Investment is a critical part of any healthy, growing economy, and plays a key role in rural economic development.

During this seminar presented by the Federal Reserve Bank of Richmond on June 25, 2026, experts discussed the barriers to community investment in smaller towns and rural communities.

The seminar featured insights from the Richmond Fed’s Rural Investment Collaborative as well as research on factors that support community investment.

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Place-Based Strategies: Strengthening Rural Economies through Investment (video, 1:28:25).
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Transcript

Whitney Felder

Good afternoon, and welcome to the second seminar in the Federal Reserve’s 2026 Community Development Research Seminar series—Place-Based Strategies: Strengthening Rural Economies through Investment. I am Whitney Felder, marketing communications specialist with Fed Communities.

Today’s seminar, brought to you by the Federal Reserve Bank of Richmond, will foster a research-driven conversation around community development finance ecosystems that help address barriers to community investment in small towns and rural communities. During today’s 90-minute session, there will be a panel discussion and an opportunity for you to ask questions. Now, for just a few housekeeping notes. First, please keep in mind the views shared during this event do not necessarily represent those of the Federal Reserve Board of Governors or those of the Federal Reserve System.

Second, please be aware that this session is being recorded, and it will be accessible to you on the Fed community’s website within two weeks after this event has ended today.

As far as logistics, we are going to have microphones muted, but we will be taking questions throughout portions of today’s conversation. You can submit your questions using the Q&A feature. Now I will go ahead and turn it over to Anna Kovner, Executive Vice President and Director of Research at the Federal Reserve Bank of Richmond for a brief welcome and introductory remarks. Anna, take it away.

Anna Kovner

Great. Thank you so much for the introduction, Whitney. I appreciate everyone who’s joined us remotely today for this seminar. Across the Federal Reserve system at all 12 regional reserve banks, as well as at the board of governors in Washington, community development teams dedicate themselves to understanding the experiences of low and moderate income areas. These efforts are rooted in mandates from Congress and derived from fair lending laws and the Community Reinvestment Act. Our team at the Richmond Fed takes several approaches to understanding community development, investments, and community credit access throughout all types of geographies in the Fifth District. One approach is through research on Community Development Financial Institutions or CDFIs, where every two years we lead system efforts in the creation, distribution and analysis of the Federal Reserve CDFI survey, where we glean insights on these organizations, their demand and capacity changes and how they’re faring operationally.

In 2025, the CDFI survey revealed that despite facing technology, staffing and capital challenges, most CDFIs were experiencing strong and persistent demand. We also learned that their ability to meet demand hinges on their access to capital sources, and that federal funding enables many CDFIs to deliver unique products and services to a wider number of borrowers within their communities.

Our CDFI research does not stop there. Last month, Surekha Carpenter, a senior research analyst on our CDFI survey team and Borys Grochulski, one of our senior economists, co-authored an economic brief, highlighting CDFIs as an instrument to overcome market failures and communities that have been under invested in and under provided with financial services. This research discussed, however, that studies find that the positive social and economic impact of these investments is only possible with sufficiently intense concentration of CDFI investment. Small, thinly spread investments don’t generate measurable positive external impact.

Given these findings, the question becomes, how do communities attract hefty enough place-based investment to generate the positive externalities that they need, especially when some communities have been under invested in for a long time? I hope some of the conversations we’ll be having today will shed light on that question. At the Richmond Fed we have a particular interest in community and economic development in rural areas. In the United States, around 70% of all counties are rural, and these rural counties contain about 23% of the population. The Fifth District is no exception, though our share of rural counties is smaller measured by the number of counties, about 60% of our counties. A quarter of our population lives in rural areas. In order to make sure we understand the rural economy, last year we engaged in 40 to 50% of our external engagement focusing on small towns and rural focused settings.

We strive to highlight rural needs through the connections we have formed, as well as through our research, and we’ve gained a thorough understanding of how place-based investment strategies are crucial to uplifting rural communities and improving their economic health. Earlier this year, we launched the Center for Rural Economies to highlight and expand upon our work in this space. The center generates rural focused research, supports knowledge sharing, and builds partnerships that can help rural communities thrive. As part of this work, we host the annual Investing in Rural America Conference, a national convening that brings together rural leaders from across the country to explore strategies that strengthen local economies. This year’s conference is September 30th through October 2nd in Asheville, North Carolina, and is being held in partnership with the Federal Reserve System and several partner organizations. We hope you can join us. We also host an Investing in Rural America webinar series that brings conversations about rural economies to you virtually.

The Richmond Fed’s community development team also leads the Rural Investment Collaborative, an initiative that addresses the supply and demand barriers that small town space in accessing capital for community and economic development. A central feature of the Rural Investment Collaborative is its annual 16-week community investment training program. This cohort-based training program assists small towns and rural organizations in developing investment-ready community and economic development proposals, and making connections with potential capital providers. The program covers identifying investment opportunities, understanding the rural investment ecosystem, learning the financial elements of an investment building financial acumen, and tapping into technical assistance programs. Applications for the 2027 community investment training cohort are open now through July 10th, and we encourage organizations within the Fifth District, South Carolina, North Carolina, Virginia, West Virginia, and Maryland, as well as Washington, D.C. to apply.

In addition, the Rural Investment Collaborative brings together community development experts within the Fifth District to provide thought partnership and guidance on advancing investment in our rural areas within our region and across the country. Taken together, we learn from rural investment collaborative participants, advisors, and evaluators, all of which shapes how we approach our research. Our session today is going to try to bring all of these pieces together. We’re going to hear from several experts on CDFIs, philanthropic grant makers, and community development programs to better understand how place-based strategies can encourage investment in and strengthen rural economies.

First you’ll hear from Merissa Piazza from the Cleveland Fed, who will discuss her work on CDFIs and economic development, and Michou Kokodoko from the Minneapolis Fed who will discuss the role of native CDFIs and their financial products and services. Our second panel will showcase Nicholas Chiumenti from the U.S. Department of Agriculture to present on rural philanthropic investment, as well as Devon Winey from Mount Auburn Associates who will be sharing programmatic evaluations of place-based investment programs, including our own rural investment collaborative.

Thank you all again for joining us, and we’ll now turn to our first presenter. Merissa Piazza is a lead policy analyst in the Community Development department at the Federal Reserve Bank of Cleveland. In her role she connects analyses and apply research related to workforce and economic development among other issues affecting low- to moderate-income communities. Merissa, I’ll turn the floor over to you.

Merissa Piazza

Thanks, Anna. And good afternoon, everybody. I’m Merissa Piazza, and I’m with the Federal Reserve Bank of Cleveland. I’m going to talk today more broadly about the rural community development financial institutions play in community and economic development. This research started because CDFIs are important actor in economic development deals. I mean, this is acknowledged by economic developers, but outside of the practitioners in this space there’s very little discussion about CDFI’s role in making deals happen. This research takes place in two parts. One is a quantitative assessment of the economic contributions of CDFIs, and then a qualitative investigation looking at the value beyond the money invested. Next slide, please. Disclaimer: the views expressed in this presentation are those of the author and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. Next slide, please.

