Investing in Rural America:

Corporate America has an opportunity to deepen its focus on rural America, especially through its philanthropic efforts. By doing so, companies can advance their social and environmental goals, generate tangible business returns, and help bridge the urban-rural divide in a polarized landscape, as detailed in a new report by The Conference Board.

As the report points out, only 5% of large philanthropic grants are directed to rural areas, even though rural America is home to 20% of the US population. But companies have a strong rationale for directing greater corporate citizenship resources to these areas:

• Even though relatively few US firms are headquartered in rural areas, their welfare is still important to companies—it is where many of their customers and suppliers live.
• Addressing the needs of rural America can help to alleviate both the economic alienation and political polarization that affect our country—and demonstrate that companies care about all Americans.
• Serving rural areas can be a natural extension—and acceleration—of companies’ existing citizenship programs addressing diversity, economic development, education, and a host of environmental issues.

The report provides insights into how and why corporate philanthropy can make a lasting impact in rural America, with benefits for both companies and society. Findings come from 1) a survey of 50 US and multinational corporations, half of which have an annual revenue of more than 10 billion dollars; and 2) a series of Chatham House Rule convenings with corporate citizenship and philanthropy leaders.

Additional findings and insights include:

Challenges Facing Rural Communities

Despite the diversity of rural communities, many encounter common challenges that include:

• A higher incidence of poverty than in urban areas (particularly for people of color).
• Health disparities compared to the overall population, including higher mortality rates.
• Lower educational attainment and labor force participation.
• Deteriorating or weak infrastructure, including transportation, housing, basic services, and broadband internet.
• Environmental challenges, including greater occupational exposure to pollutants, lower-quality drinking water, and increased vulnerability to natural disasters.

The Current State of Corporate Citizenship in Rural Communities

Companies face several barriers that can inhibit larger corporate citizenship commitments in rural communities, including:

• A lack of direct corporate presence in those areas (cited by 37% of respondents).
• A limited understanding of rural needs (37%).
• A less robust network of potential nonprofit grantees (35%).

 “Companies can take multiple steps to overcome the barriers they face in serving rural America. They can make affirmative efforts to recruit executives and managers from rural areas, which can help increase understanding of rural needs. And as they often do with urban communities, they can begin by listening to local leaders,” said Andrew Jones, author of the report and Senior Researcher at The Conference Board.

Employees and local communities are the leading drivers of corporate citizenship in rural America.

• Employees are the main stakeholder group (cited by 66% of respondents).
• Local communities (62%).
• Also playing a significant role are CEOs and C-Suite executives (46%) and business-unit leaders (40%).

How Companies Can Better Support Rural America

Companies can align their citizenship programs with existing government initiatives.

• Currently, only 30% of companies take governmental efforts into account in their rural corporate citizenship programs.
• While there are typically fewer large nonprofits in rural areas, companies can support anchor institutions such as libraries, hospitals, community colleges, extension offices and parks and recreation districts.
• Consider focusing attention on those fundamental areas that will improve quality of life and provide rural areas with greater opportunities for economic growth.
  • While over 75% of surveyed companies are focusing their rural corporate citizenship efforts on education, only about one-third are attending to health care. Rural hospitals and health systems are key pillars in local economies. 

“Rural-focused citizenship and philanthropy can be part of broader corporate efforts to support diversity and serve disadvantaged populations. Indeed, people of color represent about a quarter of the rural population, and many areas are diversifying quickly. About 20 percent of those who identify as LGBTQ+ live in rural areas, and people with disabilities and the elderly are overrepresented in rural regions. Focusing on areas such as education, entrepreneurship, and health care are ways to advance a company’s diversity goals while serving local needs,” said Paul Washington, Executive Director of The Conference Board Governance & Sustainability Center.