The Appalachian region of the country is a geographically large and diverse area. At a federal level, the Appalachian region is defined in the authorizing legislation of the regional economic development agency, the Appalachian Regional Commission (ARC).1 The region includes all of West Virginia and parts of 12 other states: Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, and Virginia. The region's economy has historically been dependent on natural resource-based industries such as mining, forestry, and agriculture, as well as chemical and heavy industry, but it has become more diversified in the last few decades.2

This region has the highest concentration of poverty in the country, with a per capita income between 38 and 75 percent of the national average, and it also has the lowest high school graduation rates and the highest disability rates in the country.3 In 1965, one in three Appalachians lived in poverty. Over the 2007–11 period, the region's poverty rate was 16.1 percent.4

While significant economic and social challenges exist in the region, ARC research points out that the local economies across the region are not homogeneous, and some communities in the Appalachia footprint have successfully diversified their economies.5

The economic and social challenges that affect the geographically large and diverse Appalachia region are too complex for an individual organization to address comprehensively. Many communities need large-scale growth or transition to other industries in order to ensure residents have local economic opportunity and mobility. As organizations working in this region have learned, that transition requires collaboration among entities and across sectors that capitalizes on the region's assets, builds community capacity, and leverages resources that advance promising economic development initiatives in sustainable and lasting ways.

Recognizing that one grant maker or governmental program will not have as much impact as the collective, the Appalachia Funders Network (the network) has come together to address these issues in Central Appalachia, defined by the network as the Appalachian counties of Ohio, Kentucky, Tennessee, Virginia, West Virginia, and North Carolina (see the map).

About the network
The network was conceived at a March 2010 gathering of representatives from 25 philanthropic and governmental funders working in Appalachia. Participants discussed the importance of collaboration, both in strategic thinking and pooling and targeting resources through a regional funders' network, in what eventually was formalized as the Appalachia Funders Network.

During 2011, the organizational members formalized the role and direction of the network. They incorporated as a cornerstone the concept of collective impact, as described by the Stanford Social Innovation Review: "the commitment of a group of important actors from different sectors to a common agenda for solving a specific social problem."6 Using this as a foundational element, the network developed a framework for advancing the economic transition of the Central Appalachian region based around a common analysis and set of shared strategies. In just three years, the network has grown to include over 200 national and regional funding organizations from the public, private, and governmental sectors that work in central Appalachia.

The network also hired Rural Support Partners, centrally based in Asheville, North Carolina, to operate as the support organization. Now a critical component of providing the network with structure, Rural Support Partners provides daily management of the network, facilitation and coordination of communications and gatherings, and evaluation of the network's programmatic impacts.

One notable program that has emerged from the network's convening power is the Appalachian Transition Fellowship (known as AppFellows). AppFellows is the region's first fellowship for regional leaders and was designed to connect and foster partnerships among nonprofits, businesses, government agencies, and educational and philanthropic organizations working in the region. Four foundations came together to cofund the research, planning, and launch of the program in 2012. The result is a yearlong, paid program that builds on existing regional efforts to bring together cohorts of 15 emerging community leaders and 45 organizations to advance Appalachia's economic transition.

AppFellows places these leaders within host communities to work on projects that foster cross-sector collaborations, and, in return, it provides training and mentoring for these emerging leaders. The program's design is rooted in the network's Appalachian transition framework and uses on-the-ground work experience and exposure to Central Appalachia's unique challenges and needs to develop leaders who will continue to work in the region following their fellowship.

Outcomes and lessons learned
In the three years since its inception, the network has tracked its impact across four goals: increased connections between Appalachian focused grant makers; development of a shared vision, analysis, and framework for targeting investments; increased cross-sector collaboration; and establishment of a formal structure. Highlights of the network's outcomes under the aforementioned goals include hosting four in-person gatherings at revolving locations around the region and the development of a common framework and related working groups under key areas of the framework. These working groups have engaged with local economic development practitioners to determine how the network can provide support to regional entrepreneurial activities in health, local food production, and clean energy. The network also counts as an outcome successful spin-off programs such as the Appalachian Transition Fellowship.