So, as an introduction, if you’re new to this space, welcome. Community Development Financial Institutions or CDFIs were born out of the need for financing and low to moderate income communities in the 1960s and ’70s, a lot of this was around trying to build affordable housing. And over the last several decades this has expanded, especially with the Community Reinvestment Act of 1977, and all of this investment has expanded to include small business lending, commercial real estate investments into the state we are now. CDFIs are mission-driven lenders who provide financial products and qualified investment areas, which include low to moderate income communities. And many of the CDFIs are nonprofits, but they can take a variety of different shapes. And these institutions seek to overcome a variety of challenges in LMI communities by increasing access to credit and capital both for consumers and for businesses.

And as mentioned, CDFIs can come in a variety of different forms. They can be credit unions, so that’s a very common thing when you think about a credit union that’s actually a CDFI. Banks, loan funds among others. Some of these take deposits and some of them just loan out money. Next slide, please.

Beyond understanding what a CDFI is, I think it’s important to have some kind of context about community development versus economic development for this conversation. These research and practice areas have historically been considered two different work streams, but more and more they’re converging. This is happening based upon the understanding that one, community development practitioners can’t create vibrant spaces if people don’t have jobs. And it can be difficult to attract and retain companies and workers for economic development purposes if communities don’t have quality-of-life amenities. So, having these twofold conversations of community development and academic development are important.

From the academic side, there’s some existing literature in this space related to CDFI investment. A lot of this has been concentrated in New Markets Tax Credit analysis, which is a type of tax credit that is also administered by CDFIs. This can be for a variety of particular reasons. These tax credits are really large and contribute to economic activity. And they allow for a lot of variation in quantitative models. These studies do show that there are associations between New Markets Tax Credit and economic outcomes such as business growth, jobs, and income. There’s a little less literature that solely rely on CDFI contributions with mixed results related to economic outcomes. Next slide, please.

We’re going to jump right on in to the study and look at the Economic Contributions of CDFI Investments. Next slide, please.

Just to go over a little bit about the data use for the investigation, and this is also really helpful for researchers and practitioners on the call if you’re not particularly familiar with CDFI fund data. The CDFI Fund is a department with the U.S. Treasury to help build capacity with CDFIs. And they provide transaction level data on CDFI investments. These investments are recorded in a variety of forms, and they tell if it’s for a business or if it’s for its home or if it’s for a housing development. Again, all this data is public and it’s available on the CDFI fund website. CDFI data, I then combined all the CDFI data with different data sets that you can see here to do the assessment that was investigated. I will say that there are limitations to the CDFI data, because it only includes data from CDFIs that receive rewards, and this does not include the universe of CDFI investment. So, please take this information as directionally informative. Next slide, please.

Let’s get into the results. This analysis was done for the Fourth District, as well as the United States. In our sample, the CDFIs invested $51 billion throughout the United States in 2022, and $1 billion across the Fourth District. Total CDFI investment from 2018 through 2022 showed an increase in the dollar amount and number of tracks receiving investment. And there was a large increase in the number of new CDFIs certified. The largest portion of this investment occurred in two major categories, housing and business. The largest share of CDFI investment in our district in 2022 was in housing, and this includes in the loans made for home purchases, home improvements, construction, and the rehabilitation of single and multifamily housing. Business investment made the second-largest contribution, and this could have been investment for for-profit and nonprofit businesses. As you can see, the numbers are always interesting, but they only provide so much information. Next slide, please.

But if you’re involved in CDFIs, CDFIs do a lot more than just provide investment dollars. They help with technical and financial literacy. They provide all types of technical assistance. They help connect investors with resources such as paperwork, environmental assessments, all of this thing that isn’t supported by a number. So, in order to get at this, I ended up talking to CDFIs and finding out what their aspect was. Next slide, please.

So, knowing that the quantitative data underestimated the contribution of CDFIs, this research engaged in qualitative interviews to understand how these leaders saw CDFI activities and why they believed that these activities were important in supporting community and economic development. I chose to focus only on loan funds. As we had mentioned earlier, there’s different types of CDFIs. Loan funds are really the way economic development is going to happen, because you need a larger amount of money to do, say, build an apartment building. So, these interviews specifically only focused on loan funds, but the focus was on how interviews saw the role of CDFIs in the financial ecosystem, their connections with economic developers and banks, and where they saw the space going in the future. I will note that because each CDFI has its own mission and lending pattern, information from one CDFI is not representative of the whole industry. Next slide, please.

There’s going to be a lot of really fun quotes that’s the best part about qualitative research is you get to hear what people say. So, I’m going to talk about the key themes and you can read the quotes along while I talk. So, three main themes were found. One, CDFIs act as a connector in economic development. They provide key supports. They can be a catalyst. They really can help with facilitating and making specifically really tough deals happen. Second one, they provide credit and an investment as a lender of last resort. Third, they provide technical assistance. Next slide, please.

As you can see from the quotes here, interviewees discussed how CDFIs play a role as a catalyst and a connector in the financial ecosystem. CDFI leaders reinforced that the idea that both community and economic development work together to create these vibrant neighborhoods. And many CDFIs that engaged in larger economic development projects, whether it was real estate or affordable housing, found the process to be a fluid one forged between the relationships that they have built either on the banking side or on the economic development side. So, I think a lot of people talk about how banking is relationship-based. Same thing with economic development, so it was great to hear. Many loan fund CDFIs could easily recount several projects that would not have happened if it weren’t for the CDFI investment. These projects include helping a nonprofit daycare purchase a business, help purchase their building, transform vacant buildings into affordable housing, construct mixed use development, including much needed grocery store and LMI communities, so a lot of the things that are kind of difficult to finance.

Many CDFIs have a deep understanding of the needs of their community. One CDFI even pointed out that their staff live in the investment communities. They know the properties in the service area. You know what your community needs. So, if your banker lives in that community, they know how to help. Next slide, please.

A lender of last resort was another key theme. CDFIs are sometimes also categorized as a lender of last resort, because many CDFIs provide capital in ways that the private market can’t. CDFIs can braid their various funding streams from public, private, and philanthropic dollars to assist in making loans where traditional banks cannot. Their flexible underwriting allows them to take on riskier loans, and they can provide technical assistance to help shepherd applicants through this process. Some CDFIs recognize that the funding model allows them to take a chance on entrepreneurs or finance deals that banks wouldn’t. Since we talked to loan funds who weren’t depository institutions, CDFI interviewees discussed how they work very fluidly with commercial banks, because they aren’t seen as competition. Mind you, this is specifically from loan funds. So, hopefully these quotes give you kind of a flavor for what was happening. Next slide, please.

