Nonprofits in Rural America: Overcoming the Resource Gap

The Bridgespan Group has released a paper discussing the nonprofit sector in rural America and its challenges around funding. As the article relates:

This paper lays out some of the facts surrounding rural nonprofit funding in the sample states, including original research comparing rural and urban nonprofits. We also take a preliminary stab—in the interest of seeding a dialogue—at some lessons for both nonprofits and foundations interested in addressing rural issues. While it would be presumptuous to consider our lessons as recipes for success, we hope organizations will consider these lessons as they wrestle with the contemporary questions of how to fund the important work of addressing rural poverty during these tough economic times.

The Rural Funding Gap
While the current economic climate has placed tremendous financial strains on the nonprofit community at large, recent studies have found that nonprofits in rural America face amplified funding challenges. "Compared to their urban counterparts, rural nonprofits are significantly disadvantaged,” says Rachel Swierzewski, a research consultant for the National Committee for Responsive Philanthropy and the author of a 2007 report on rural philanthropy. “With scarce local funding sources and often insufficient local support systems, rural nonprofits find it incredibly difficult to build strong organizations."[2]

The data on rural nonprofit funding is stark. Consider the rural funding gap in three important realms.

• Federal government funding: In each year between 1994 and 2001, rural areas received between $401 and $648 less per capita than urban areas for community resources, human resources, and national functions.[3]
• Private foundations: A 2006 "analysis of grant making of the top 1,000 U.S. foundations shows that…grants to rural America accounted for only 6.8 percent of overall annual giving by foundations,"[4] even though rural America accounts for 18 percent of the nation’s population and 21 percent of those who live in poverty.[5,6]
• Corporate giving: A 2000 study of giving by 124 Fortune 500 corporations found that rural organizations received only 1.4 percent of the 10,905 grants made.[7]

The scarcity of funding for rural nonprofits means that these organizations—with fewer resources to begin with—must work harder to obtain the money they need to serve rural communities. The result is that rural nonprofits are less able to help disadvantaged residents in rural communities to overcome their challenges. Read more here.