AFN Event Addresses Economic Development Initiatives in Appalachia

Since 2010, the Federal Reserve Banks of Atlanta, Cleveland, and Richmond have worked with AFN to introduce promising community and economic development practices, share research, and explore collaborative partnerships and programs to improve the economic prospects of rural communities. In 2013, the three Banks supported AFN's annual conference by convening experts in Asheville, North Carolina, to share their perspectives on access to capital and credit. This April, the Banks sponsored a half-day program, "The Power of Partnerships, in Athens, Ohio, to examine how rural communities can retain wealth. The event also focused on the social and economic impacts of natural resource extraction.

The program attracted over 150 participants, including grant makers, federal agency representatives, bankers, entrepreneurs, and local development practitioners. A proceedings paper summarizing this year's AFN event will be available in the coming months.

While the network's efforts target a specific region of the country with distinct conditions and needs, its efforts exemplify lessons for the development and execution of any regional community development collaboration, specifically those made up of diverse partners representing the public, private, and philanthropic sectors. The Federal Reserve System's community and economic development division is focused on the unique challenges in rural America, including those in Appalachia. The network demonstrates the following key applications for our Federal Reserve System stakeholders.

The development of strong trust and relationships is necessary to build partnerships, foster collaboration, and ensure a network's success. Trust and relationships are built over time as network members become more connected, identify similar priorities, engage in open dialogue, and coordinate efforts to meet organizations' and communities' interests.

Regional funding collaboratives should include diversity in type and geography of funding entities. Though not profound at its surface, the complexity of this lesson comes in its implementation. As in the case of the network, a core group of funding entities must establish and illustrate the diversity principles the network should epitomize, and then recruit members from the philanthropic, governmental, and private sectors based around those ideas. Also, this approach requires some creativity in determining the appropriate traditional and nontraditional funding entities that should be invited to participate. A related lesson is to incorporate leading practitioners in the network's learning and analysis. This allows for opportunities to break down silos, engage in open and honest dialogue, build authentic partnerships, and develop innovative approaches and strategic investments to advance shared strategies.

Networks require some structure and a sustainable source of funding to maintain momentum. The hire of Rural Support Partners as a non-funding entity was a critical component of operationalizing the network once the concept was solidified. Furthermore, it was important to the network that the support organization had no vested interest in pushing a particular strategic direction. Also, the network has maintained a low-cost membership due structure as the primary funding source for its activities. The network reports cite the growing number of members and its resources for network activities as proof positive that the funding source has been successful to date.7

A common framework, shared agenda, and road map among the funding entities ensures that individual organizations have a clear understanding of the common platform and are able to determine how their own work may complement or dovetail with the regional plan. Agreement on a common framework by network members can support a more coordinated, scalable, and impactful body of development work. The framework and road map for the network's efforts will continue to be evaluated annually during the network's in-person gathering to determine how it should evolve based on any lessons learned from the year's work.

By Emily Mitchell, Atlanta Fed regional community development manager, Nashville Branch


1 ARC represents a partnership of federal, state, and local government. Established by an act of Congress in 1965, ARC is composed of the governors of the 13 Appalachian states and a federal cochair, who is appointed by the president.

2 The Appalachian Region, Appalachian Regional Commission.

3 Rural Support Partners, 2014.

4 The Appalachian Region, Appalachian Regional Commission.

5 Ibid.

6 "Collective Impact," Stanford Social Innovation Review, Winter 2011.

7 "Harnessing the Power of the Network to Accelerate Appalachia's Transition," Appalachia Funders Network, March 2013.

Federal Reserve Resources

Aligning Regional Workforce Efforts: An Effective Industry-Informed Strategy podcast, Atlanta Fed's Economic Development podcast series, Federal Reserve Bank of Atlanta, July 2013.

Entrepreneurship in Rural America: A Road to Prosperity, Connecting Communities session, Federal Reserve System, September 10, 2013.

Rural Poverty Research Symposium, agenda and presentations, Federal Reserve Bank of Atlanta, December 2–3, 2013.

Self-Employment as Economic Development Strategy: What Does It Mean for Metro and Nonmetro Counties in the Southeastern United States?, Federal Reserve Bank of Atlanta, Partners Update, May/June 2011.

Sweet Charity: Foundations as a Source for Community and Economic Development podcast, Atlanta Fed's Economic Development podcast series, March 2010.