And technical assistance and financial coaching. By far the most discussed topic amongst interviewees was technical assistance and how this can make a deal happen or get somebody who wouldn’t have been able to get financing. CDFIs that directly financed business or small developments talked how they walked their clients through the financial process, whether it was helping them understand the application, whether it was helping them get creditworthy, whether it was helping people understand what the investment entailed. The technical assistance provided value beyond what is offered in traditional banking. Since one interview, we explained a bank may require everything to be all set, but a CDFI can really hold somebody’s hand the process. Technical assistance can go beyond underwriting to capacity building for governments, municipalities, developers. Some of this was helping with tax credit applications, environmental and financial feasibility, and understanding who to talk through to get things done.

It’s always great when you quote, “Have a guy. I got a guy who can help me fix something at my house.” So how can the CDFI be your guy? “Hey, call that person at City Hall and they can do X, Y, and Z.” Or. “Call this person at this organization and they can help you do a financial feasibility analysis.” Having somebody help you is just very key. One interview we discussed how CDFI was involved in a complicated real estate finance deal that consisted of CDFI acquiring a property, finding the lender, and then using their expertise for tax abatement and tax credits, all of this just to get it to the financing stage. And all of this was great because it helped create affordable housing units and what would be a vacant and derelict building. Next slide, please.

We talked quickly about challenges and opportunities in the market. You can’t have an assessment and then not see where the ball is going. So, some CDFIs discussed the precarity of their situation depending on how their funding model was, especially if they were relying solely on grants to make loans. Many nonprofits like any nonprofit were having staffing capacity and shortages. Many interviewees discussed capitalization and how they were structuring their loan funds, and they were looking beyond federal and CRA investments to strengthen their balance sheets. And current economic conditions were a factor. Some indicated there were an endless number of deals while others saw the market slowing. Again, I think that’s just a function of every CDFI is different. Next slide, please.

This is one of the best quotes. “Dang near every project we do is a but-for, right?” So these conversations revealed interesting subtleties about how CDFIs play a key role in community and economic development using a vast network of referrals to bankers, economic developers and municipalities and just finding out how to get things done.

Interviewees discuss their mission-driven lending in LMI neighborhoods, how this can contribute to economic and community vitality. Additionally, they highlighted the importance of technical assistance and capacity building into creating success for businesses for nonprofits and for individuals in making projects happen. There’s a QR code for the report. Feel free to check it out. There’s a lot of other great anecdotes in there. At this time, I’m going to pass it off to Michou Kokodoko. Thank you. Michou is a senior policy analyst in the Community Development Department at the Federal Reserve Bank of Minneapolis. He leads the bank’s efforts to promote effective community bank partnerships by increasing awareness of community development trends and investment opportunities. Michou, the floor is yours.

Michou Kokodoko

Thanks, Merissa. Good afternoon, everyone. I’m happy to share findings from this survey with you all today. Now, this research provides some insight into how community-led finance addresses various investment in near communities, many of which of course are in rural and small town settings. And the Center for Indian Country Development, the Minneapolis Fed commissioned this work. And I have on this slide the names of my co-author and the affiliates of the center. And so, over the next few minutes we try to explore the diversity, practices and challenges of the Native CDFI industry. Next slide, please.

Of course, the usual disclaimer, the views that are expressed here are mine and not necessarily views of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. Next slide, please.

I like to set the context and talk a little bit about the problems that Native CDFIs were created to address. Now, Native communities face a severe credit gap, credit assets gap. So American Indian Reservation lack proximity to financial institutions and mainstream services are generally scarce. And according to the FDIC survey, Native households are disproportionately underbanked, meaning that they may have a bank account or savings account, but they prefer to use alternative locations like payday lenders and so forth. And then also, this kind of shows that this financial exclusion or this apparent financial exclusion has severe consequences for economic development, home ownership, and entrepreneurship in Indian country. Next slide, please.

So, can we have next slide, please? Now, let me say a couple of things about the approach that we use for the survey. Our approach is deliberatively participatory. So, we spent several years, actually almost four years, I would say, building relationships and understanding Native city fundings before actually designing our survey instrument. What this did was that it ensured that our questions were relevant and that we minimized burden on organizations with already re-instaffed. And as you can see from this slide, we achieved about the 75% response rate among the certified Native CDFIs, and making this a really comprehensive mapping of the industry today. So the survey covered everything from loan products, risk assessment, to organizational challenges and definitions of success, so very comprehensive. Some of our respondents actually spent more than an hour to complete the survey. Next slide, please.

The first finding that I wanted to share with you has to do with the remarkable diversity of the Native CDFI industry. So geographically, Native CDFIs are distributed across the U.S. with concentrations matching where Native populations live. And as you can see on the slide, half operate on reservations, but a third serve urban native communities. Most Native CDFIs, of course, are responded among independent nonprofits rather than tribally owned. And they range from brand-new organizations. So one, as you can see on the slide, that has been operated for over 70 years. And this diversity reflects the place-based emerging nature of these institutions. So, they’re really tailored to the specific communities that they serve. Next slide, please.

Another finding that I wanted to share with you all has to do with the mission-driven goals of this organization. So, Native CDFIs have clear mission-driven goals centered on entrepreneurship, community investment, and financial inclusion. They’re not single product lenders most offer two to three different loan types, and this for them to be able to meet diverse community needs. Micro loans and consumer loans are most common, reflecting demand for smaller dollar credit that’s often unavailable from banks. So critically, the vast majority provide credit counseling and business assistance alongside lending. So, this sort of holistic approach is key to the community development model. Next slide, please.

And this finding is also kind of interesting. It’s about how Native CDFIs assess credit worthiness differently from differently in the conventional lending. While they do use credit scores and income, they do the whole thing when it comes to hard data, but they also heavily rely on soft information gained through relationships. As you can see on the slide, things like character, commitment, engagement. But none on this chart though, they also accept some innovative forms or collaborate on that reflect community realities, like for instance, travel distribution payments or even artwork. So, this holistic approach allows them to serve applicants who will likely be denied by mainstream lenders for staying managing risk effectively. Next slide, please.

This finding also is kind of interesting, and we did this to help us better understand the ethology maybe we observed. So what we did, we conducted cluster analysis and identify four distinct NCDFI Clusters. So we started off with about 19 initial variables. So all these variables cover administrative, operational, geographic, financial scale, product and services, partnership infrastructure and so forth. And I want to say also that we do not choose these variables arbitrarily, but they emerge from three years of engagement within the CDFI committee. Then we reduced the 19 variables to eight through simply inadequacy test. Then the final eight were the age of an entity, the number of full-time employees that they have, and number of loan clients, and the portfolio size of the entity, is the entity located on a reservation or is the entity in urban area? Does the entity offer some business loan? Does the entity offer customer loans?

