2010 Appalachia Funders Network Gathering

1. White Paper
Appalachia in Transition
Building Sustainable Communities
A Convening of Funders for Learning and Collaboration
Abingdon, Virginia | March 10–11, 2010
Conveners
Appalachian Regional Commission, Washington, D.C.
Blue Moon Fund, Charlottesville, Virginia
Claude Worthington Benedum Foundation, Pittsburgh, Pennsylvania
Ford Foundation, New York, New York
Mary Reynolds Babcock Foundation, Winston-Salem, North Carolina

2. Appalachia in Transition
Building Sustainable Communities
A Convening of Funders for Learning and Collaboration
The Meeting
Over two days in March 2010, representatives from 25 philanthropic and governmental funders
in Appalachia took part in a landmark gathering in Abingdon, Virginia. The group met to share
information about the historic and current forces that are shaping Appalachia, along with some
of the promising initiatives that are paving the way to new economic opportunity. The funder
representatives also began to discuss ways to collaborate, including the possibility of creating a
regional funders’ network that could leverage resources and help increase prosperity throughout
the Region.
Conveners
Appalachian Regional Commission, Washington, D.C.
Blue Moon Fund, Charlottesville, Virginia
Claude Worthington Benedum Foundation, Pittsburgh, Pennsylvania
Ford Foundation, New York, New York
Mary Reynolds Babcock Foundation, Winston-Salem, North Carolina
CONTENTS
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Ron Eller, University of Kentucky
Transition in Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Anthony Flaccavento, Consultant and Organic Farmer, Virginia
David Carrier, Appalachian Regional Commission, Washington, D.C.
Rory McIlmoil, Downstream Strategies, West Virginia
Jim Baldwin, Cumberland Plateau Planning District, Virginia
Emerging Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Ray Daffner, Appalachian Regional Commission, Washington, DC
Justin Maxson, Mountain Association for Community Economic
Development (MACED), Kentucky
Michelle Decker, Rural Action, Ohio
Kent Spellman, West Virginia Community Development Hub
Gwenda Adkins, Elliott County Cooperative Extension, Kentucky
Ted Boettner, West Virginia Center on Budget and Policy
Burt Lauderdale, Kentuckians for the Commonwealth
Funder Conversation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Planning Team/Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

3. Appalachia is “not INTRODUCTION
the other America… Appalachia is “not the other America… it is America.”
At a gathering of philanthropic funders working in Appalachia, this
it is America.” premise struck a chord. It was part of a dinnertime address by
—Ron Eller, Appalachian Appalachian scholar Ron Eller, who gave the keynote remarks at a two-
scholar day meeting of representatives from 25 funders—a mix of staff and
board members of regional and national foundations and community
funds, along with several governmental funding partners. The room
buzzed with conversation. The funders had gathered in Abingdon,
Virginia, to consider possibilities for collaboration, including the poten-
tial for a funder network for Appalachia. If created, it would be the first
such network for the Region.
Appalachia is entering its third major transition of the past century, Eller
told the group. With widespread attention on Appalachia as coal and
other energy sources are in the national spotlight, there is a window of
opportunity to chart a new future for the Region. But first, we must deal
with the false assumptions about Appalachia found in popular culture—
ARC-Designated Distressed Counties, 2010
that Appalachia is less socioeconomically diverse than other parts of the
NEW YORK
country, that it’s more isolated, that it’s “backward” and lacks modern
P E N N S Y LVA N I A thought and culture. Eller, author of Uneven Ground: Appalachia since
OHIO
M
A
RY
1945, argued that Appalachia should not blame its people and the land
LA
WEST VIRGINIA N
D
for its challenges. Rather, the structure of the regional economy is what’s
KENTUCKY
VIRGINIA
HART
largely at fault—the inherent limits of past transitions that embraced
TENNESSEE
NORTH CAROLINA extractive industries and manufacturing characterized by absentee own-
SOUTH C AROLINA ership and low-skilled jobs. Such economic development brought indus-
trial job growth but neglected the development of people, communities,
M ISSISSIPPI GEORGIA Distressed County
ALABAMA
and natural and cultural assets of the Region.
In the current, third transition, Appalachia has the opportunity to do
things differently, Eller contended. This is the era of sustainability, and
Appalachia has untapped human and environmental assets. To prosper,
new structures will have to be created to invest in people and communi-
ties. Organizations need to link together around common objectives. If
they do, and proceed with hope, energy, and a shared vision, Appalachia
may even lead the nation this time.
Appalachia in Transition—Building Sustainable Communities 2

