communities is a core focus for our Bank. We look forward to continued research, partnership and engagement that promotes economic mobility in under-resourced communities across the Fifth District.”
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