So, with these final eight variables we conducted principal component analysis, and then not to get into the weeds, but the first three components help explain a lot of the overall variances. The first component, for instance, is associated with five variables, which are the number of loan clients, whether the Native CDFI is independent, whether the Native CDFI is located on reservation, or is the Native CDFI located in urban area, and the number of consumer loans provided. And then the second component explains an additional 20% of the variance and it’s associated with the number of full-time employees on staff and also the portfolio size. And then the third component explains the remaining 40% of the variance and associated only with the age of the CDFI. So after that we did the principal component analysis, then we move over to the hierarchy for plus analysis, which allows us to group similar native CDFIs together based on similarity and then component score.

So you can think of it as a family tree showing which maybe CDFIs are most similar. And then of course, each of the search observational dataset was a signing score for each component. And then that’s how we ended up with the four groups that have on this slide. So we came up with a name to explain the similarities. So, we call the first group Urban oriented. So, in that group we have about 14 Native CDFIs, and these entities serve off-reservation communities with business learning focus.

And the second group that we have was called Established. We have about eight entities in that group. And then they are sort of like the industry veterans with experience in complex products like mortgage lending.

And the third group that we had, High Volume, we call it High Volume, and there are only four entities are in this group. And then these groups have scaled significantly and processed hundreds of consumer loans. And then the final group, or the fourth group, we call it Next Stage. They are the largest one. We have about 21 N-CDFI in that group. They are newer organizations, reservation-based, and still in the process of building capacity. So, each phase has different challenges and opportunities, which has, of course, implications for targeted support. Next slide, please.

And then this finding has to do with shared challenges. I’m sure you probably, as you reflect on this slide, you’ll probably notice some similarity with some of the things that Merissa shared. So despite the diversity and the CDFIs face common challenges and the most critical one is access to capital elected, which you see on the slide over half identify this as the biggest obstacle. And then the amend demand also is starting, capital constraining CDFI report. They could double, triple, or more than triple their lending if they had adequate capital. So, these represent enormous and lost opportunities for community programs. And then also on the slide, you see that staff hiring is equally challenging, and of course it’s largely independent of capital constraints. Many respondents also cite awareness issues, and both potential donors and clients don’t know about Native CDFI services. So, these findings want to clear areas where policy intervention will have hopefully outsized impact. Next slide, please.

I wanted to conclude with some key takeaways. So first, I mentioned that despite the diversity, Native CDFIs share a fundamental identity as community-led institutions that really, really prioritize relationships and education. It’s all about the people that they serve. And then second point, the diversity that we documented means policy support has to be flexible and recognize different organizational needs. And third, and maybe more importantly, there’s a lot of untapped potential. Native CDFIs could be serving two to three times as many community members if they had adequate capital. And this represents not only just funding gaps, but also a community development opportunity. So for policymakers or funders, for instance, focus on role and small-town investment, many CDFIs do offer programs and also what you might say, culturally grounded model that deserve maybe some attention. I can stop there, and now at this time I can turn things over to Anna Kovner.

Anna Kovner

Thank you so much. We can start some of our panel discussion now. I really appreciated hearing from both of your different perspectives on elements of CDFIs from this kind of in-depth qualitative conversation on a broad set from Michou, your focus on a subset of CDFIs focusing on native communities. Let me start with a question for both of you. First to Merissa, when you think about the study that you did, do you see opportunities to think about this type of study, thinking about CDFIs who are located in or focused on rural areas? Based on what we know about rural investment, I’m interested, do you think they would have similar responses either if you asked a different set or thinking about the set of those that you spoke with in that context? Let me start with that and then I’ll turn to you Michou next.

Merissa Piazza

Sure. I think it was interesting you had talked earlier about some of the Richmond Fed studies related to having a saturation effect. Some of the people we did talk to were in rural areas and no surprise to anybody on the call is from a rural area. They do everything. So it was the economic developers and the community, it was one organization. So, I think that’s where some data can maybe help lend with this argument or help with people understanding this. They’ll drop it in the chat. If people are not familiar with the Community Investment Explorer with St. Louis Fed, it can be really helpful. They do some of this CDFI and community investment data for you. I will caveat, it’s only available at the metro and micropolitan level. So if it’s a more rural area, it’s not going to give you what you need, but we’re all data people, and sometimes you got to do the best you can.

But yeah, so I think with anything more rural focus is always needed and having rural practitioners spread too thin I think is probably pervasive amongst what a lot of people know. So, how can we better equip people working in these communities to know and not be spread through thin, I think is something that we’re looking in the future to see what is the difference between what is happening in the CDFI area between rural and urban areas, basically specifically what you were talking about with the Richmond Fed research.

Anna Kovner

Michou, let me turn it to you there, because I’m interested in what the conversations you had in the Native context could tell us about that broader scope of rural. I often think of a defining feature of rural and small towns is that less densely populated area. I’m thinking here about these tight, personal relationships that you are describing and how CDFIs that take advantage of that kind of lending can think of things when you think about how close you might need to be physically to benefit from that type of credit extension. What can we learn about rural from the native CDFI insights?

Michou Kokodoko

Thanks, Anna. I wanted to maybe start with the fact that when you look at the complexities related to Indian Country, there are some important distinctions that prevent direct generalization from native to our rural context. So complexity is related to maybe travel sovereignty, trust land restrictions, and specific legal frameworks that don’t really apply to non-native rural areas. So, these are some distinction that we should keep in mind, but despite these differences, I do think that Native CDFI experiences demonstrate the viability of relationship-based lending and the key markets that you alluded to. And so they also highlight the importance of mission-driven institutions and organizations that are able to offer some culturally responsive products. And of course, they also highlight the importance of patient capital for this organization. I think some of the challenges that I mentioned provide vital lessons for a rural community-related finance broadly, though the data should be interpreted with appropriate caution, given the unique circumstances of the Indian country.

Anna Kovner

Let me turn that question to you, Merissa. Through your interviews, you’re showing the key role that CDFIs can play in financial ecosystems. Some of those things echo things we learned, the importance of the getting communities and borrowers ready, the but-for or lender of last resort really resonated with me when I was listening. How do you see this playing out in rural areas?

Merissa Piazza

Yeah, I think one of the quotes that’s in the report that I didn’t share was somebody talking about how they really know their community, they know who to talk to in their community. And you know how to make that happen. And so, if you’re working in areas, as opposed to say a national, multinational, a larger organization who just puts a branch in, I think that relationship building and having that is important no matter where you are. But I think especially as rural areas, you need specific focus related to that.

I also think that Michou’s point about having people live where they are, having people understand what’s happening in a community, I think having that kind of historical and tacit knowledge is really important as well. So yeah, I think more to be collected on the anecdotal and qualitative side, especially as it relates to how people work together, what that looks like, and how these pieces and parts move together no matter the geography.