4. “Appalachia is PANEL DISCUSSIONS—March 11, 2010
The next day’s discussion built on the themes of Ron Eller’s remarks.
entering its third The planning team for “Appalachia in Transition” invited practitioners
and regional experts to share insights about current economic, social,
major trasition of environmental, and political trends and how local communities are
responding. They wanted participants to learn about promising initia-
the past century” tives to build a diverse economy, as well as challenges to expanding and
sustaining such efforts.
—Ron Eller, Appalachian
scholar Transition in Context—Panel I
This panel explored the economic, social, environmental, and political trends in
Appalachia. How is national energy policy affecting the Region? What is the
impact on local communities, including local and state politics, as the Region
responds to these trends?
Facilitator: Anthony Flaccavento, organic farmer, consultant, and
founder of Appalachian Sustainable Development, Abingdon, Virginia
Presenters:
David Carrier, senior economist, Appalachian Regional Commission,
Washington, D.C.
Rory McIlmoil, research analyst for energy and climate change,
Downstream Strategies, Morgantown, Virginia
Jim Baldwin, executive director, Cumberland Plateau Planning District
Commission, Lebanon, Virginia
“While Appalachia is Appalachia “is entering the best of times, and the worst of times,” said
Anthony Flaccavento as he introduced the panel. Appalachia has a
still different from the growing local foods movement and growth in the creative economy. Yet
coal is “still king politically,” and there are huge disparities in land
rest of the country, ownership and wealth.
it’s a lot less different Economy
David Carrier further described some of the current economic trends—
than it used to be.” including the below-average rates of personal income (about 20% less
than the nation as a whole), adding that the recession has caused the
—David Carrier, senior econo-
loss of 800,000 jobs in Appalachia, the same number of jobs as had
mist, Appalachian Regional
been gained since 2000. “While Appalachia is still different from the
Commission rest of the country, it’s a lot less different than it used to be.” Carrier
sees potential in several economic sectors: alternative energy, sustainable
forestry, tourism based on cultural and natural assets, and trade devel-
opment to export Appalachian goods.
Appalachia in Transition—Building Sustainable Communities 3

5. Flaccavento added that there are opportunities for niche markets for
local and organic foods. He cited a study that showed a potential $2
billion boost to the local economy if people in Virginia bought food
from local farmers at least one day a week.
“There will be a lot Energy
Rory McIlmoil reviewed research that demonstrates that Appalachia
of opportunity for must face the reality and urgency of the decline in coal production,
which will significantly reduce jobs and tax revenue. Coal production
Appalachia as the in Appalachia will decline by nearly 50% in the next decade because
of higher standards in the Clean Air Act and Clean Air Interstate Rule,
world shifts to market forces favoring coal mined in the western U.S., and the
increased use of other energy sources like natural gas. He noted the
cleaner energy.” opportunity to address structural issues, such as land ownership and
corporate control, through the development of community-owned
—Justin Maxson, president,
energy. He cited examples of local Appalachian communities exploring
Mountain Association for
the development of wind energy, which has been successful in other
Community Economic
regions across the country.
Development
Community Collaboration
Jim Baldwin described successful collaborative efforts coordinated by the
Planning District Commission in southwest Virginia. A major initiative
to create a 400-square-mile rural broadband network has allowed south-
west Virginia hospitals, schools, nonprofits and government offices to
have “the same online connectivity as anyone in America.” Since the
network was created, information technology employers have situated in
the region adding some 1,000 high-tech jobs. Baldwin described other
initiatives where the district’s 19 counties worked together to create and
promote cultural heritage trails, including the ‘Round the Mountain (a
network of artisans) and the Crooked Road (historic music venues).
Other successful collaborations have supported sustainable forestry and
helped tobacco farmers transition into organic farming by developing
farmers’ markets, building regional packing houses, and connecting
farmers with local grocery stores and restaurants.
Follow-up Discussion
For the past century, Appalachia followed the rest of the country in
adopting the economic philosophy of “comparative advantage.” The
Region’s dominant industries, coal and timber, eventually became
overused and undervalued commodities. Now, Appalachia has the
Appalachia in Transition—Building Sustainable Communities 4

