A Moral Failure: Foundations and Rural America
Beyond these public sector challenges, a concomitant rural disadvantage in philanthropic funding also remains significant. A 2004 report by the National Committee for Responsive Philanthropy, “Beyond City Limits: The Philanthropic Needs of Rural America,” found that out of 65,000 grant-making foundations, only 184 made grants characterized as “rural development.”
Rural America remains challenged by this long-standing, differential disadvantage in philanthropic investment in its people, organizations, and institutions. And this is now more critical than ever, as federal, state and local government resources continue to decline. Because of the generous tax subsidies granted foundations and their donors, their presidents and trustees enter into a covenant with the American people, in which our government and these institutions jointly assume an obligation to steward this awesome public trust so as to optimize the public good achieved, in exchange for the lost public sector revenues and resources, as a result of tax deductions and exemptions. An awesome challenge, indeed…….As with all subsidies, deductions, and exemptions, federal budgetary pressures are again calling these dynamics into question, as both more research and more transparency are sought.
While redlining has been decried by national foundations for years on the part of government, a current de facto foundation redlining of rural America simply must be addressed. Federal funding for community capacity continues to decrease, and rural safety net resources are in dire need. Yet, American philanthropy continues to distribute less than 3% of its annual payout to the people and places of rural America, which comprise 20% of our population and 80% of our natural resource base. In fact, foundations have withdrawn further from rural commitments in the past five years, as need has increased exponentially. These foundations, and the generous tax subsidies provided to donors, create a public partnership in pursuit of the public good. This geographic inequity must be named. It is an institutional and moral failure; and one so long-standing that serious inquiry regarding whether this is an abuse of a solemn public trust should be considered.
[Editor’s Note: In the spirit of full disclosure, Charles Fluharty is the father of Matthew Fluharty, Art of the Rural Editor.]