Anna Kovner

Thanks. Michou, If you think about the conversations that you had that you highlighted, the extreme variety and the types of financial institutions, as well as the variety in the types of areas, that’s a conversation sometimes we have in our small town work, a small town that has natural resources and assets may differ from another one, access to transportation might differ. When you think about all this kind of variation, is there a single policy or practice that you think would either most benefit CDFI organizations, or the communities as they seek to make themselves capital investment ready? Do you think there’s something that new technologies are going to help with? What should be happening in order to extend and make these organizations more effective?

Michou Kokodoko

Well, that’s a great question. I think given the unique challenges that Native CDFIs face and of course smaller CDFIs in rural country areas as well, I would argue that maybe establishing some flexible multi-year core operating support will be most transformative, that will allow these entities to pay attention to emerging issues like technology to be able to expand geographic coverages. And then also, that will allow Native CDFIs and small CDFIs who operate in the most challenging context to continue to serve the streaming of remote areas with limiting infrastructure and continue to navigate some of the issues that I mentioned earlier. Most of these entities typically chase short-term restrictive grants, and they spend disproportionate time on compliance and reporting. And then of course, as one of the charts that I shared, it showed they struggle to retain skilled staff due to funding uncertainty. And then because of that, they have to turn away opportunities that really don’t fit the narrow program requirements.

So, therefore the kind of support will be the kind flexible multi-year grant support, operating support could be really transformative.

Anna Kovner

Great. Well, thank you so much, Merissa and Michou. That’s a nice transition into the second set of presentations, which are going to think about rural funding gaps. So thinking about where this funding might be coming from, and we’re going to start with Nicholas Chiumenti, Senior Economist with the U.S. Department of Agriculture Rural Development. Nicholas is going to share recent research done in collaboration with the Federal Reserve Board of Governors, looking at the role of philanthropy and grant making in rural communities. Turn the floor over. You’re on mute, Nicholas.

Nicholas Chiumenti

Oh my gosh. Well, thank you, Anna. And my thanks as well to the Richmond Fed for hosting such a great seminar series. As I mentioned, my name is Nicholas Chiumenti. I’m a senior economist with USDA Rural Development. For those of you who may be unfamiliar with USDA Rural Development or who haven’t heard of us at all, we are the only federal agency in the U.S. Government specifically tasked and mandated to serve rural American communities. We have about 3,000 staff and over 80 programs, programs that do everything from direct loans to guaranteed loans to grants for energy infrastructure to housing. So it’s a very broad set of programs that we manage. And I’m delighted to be able to share with you today the work that we’ve done in collaboration with the board of governors of the Federal Reserve, looking at Rural America’s Philanthropic Sector, and the role that grants play in rural communities. Next slide, please.

So, the philanthropic grant-making organizations, these are a very important source of capital and of funding in rural communities that can be highly influenced by their local means, but little work we found has been done as to the scope of the grant-making sector in the economy, much less how it’s been distributed across the United States and how well those resources reach rural communities.

So, the goal of this work is really threefold. First is to develop a definition of philanthropic grant making organizations, one that can be used broadly, and one that also identifies those organizations that are engaged in relevant grant-making activities. So not just things like scholarships, but really we’re interested in things like economic development, community development and community services.

Second, with that, we’re interested in understanding how urban and rural communities differ and their access to these grant-making resources. And also from that the flow of grants to and from rural communities.

I’ll just say a quick note on our definition of rural that we’ve used in this report and that you’ll see in this presentation when we talk about rural communities, rural areas, where we’re talking about are counties not located in a metropolitan statistical area. This is the pretty typical definition used out there in literature. It’s an imperfect definition, but it’s one that aligns best with our county level data that we have available. Likewise, the opposite of that. So, for rural urban areas, these are counties that are going to be located in metro areas defined as urban places. Next slide, please.

Grants and philanthropy, these are incredibly important parts of what we think of as the capital stack for urban or for rural communities. And by that I mean, it’s the combination of funding and financing sources that a community can put together that can combine to promote economic development and prosperity. So, think of combining private sector loans with funding from a CDFI. The grants and philanthropy are a part of that, and it’s a part that can be actually quite flexible in its uses. So funds, grants from philanthropic organizations, they can be used to fund activities that might not otherwise be used to support things like pilot programs, small-scale feasibility studies. They’re also quite versatile. They can be used to be helped to cover costs that might otherwise not be covered for things like technical assistance training, staffing, maybe even just basic administrative expenses.

And possibly most importantly is they can be used to help mitigate risk for private sector investment. They can act as loss absorbing capital that can be used to incentivize private sector investment in communities where in rural communities we may be seen as too risky for a private sector lender to go alone. And specifically, and especially when we’re talking about these mission oriented investments that oftentimes are at work in rural communities. Next slide, please.

I wanted to give just a quick graphic to demonstrate how we think of rural philanthropy and grant making as part of the capital stack for us here at USDA. We really see it as being part of the missing ladders, the missing rungs on the ladders of what we’re able to do. USDA Rural Development, we’re really good at doing $20 million loans to build an energy infrastructure or wastewater treatment facilities. But what we’re really missing out are very small-scale investments, things like $10,000 to train local municipal staff on how to look for and apply for grants in their area.

And so, in terms of where we’re looking to build capacity, in terms of reaching communities that we haven’t served before, they’re playing a very critical role. Next slide, please.

I’ve gotten this far and I haven’t actually given you the definition of what we decided for philanthropic grant-making organizations. And so, our definition is heavily based on the tax code of the United States. And so, we define grant-making organizations as any 501(c)(3) or (C)(4) public charity or private foundation that engages in consistent and meaningful domestic grant making as part of their regular operation. In practical terms, this means in the data that we’re focusing just on U.S.-based grant makers, or just on U.S.-based organizations or based in Puerto Rico that provided at least $25,000 in grants annually on average between 2014 and 2021, which was the years, the eight-year period with which we had data available. We also restricted it to just organizations that engaged in grant making for at least three of those eight years, and where no single year dwarfed all the others. So it was no more than 75% of total grant making over that time period.

Quite obviously our data is coming from the IRS here, specifically it’s coming from Form 990 and 990-PF filings. We also have data on grant flows, which I’ll share some analysis later. And overall what we found, so overall on average there’s about 400,000 active tax-exempt organizations in the United States in any given year. These are your churches, your rotary clubs, maybe your PTAs, but we actually were excluding about 82% of them. So, we’re only a fifth of this number are ones that we identified as being grant-making organizations for our purposes. Next slide please.