6. “We’re now shifting opportunity to create an economy that is more diversified and sus-
tainable. “We’re now shifting to an asset-based economy, to maxi-
to an asset-based mize what we have… the forests, music, farms, the wind, etc.,” said
Anthony Flaccavento.
economy to maximize
Economic transition will require people, projects, and politics. The
what we have... the Region is beginning to see new leadership and demonstration projects,
but the most significant challenge will be political. The powers and
forests, music, farms, structures in place still support traditional manufacturing and industry,
and new economic solutions must compete with the old for scarce pub-
the wind, etc.” lic support and resources. Another challenge is changing perceptions.
—Anthony Flaccavento, organic People in Appalachia have been told they are among the poorest, most
unhealthy, and most apt to fail. Many residents and leaders react out of
farmer, founder of Appalachian
fear and denial of coal’s demise. Networks of farmers, artisans, non-
Sustainable Development
profits and others can be an effective new tool, but they’ll need support
to build confidence and competence. There is a need for a positive and
hopeful story to be told, and a unified vision to be created.
Emerging Opportunities—Panel II
Promising efforts are underway across the Region to capitalize on Appalachia’s
assets to build a regional economy characterized by opportunity, diversity, and
sustainability. Participants learned about examples of local and regional intia-
tives, what factors have allowed these to emerge, and what challenges remain to
expand and sustain these efforts.
Facilitator: Ray Daffner, Appalachian Regional Commission,
Washington, D.C.
Presenters:
Justin Maxson, president, Mountain Association for Community
Economic Development (MACED), Berea, Kentucky
Michelle Decker, executive director, Rural Action, The Plains, Ohio
Kent Spellman, executive director, West Virginia Community
Development Hub, Stonewood, West Virginia
Gwenda Adkins, county extension agent, Elliot County Cooperative
Extension, Sandy Hook, Kentucky
Ted Boettner, executive director, West Virginia Center on Budget &
Policy, Charleston, West Virginia
Burt Lauderdale, executive director, Kentuckians for the
Commonwealth, London, Kentucky
Appalachia in Transition—Building Sustainable Communities 5

7. “People were beaten Ray Daffner introduced the panel, expressing excitement about various
ways nonprofits and communities are building on long-overlooked
down by statistics and assets as promising growth sectors for the Region’s economy. He high-
lighted ARC’s focus on asset-based development, particularly opportuni-
needed something to ties around energy efficiency and renewable energy. He asked the pan-
elists to discuss approaches to economic development, community devel-
be proud of.” opment and civic engagement, sharing what is working and what else
needs to be in place to take the work to scale.
—Gwenda Adkins, extension
agent, Elliot County, Kentucky Economic Development
There will be a lot of opportunity for Appalachia as the world shifts to
cleaner and renewable energy, said Justin Maxson. Other economic sec-
tors—food and forestry—also offer potential for building on the
Region’s natural assets in a way that encourages community wealth and
environmental sustainability. What will it take for there to be a serious
transition in the economy? He said the first challenge will be to get law-
makers and others to agree that Appalachia is indeed in a transition,
and then to shift public investment from the old economy to the new.
Another key will be to build capacity and leadership to develop new
expertise in local communities. Michelle Decker talked of Rural Action’s
work in sustainable agriculture and water restoration, noting national
trends emphasizing “local” and “green.” She says the Wall Street crisis
and recession have people thinking that “small is beautiful,” opening
the door for community-supported agriculture (CSAs), farmers’ markets,
etc. Now the challenge is to scale up some of these enterprises—to link
small farmers and green wood producers with urban markets.
Differences in state policies and nonprofit infrastructure across the
Appalachian Region create uneven progress in moving to scale.
Community Development
Kent Spellman talked of his West Virginia group’s work to create
community leadership teams, focusing “not on programs but on
process.” The capacity building most needed is to convene groups
around community assets (like local foods or tourism), introduce and
connect people, develop leadership, increase civic engagement, and
provide ongoing coaching. In rural Kentucky, Gwenda Adkins helped
her community to determine its assets—natural beauty, artists, peo-
ple—and then build a community plan around those assets. “People
were beaten down by statistics and needed something to be proud
of.” Over several years, the community designed and built a cultural
Appalachia in Transition—Building Sustainable Communities 6

