By Gabriel Kelvin

The Reimagining the Economy Project convened a group of economic development practitioners, primarily from distressed regions across the country, to understand their capacity constraints, unpack the challenges regions encounter in accessing federal and state funds, and the local innovations and mechanisms to help address these. The conversations revolved around the  challenges that small, distressed, and rural communities encounter while accessing federal and state funds, the constraints on the demand and supply sides, and  the type of coordination required among local actors.

Participants at the local capacity workshop

Grant Design Matters

Grant provisions impose significant restrictions on local communities. Specifically challenging are limitations on using funds for administrative concerns, which limit the effectiveness of program design by increasing institutional workload without increasing institutional capacity. This concern is exacerbated for regions that are struggling with limited capacity to begin with. Additionally, fund matching requirements can outright exclude the highest-need communities from grant resources. Matching requirements also cannibalize the ability of other funders - often philanthropy - to direct funds to other priorities. As one participant stated, “philanthropy dollars should be high risk dollars, especially in rural communities. We see in rural areas there is a strong level of ambition, imagination and ROI.” But matching requirements mean philanthropy must also complement government funding. 

Creating Partnerships Creates Results

Coordinating and strategizing as a region rather than an institution has major benefits in both the capacity and informational dimensions of development. Not only does this allow organizations to view each other as allies rather than competitors in attracting funding and businesses, it also allows for greater sharing of ideas, known opportunities, and resources in acquiring funding. This is especially the case in identifying uses for private capital.

  • Collaboration benefits from good structure: successful collaboration requires strong foundations. Having a neutral space, an effective meeting frequency, clearly outlined roles and an open agenda to foster discussion is the bedrock for effective partnerships. This is especially the case in building networks to build a shared vision.
  • Informational ecosystems shift burdens: strong collaborations can help eliminate duplication of effort, crowdsource subject matter experts, and share workload burden. Creating active collaborations has furthered economies to scale in knowledge sharing. Often, a “tyranny of metrics” places burdens on communities to acquire vast amounts of information to be able to access funding. A strong informational ecosystem allows not only for greater collaboration in amassing this information, but can create a public good knowledge hub to empower local actors to approach funders.

Economic Development Organizations are a region’s voice

EDOs have a role in both communicating needs, stories, and visions to outside funders, while also translating these down to hyper-local organizations in a way that is understandable and constructive. Using these cross-sectoral connections, EDOs can lead the way in penetrating federal bureaucracy and lead local organizations to funding opportunities. However, EDOs must be bold in assuming the role of championing disenfranchised communities and helping bridge the gap between them and funding opportunities. Specifically, it is important to involve communities early on in the strategizing process to ensure a sustainable and representative vision of economic development. Summarized by one participant, “master planning processes work when they aren’t made around the board table, but when they are brought out to the community.”

Alex WeldGeneration West Virginia
Becky McCraySave Your Town
BJ AllenRegion Five Development Commission
Bryan PhilipsWest Virginia Community Development Hub
Cassidy RileyCoalfield Development
Dan SmithThe Vermont Community Foundation
Dani RodrikHarvard Kennedy School
Dell GinesInternational Economic Development Council
Dennis FraiseLee County Economic Development Group
Donna GambrellAppalachian Community Capital
Dustin TingleyHarvard University Department of Government
Emily TedardsHarvard Business School
Gordon HansonHarvard Kennedy School
Gil GonzalesSubcity
Jen GiovannittiBenedum Foundation
Jessica WaldenMacon-Bibb Chamber of Commerce
Josh MejiaMejia & Company
Josh RogersNewTown Macon
Lara GaleHarvard Kennedy School
Linda BilmesHarvard Kennedy School
Lori FrederickElevate Rapid City
Marlee StarkDepartment of Economic Vitality, City of Fayetteville, Arkansas
Nathan OhleInternational Economic Development Council
Rafael CarbonellHarvard Kennedy School
Rohan SandhuHarvard Kennedy School
Rozalyn MockThe Ford Family Foundation
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