What we found is that in any given year there are roughly 75,000 active U.S. grant-making organizations. And in 2021, total grant making from these 75,000 organizations was about $160 billion, and it’s averaged about $116 billion over the period between 2014 and 2021. The actual number of organizations, of grant-making organizations hasn’t really changed during this period over the last 10 years, but what has changed is the amount of giving. It’s grown every year, year over year, pretty consistently. And then these grants have actually broken out grant making organizations by the two major types, private foundations and public charities, which are sort of the two major legal types that are available in the tax code. And so, there’s a lot of esoteric definitions about these organizations in the tax code, but essentially you can think of private foundations as being funded either by a singular or small group of individuals or families.

They’re getting funding that becomes their revenue that then goes into grant making from a very select group, a very small group of people, whereas public charities have a much broader scope available to them. They often are getting donations from individuals like you or I, or private businesses or even governments. What we found is that private foundations were the most common type of organization, of grant-making organization in the country. They made up about 62% of all grant makers on average between 2014 and 2021. They also provided the most in total dollars of grants over this period. It was about 20% more than what public charities provided during this period in total. But if you flip it and you looked at just per organization giving, public charities actually come out ahead. So, on average, even though they make up a smaller group overall, public charities give on average about 38% more in grants every year compared to private foundations. Next slide, please.

I don’t think it’s a surprise to anyone that this is a sector of the economy that is highly urban centered. Most grant-making organizations are based in an urban area. And in fact, what we found is that just 8% of all grant makers during our period that we looked at are located in a rural community, so a county not in an MSA. And for these 8% of grant makers, the grant making from these 8% of grant makers accounted for just 3% of total grant making between 2014 and 2021. So, even though we’re talking about dollar amounts in the billions, it’s a very small slice of this overall pie that the nation has every year. We also found that 52% of rural counties have one or no grant-making organization based locally in their area, and that’s in comparison to about half of urban counties that had five or more grant-making organizations based locally.

We also found some interesting differences in the distribution of public charities. Public charities appeared more likely to be based in urban … Sorry, more likely to be based in rural areas compared to private foundations. About 11% were compared to 7% for private foundations. Next slide, please.

And so, I wanted to include this map. It might be a little difficult if folks are viewing this on a small screen, but I wanted to include it just to sort of highlight broadly what the distribution of grant-making organizations looks like in the United States. Because it’s not just the case that urban areas have fewer, but they’re evenly dispersed and the same for urban areas, that there are parts of the country that are lacking both and oftentimes see a dearth of any sort of philanthropic institution in their area, particularly like the South, Southern United States. In rural Southern United States counties there’s less than one organization, one grant-making organization per 10,000 residents. And this is in comparison to areas like the Northeast and the New England area where there’s an average of over two philanthropic grant-making organizations per 10,000 residents.

But I would say even in states where there seems to be a dearth of rural-based organizations, there still tends to be microcosm, sort of concentrations in urban areas that are available and that are there to provide services. Next slide, please.

This is where I wanted to change tack a little bit and talk about the flow of grants. And so, one thing to note about this slide and the next one is that they’re going to be using our grant flows data, which actually just covers private foundations. We don’t have information on the flow of grants for public charities, which is unfortunate, but we do have them for private foundations. And if you remember, private foundations are making up the majority of both the number of grant makers in total and also total grant making overall. But what we found is that most grant dollars are spent locally. Almost 50% of grant dollars issued by either a rural or urban-based grant maker stay within the same county where they’re based, even at least initially.

So we’re just in this data seeing kind of the first person, the first organization to get a grant from the grant maker itself from where the source of the grant originates. We’re not necessarily capturing that last mile. In fact, it’s probably pretty common that organizations might get grants and funding for multiple sources, use that to maybe make grants themselves, or use to fund services that trickle out further and further away geographically. But regardless, for rural-based organizations in particular, about 46% of all grants are made in the same county in which they originate. The second most common area for them to go, for that grant dollar to end up is in the same state. This is in pretty stark contrast, I think, to urban-based organizations where yes, for urban-based grant-making organizations, the most common area for that grant dollar to land is in the same county. But second to that, it’s actually somewhere else in the United States, outside of its home state, outside of the organization’s home state and home region.

And so, there is an indication here that these urban-based grant makers have the capacity and have the reach to work and perform nationally, whether it’s through connections or through programs that they’ve developed themselves. Next slide, please.

And then lastly, looking at the linkages between urban and rural areas, grants largely come from and are received by urban-based organizations. So, we had about 877,000 grants in our data set. 94% were issued by an urban-based grant maker and received by an urban-based grant recipient. These grants also were the largest in our data set. They averaged about $163,000 during the 2014 to 2018 period that we had data for. What I think is most interesting about this table though is actually rural-based grant-making organizations. Because while over half of grants from these organizations also flow to rural areas, these grants actually are smaller than the ones that flow to urban areas. So, it’s roughly 54% of grants, 15,000 grants go from a rural-based grant maker to a rural-based grant recipient. And on average those grants are about $63,000. Meanwhile, for those rural to urban flows are much larger at about $96,000. Next slide, please.

Finally, I just want to leave you all with a few thoughts. The chief one being that philanthropic, we’ve shown that philanthropic, the grant-making sector is highly urban centric, and this is down to any number of reasons, but this does not necessarily mean that these organizations are just serving rural areas, or sorry, just serving urban areas. It’s entirely possible. It’s actually quite common for organizations, specifically private foundations to have service areas with which they serve. So, whether it’s multiple counties within a state or geographically across the country. So, there’s nothing to restrict a organization based in a city to only serve that city. But we have found that location does matter. Based on the grants flow data, most grant making is made locally, especially for rural-based organizations. And these urban-based grant making organizations do have the national reach and the capacity potentially to be there to bridge the gap between urban and rural places.

What I think this means in terms of bridging the gap for philanthropy for rural communities is that it’s less about having organizations be based in and located in rural places. It’s more about building the partnerships between those places where the urban grant makers are and the rural grant makers, rural grant recipients are. We found that a lot of rural communities receive little or no grant dollars according to our data. And rural grant recipients, whether they’re going to be organizations, individuals, or local governments, they need the knowledge and skills to be able to apply for and seek out grants. Grant writing is a skill, it is a job. And that actually, the lack of those jobs or lack of those skills may be a bigger barrier to accessing these resources than simple geographic access. Next slide, please.

So lastly, if you are interested in more of this report, there’s plenty more to read online. The full report is available on our website, USDA Rural Development’s Rural Data Gateway. There you can download the report, you can download the data behind the report, and we even have a web tool that if you folks can use to access their own community, look at their own county, look at their own community, and download data for that as well. So, thank you.

And with that, I’m going to hand it now over to Devon Winey. Devon is president of the strategy and evaluation consulting firm, Mt. Auburn Associates. Devon will share some of the early qualitative findings from an evaluation of the Richmond Fed’s Rural Investment Collaborative and draw on learning from other evaluations of place-based investment programs to explore what it takes for investment to land in rural places. So Devon, with that, I’ll hand it over to you.