8. This is “one of the center, built a handicapped accessible hiking trail (the first in
Kentucky), and developed and marketed a five-county plan for eco-
most important agritourism. She said the successes were possible after providing leader-
ship training, taking community members on research trips to see what
moments in other communities have accomplished, securing grants, and asking peo-
ple for specific help based on their talents.
Appalachia in the
Policy and Civic Engagement
past century... Ted Boettner described how tax incentives used to attract industries
have been a poor tool for economic development. Industries often leave
change is going to after multi-million dollar tax incentives have been awarded, taking the
jobs with them and leaving little in terms of a trained workforce or
happen, but what community capacity. More effective alternatives include subsidized
employment and transitional job training. He cited successful programs
will it look like?”
in other states for using coal severance tax revenues to support economic
—Burt Lauderdale, executive transition by creating permanent funds for economic revitalization. He
director, Kentuckians for the noted that people and communities need to let their state officials know
Commonwealth that they want and need these policy changes. Burt Lauderdale called
this one of the most important moments in Appalachia in the past cen-
tury and cited the need for broad, progressive commitment to a just
transition. Change is possible, but it’s going to be hard. The extraction-
based economy (coal) is not going to “go out quietly.” There are serious
barriers of politics and power. And people’s fears of Appalachia without
coal are real and must be addressed. The conversation should be built
from the community level, not the state/federal level, and will require
sustained efforts by broad-based alliances and coalitions. A collective
vision is needed to inform a series of choices. He closed with this chal-
lenge: Change is going to happen, but what will it look like?
Follow-up Discussion
There was a lively discussion of whether and how the coal industry can
be included in the conversation about economic transition. Unions
know that coal jobs are waning, and they are open to discussions on
ways to develop non-coal jobs. Everyone agreed that the public sector
needs to be at the table, and that solutions will require a restoration of
the balance between public and private sectors. The public has become
less trusting of government and looks to the market to solve economic
and social problems, but the market does not support equity or environ-
mental sustainability.
Appalachia in Transition—Building Sustainable Communities 7

9. “We must restore the Appalachia’s transition will require a change in hearts and minds in the
Region. A communication strategy is needed to share ideas and create
proper balance more advocates. People are paying attention to green jobs and are more
open to hearing about new ideas. There is an opportunity at this
between ‘public and moment to coalesce around a vision and promote the conversation.
private’ in order to
FUNDER CONVERSATION
both reign in the In an afternoon funder-only session, there was resonance in the room
about the ideas and opportunities discussed earlier and about the future
market’s worst possibilities for funder collaboration. In lively, small group discussions,
representatives from the funders talked about the social, economic and
excesses and to environmental values that they all share. There was talk of building
wealth and a sustainable economy in Appalachia; developing social cap-
achieve the social
ital, hope and community capacity; and finding ways to create and
and ecological goals retain an intact, healthy environment.
we share.” Developing a common agenda based on such values could be a future
goal, but the group discussed how that might be too big a step for now.
—Anthony Flaccavento, organic Rather, according to session facilitator Vicki Creed, “it feels like the
farmer, founder of Appalachian room is in the beginning stages of courtship.” Creed led the day’s final
Sustainable Development discussion among the full group, and cited a recent GrantCraft publica-
tion that outlines the four stages of funder collaboration: Courtship,
Getting Serious, Commitment, and Leaving a Legacy. (This is based on
observations of funder networks that have been formed in other parts of
the country.)
To move through and beyond the “courtship” stage, the group agreed
that a first step is agreeing on common language to describe a vision for
transition, specific goals and projects. (This document begins to create
that common language.) Other starting points would be to invite other
funders who might wish to be involved, to map “who’s doing what and
where,” and to determine simple and effective ways to communicate
and share information—perhaps through online social media, or
through a series of learning conversations via conference calls.
This information-sharing could be about grants, program strategies, co-
funding opportunities, etc. There was also the suggestion of collaborat-
ing on new research efforts, such as “straw research on how Appalachia
might look in 20 years, if various different choices were made now.”
Appalachia in Transition—Building Sustainable Communities 8

10. Creed noted that many such ideas have been described by GrantCraft in
its publication, “Why and How Funders Work Together.” In the piece,
collaboratives are described to typically include: information sharing,
options for leveraging grants, mutually-developed structures and guide-
lines, and attention to systemic solutions. All funder collaboratives are
not alike, though, Creed said. Some are primarily learning networks,
others are strategically aligned, and some use pooled funds for grants
and initiatives.
Based on what they had heard and learned at the Appalachia in
Transition meeting, Creed asked if participants would like to further
explore the idea of working collaboratively. An official vote was not
taken, but there was widespread agreement among the funders to keep
the conversation going, and to explore possibilities. One person said,
“I’m completely comfortable in continuing the discussion. Just today, I
found three potential collaborators.”
To design the next steps, the group asked the funders on the planning
team for the Abingdon meeting to work with three new volunteers, all
listed below. The Steering Committee invites ideas and suggestions from
participants and new partners. To provide input and guidance regarding
next steps please contact:
Becky Ceperley, The Greater Kanawha Valley Foundation, Charleston,
West Virginia, bceperley@tgkvf.org
Shannon Cunningham, West Virginia Grantmakers, Weston, West
Virginia, shannon@wvgrantmakers.org
Ray Daffner, Appalachian Regional Commission, Washington, D.C.,
rdaffner@arc.gov
Wayne Fawbush, Ford Foundation, New York, New York,
w.fawbush@fordfoundation.org
Terry Holley, East Tennessee Foundation, Knoxville, Tennessee,
tholley@etf.org
Mary Hunt-Lieving, Claude Worthington Benedum Foundation,
Pittsburgh, Pennsylvania, mhunt-lieving@benedum.org
Stefan Jirka, Blue Moon Fund, Charlottesville, Virginia,
www.bluemoonfund.org
Sandra Mikush, Mary Reynolds Babcock Foundation, Winston-Salem,
North Carolina, smikush@mrbf.org
Appalachia in Transition—Building Sustainable Communities 9