Devon Winey

Thanks, Nicholas. Good afternoon, everyone. I’m here to speak to some of the findings and learning from evaluations conducted by my firm. Again, we’re a consulting firm that specializes in evaluation and learning for philanthropic government and nonprofit clients, with a content focus in economic development, community development, and workforce development. Over the past 15 years or so we’ve spent quite a bit of time evaluating efforts to expand the flow of resources to communities, both urban and rural. Next slide.

That work has offered me a lens into what it takes to encourage investment in rural places that takes a slightly different angle. While sometimes discussions of investment focus primarily on the supply of capital, the evaluations that I’ve engaged in serve as some lessons about the need and opportunities to organize the demand for capital. What does it mean to organize the demand for capital? From my experience, I’ve spoken with a number of community stakeholders who feel like development is something that is done to them, and not by and for them.

Organizing the demand for capital intends to flip that script by ensuring that community identifies the opportunities, frames them for investment, and is able to attract the needed resources helping high-priority economic and community development projects reach the finish line. Next slide.

So, what does it take to organize the demand for capital? I’ve had the opportunity to work with the Center for Community Investment on strategy and evaluation work for the past 10 years. The Center for Community Investment has developed and spread the principles of capital absorption as a path to organizing the demand for capital. The capital absorption framework identifies three functions that need to occur to shift the community investment process, so that local stakeholders rather than only outside investors drive what gets built. The three functions are illustrated on this page. One of them is setting shared priorities, really about clearly defining community priorities. This often involves engaging a range of stakeholders from public officials, private sector, community groups, and residents. That term can seem a little fuzzy. In some of the current work that I’m doing a shared priority might be increasing the availability of healthy, affordable food or helping small business owners become property owners. Just some examples.

A second area is building a pipeline to ensure that there are investible projects aligned with those priorities that are truly ready to absorb capital.

And the final piece is what the Center for Community Investment calls Enabling Environment. I see it as keeping a focus on the system changes that are needed to make the pipelines flow. These can include shaping capacities, policies, practices, available resources that enable the community investment system to be efficient, effective, and community-centered. Next slide.

Mt. Auburn has evaluated a number of initiatives that explicitly or implicitly apply capital absorption principles, including work with the Federal Reserve Banks of Boston, Dallas, and Richmond, the Center for Community Investment, and Main Street America. These efforts span rural and place-based community development strategies. Today, I’ll primarily focus on what we’re learning from the Richmond Fed’s Rural Investment Collaborative, but then I’ll also share a bit about some of the other work underway, and close with lessons that draw across these evaluations. Let’s dive a little more into the Rural Investment Collaborative. Anna gave a helpful introduction to the Collaborative at the outset of the webinar, but let me go a little deeper, particularly on the Collaborative’s effort to organize the demand for capital. The Collaborative is tackling a perceived gap in the ecosystem in that enabling environment, namely that there aren’t enough community leaders who really understand local needs and opportunities, and have the finance skills to take those insights and shape that vision into a viable project to pitch to funders and attract needed capital.

The program theory is really that more capital will flow to rural places if there are more people in rural places skilled at preparing projects for investment. Next slide.

To address this, the Rural Investment Collaborative offers the Community Investment Training program, which is the work we’ve been evaluating to date. The program brings together a cohort of leaders from across the Fed’s region. That program, now recruiting its fourth cohort, uses an experiential learning model in which participants focus on advancing a single project during the training. Participants look to advance projects in areas like small business, social enterprise, community facilities, and downtown real-estate development. The program uses curriculum, coaching, peer learning, and modest financial support to help community leaders trim local opportunities into investment-ready projects. Participants learn how projects move from concept to financing, and how to communicate effectively with potential funders. After completing the program, past graduates have had an opportunity to apply for some additional technical assistance funds for specific products like technical or engineering studies. Graduates are also invited to participate in regular alumni meetings offered “to continue a forum for peer connection. Next slide.

Let me share what we’re learning so far in the evaluation. Our evaluation findings draw on pre- and post-competency assessments, surveys of alumni that track the project progress. We’ve also conducted focus groups and interviews with graduates of the program. At a high level, the evaluation found that the program is highly effective at building participants’ financial fluency and investment readiness. Participants reported substantial gains in understanding capital stacks, financing structures, and the process of moving projects from concept to investment. The chart here shows pre- and post-competency assessment results for the 2025 cohort, demonstrating substantial improvements in participant competency in every category that was queried. Next slide.

Participants are starting to translate that program learning into tangible project momentum. The vast majority see their projects moving forward with a clear contribution from the training program. Alumni linked the training to concrete project progress, including securing pre-development funding, conducting feasibility studies, strengthening partnerships, and generally advancing project readiness. Next slide.

Despite strong gains, accessing investors remains a persistent system-level challenge. According to the competency survey, graduates were least confident in their ability to access needed investor networks to see their projects to completion. Our follow-up survey to see how the projects were going, showed that the majority of participants have secured less than a quarter of the funds needed to cover the total project costs. While some of this is totally understandable, projects take a long time to reach fruition. Our discussions with graduates reinforced the finding though that sparse investor presence in rural markets and/or limited philanthropic appetite for capital projects was a hindrance in their progress.

To be clear, this challenge appears to stem from enabling environment conditions in rural markets, rather than from the particular design of the training program. Next slide.

Just to summarize what we’re seeing so far, the program is building capacity, participants are translating learning into action, and the primary remaining challenge is not knowledge now, but access to capital and investor networks. This really reinforces the importance of pairing demand side strategies with efforts to strengthen the supply of capital. Next slide.

The Community Investment Training program is one approach to organizing demand. As we look at some of the other initiatives that we’ve evaluated, they’ve taken different approaches touching on other aspects of capital absorption, and in many cases taking more of a team-based approach as opposed to cultivating individual leaders. Working Communities Challenge, which recently ran initiatives in rural regions of Vermont and Maine focused on building shared priorities with a focus on cross-sector leadership and community engagement.

Main Street America’s current pilot is focusing on building project pipelines in commercial corridors, and identifying the roles local organizations can play in facilitating investment. Together, these efforts suggest there are multiple ways to strengthen community’s ability to attract and deploy capital. Next slide.

While we’re seeing a variety of ways to organize the demand for capital, let me close with some of the learning and themes that have surfaced across the various approaches about what it takes. First, it takes determined leadership. This work is hard. It takes years and inevitably encounters setbacks like when a particular site falls through, a funding source doesn’t work out, or political shifts affect project progress. The most successful leaders not only persist, but also build partnerships, listen to community priorities and adapt when conditions change.

Second, think bigger. Individual projects are often more compelling to investors and partners when they are part of a broader pipeline and community vision. In some cases, that vision or pipeline is really strongest at a regional scale, rather than within a single neighborhood or corridor.

Third, connects the people doing this work. Across our evaluations peer learning and support consistently emerge as critical sources of ideas, encouragement, and practical problem solving for the folks trying to move this work on the ground.