11. PLANNING TEAM FOR APPALACHIA IN TRANSITION
Victoria Creed, Learning Partners, Knoxville, Tennessee
Ray Daffner, Appalachian Regional Commission, Washington, D.C.
Wayne Fawbush, Ford Foundation, New York, New York
Mary Hunt-Lieving, Claude Worthington Benedum Foundation,
Pittsburgh, Pennsylvania
Stefan Jirka, Blue Moon Fund, Charlottesville, Virginia
Burt Lauderdale, Kentuckians for the Commonwealth, London,
Kentucky
Justin Maxson, Mountain Association for Community Economic
Development (MACED), Berea, Kentucky
Sandra Mikush, Mary Reynolds Babcock Foundation, Winston-Salem,
North Carolina
PARTICIPATING FUNDERS
Appalachian Community Fund, Gaye Evans
Appalachian Regional Commission, Ray Daffner
Blue Moon Fund, Anthony Flaccavento
Cherokee Preservation Foundation, Susan Jenkins
Claude Worthington Benedum Foundation, Mary Hunt-Lieving
Community Foundation of Hazard & Perry County, Gerry Roll
Community Foundation of Western North Carolina, Tim Richards
East Tennessee Foundation, Terry Holley
Federal Home Loan Bank of Pittsburgh, Laura Rye
Ford Foundation, Wayne Fawbush
Georgia Department of Community Affairs, James Thompson
Heifer International, Tom Dierholf
Jessie Smith Noyes Foundation, Millie Buchanan
Kentucky Philanthropy Initiative, Inc., Mike Hammons
Mary Reynolds Babcock Foundation, Dee Davis, Lavastian Glenn,
Sandra Mikush
New World Foundation, Heeten Kalan
One Foundation, Tom Attar
Parkersburg Area Community Foundation, Judy Sjostedt
The Greater Kanawha Valley Foundation, Becky Ceperley and Sheri Ryder
The Sugar Bush Foundation, Carol Kuhre and Hylie Voss
USDA Rural Development, Vernon Brown (Kentucky) , Ellen Davis and
Travis Jackson (Virginia), Robert Lewis (West Virginia)
Virginia Department of Housing and Community Development,
Denise Ambrose
West Virginia Development Office, James Bush
West Virginia Grantmakers, Shannon Cunningham
Appalachia in Transition—Building Sustainable Communities 10

12. RESOURCES
Appalachian Transition Initiative website (collaboration of Mountain Association for
Community Economic Development and Kentuckians for the Commonwealth)—data, resources
and essays by a range of leaders on options and opportunities for transition
http://appalachiantransition.net/
“Funder Collaboratives: Why and How Funders Work Together,” a publication of GrantCraft
http://www.grantcraft.org
“Socioeconomic Overview of Appalachia, 2010,” Appalachian Regional Commission,
http://www.arc.gov/images/appregion/SocioeconomicOverviewofAppalachiaMarch2010.pdf;
other reports available at http://www.arc.gov/research
Uneven Ground: Appalachia since 1945, Ronald D. Eller, PhD., The University Press of
Kentucky, 2008
“Imagining the Future of Philanthropy: Looking Back from 2025,” an article by Katherine
Fulton, http://www.futureofphilanthropy.org/files/philTom_1ImaginingFuture.pdf, and a related
speech, http://www.ted.com/talks/katherine_fulton_you_are_the_future_of_philanthropy.html
Written by Sandy Lang
On the Cover:
View of Cold Mountain in North Carolina
Photo courtesy of National Scenic Byways Online (www.byways.org)
Appalachia in Transition—Building Sustainable Communities 11