Fourth, state-level intermediaries can really play an important role. They can help connect local leaders to state resources, partners, and policy opportunities, making it easier for communities to move projects forward.

And finally, maintain a systems orientation. Ultimately, success is not about completing a project. It is improving the conditions that make future projects easier, smoother, faster, and more community driven. The ultimate goal is not one successful deal, but a stronger enabling environment for the next one. With that, I’ll stop and pass it back to you, Anna, for some discussion time.

Anna Kovner

Great. Thanks to both of you for such insightful presentations. I’ll try to incorporate some questions that we’re getting in the chat as well. And let me start with this sort of broad question for both of you. I mean, the statistics about urban versus rural that you’ve showed are really traumatic, and I find myself wondering, how is it that there are so many grant-making organizations based in urban areas despite their missions aligning with the needs of rural communities? Nicholas, if you can start with your thoughts on that if you have … Maybe there’s more research needed also to understand the extent to which these efforts starting somewhere might ultimately be flowing to rural or not. And then, Devon, I’ll be interested to hear from you in this sort of systems approach. If this is where some of the funding is, what needs to be done? So Nicholas, let’s start with you.

Nicholas Chiumenti

Yeah. So, to start on why are these organizations, why are grant makers so heavily concentrated in urban areas? I think it comes down to a lot of the same forces that dictate why for-profit private sector businesses might be located in urban areas, and that is access to skilled labor and other resources that they need to function as an organization. Grant-making organizations also need accountants. They need finance professionals. Sometimes they need trained professional staff if they’re focusing, let’s say, on health, and it’s a lot easier just to hire and find people to fill those roles in urban areas. And then there’s the conglomeration effect of you’re close to organizations with similar mindsets, similar goals that you want to work with. But I do think that it speaks to the limitations here of the data in terms of we don’t actually know how far a grant dollar gets from an urban area into a rural area.

It might be that a lot of this money is flowing pretty well into rural areas, even though it seems to stop in urban areas first. But unfortunately, because the data that’s collected primarily from the IRS just shows us that first stop, that’s all we know at this point.

Anna Kovner

Devon, what systems need to evolve then to capitalize on linking the places that need money to where the money might be?

Devon Winey

Yeah, I think one of the things that comes to mind is really creating the intermediaries, the platforms that can help to aggregate the demand in rural areas and create a stronger connection to some of the larger, more urban-based philanthropy that one, just in some cases just the size of the needs are small and dispersed by their nature in rural areas. And it’s very hard from a funding standpoint for that to work with larger urban-based philanthropy. So, who or what can help facilitate that movement. So I think there’s that piece.

And then the second really in the same category is just decreasing the friction or increasing the ability to make the connections to help larger urban philanthropy really understand the needs and what the opportunities are and help create those. I know in the Richmond Fed’s region, Invest Appalachia I think is a really interesting example of an intermediary that I think is trying to do a lot of that work. I’m sure there are others in other parts of the country as well, but I think that’s one to check out as a way to do some of that bridging.

Anna Kovner

Interested, Nicholas, going back to this data question, I’m a researcher by part, a data lover. It’s interesting overall the presentations here, this importance of definitions looking at apples to apples things, it struck me that sometimes this could present a challenge for rural areas, which inherently have a smaller scale of projects. So, when you think of some of the metrics that emerge in philanthropy, just think about efficiency or measures like that, do you think new special metrics are needed to capture this opportunity when smaller dollars or smaller projects are needed?

Nicholas Chiumenti

That’s a good question, and almost certainly yes, because if you’re looking at it from the perspective of a big funder who might want to see a large-scale project be developed using their grant funds because it both looks good and it’s what maybe their board or their funders want to see, that’s not really practical in a lot of communities. Oftentimes it’s very nuts and bolts things that need to happen, like training of staff, building the capacity even at a municipal level for folks to be able to grow and handle larger, even relatively larger, but still relatively small infrastructure projects. Those aren’t exactly headline initiatives that can be touted. So, I definitely, I think focusing more on a human base, sort of the human capital element of these things would be far more important.

Anna Kovner

Let me ask one last question to Devon, thinking about that human capital element of things. It’s interesting to see that the project progress among graduates of the training program seems varied. I’m interested in what contributes to that variation. Can we bring everyone up to the most successful level, or how do we think about evaluating projects? If everything we do succeeds, are we taking enough flyers on projects to serve communities?

Devon Winey

Yeah, I would say the qualitative research is pointing to a couple of things that are causing the variation. One is simply the folks coming into the program are coming in with different levels of experience and competency. And I would say that the collaborative is really trying to get to the sweet spot of where it’s additive for folks, and that folks have some incoming ability so that they’re able to grab the concepts and run with it. So, I do think there’s that piece.

We’re also seeing a difference in the organizational capacity that participants are coming from. So, if a person in the training program is with an organization that already has a track record in development and maybe a stronger balance sheet, it’s a lot easier to move their projects forward, so that would be another one.

We’re also hearing challenges in the projects that folks are bringing. Some have a much clearer revenue stream attached to it. In others they’re trying to embed that in the project, but it may not be naturally there. I will say in that one the community can help. If there is something where, let’s say a hospital could be the anchor tenant in some building that’s coming in, it goes a long way to giving confidence and revenue stream, so you can really see how local partnerships can make a difference. And then there are challenges in community characteristics in areas where there’s less economic activity. There’s maybe more scrutiny to the proformas around projects and how viable the revenues are. And I think this comes back to where some of the philanthropic funding that Nicholas is talking about can be really important to de-risk to guarantee and really play a role in that capital stack.

Anna Kovner

Thank you so much for both of you and to all of today’s speakers for sharing with us some of the research that you’ve done. I’m going to turn the floor back over to Whitney to close up the conversation. There’s been a lot of links posted in the chat for folks. Each one of these is really kind of just an advertisement for what’s a deep set of work on these questions. So, a lot of opportunities to continue the learning through reading more from each of the presenters. Turning it back to you, Whitney.

Whitney Felder

Thank you, Anna, and thank you panelists for what was such a great discussion. Participants, we like to thank you for your time this afternoon and leave you with just a few quick reminders. After today’s session you will be sent a survey. We ask that you fill that survey out to help us inform future sessions. Your feedback is always valuable. And as we previously mentioned, this session will be available on fedcommunities.org in the coming weeks. If you enjoyed this conversation, be sure to register for the third and final seminar in our CD research series, Place-Based Strategies: Strengthening Local Economies Through Labor Market Policies. That conversation will be happening next month, or I’m sorry, will be happening in August, on Wednesday, August 12th.

Finally, be sure to subscribe to the Fed Communities Monthly newsletter to stay connected by clicking the About Us tab on the fedcommunities.org website and then clicking subscribe.

Thank you again for such a great conversation, and we hope that you have a fabulous afternoon. Thank you.