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Future Recommendations

Going forward, it is recommended that grantmakers and economic development practitioners invest in training residents how to develop their own strategies and diverse types of investments. By training more local people to understand these concepts, key partners can support one another to transform downtowns and diversify the economy. Many opportunities and challenges were identified during the development of this playbook. To continue building momentum and improve the investment ecosystem of Appalachia, here are a few general recommendations:

Grantmakers

• Fund Community Technical Assistance Programs: Dedicate sustainable regional funding for ongoing technical assistance to help communities with planning and pre-development work. 

• Expand Practitioner Training: Continue offering the Framer Training and possibly expand these training sessions to be offered virtually, so individuals can pick the training they need most at any particular moment along their journey.

• Develop Investor Training: Develop and offer Board and Investment Committee training to foundations and investors. Many financial institutions, like CDFIs and community foundations, need training to explain what they can and cannot invest in. For example, many believe they can only invest in nonprofits, but there are legal ways they can invest in for-profits as well. 

  Invest in “people and systems change:” Provide technical assistance for community involvement, operating expenses, entrepreneur training, and support services that encourage businesses in developing sustainability plans. For example, the Foundation for Appalachian Kentucky (FAKY) has found great success using the 6 Conditions of Social Change.

• Fund Sustainability Plans: Philanthropic and public funding organizations should be investing more into building the capacity of organizations and in pre-development work. This should include consultation to help them develop plans to make their general operations sustainable after development is complete. For instance, an allowable cost for grant opportunities could be dedicated to developing a sustainability plan to continue the program after grant funding ends.

Practitioners

• Focus on Growing Local Businesses: Focus technical assistance for entrepreneurs on transitioning small businesses that have the potential to grow and become “Innovation Driven Enterprises.” MIT defines these as businesses focused on “products or repeatable services beyond the local market.” Rather than primarily focusing on recruiting large companies from outside the region to create jobs that benefit only a few towns, economic development practitioners should encourage local small businesses from all across the region to reach beyond their immediate markets. This will increase small business revenue and help more Appalachian communities experience moderate job growth.

• Encourage Revenue-Based Lending: Support growing startup companies by offering flexible, revenue-based lending. This form of loan allows startups to gain the initial investment they need to grow. Then, owners can pay back loans at a rate consistent with their current revenue. This ensures a business can keep its doors open. Additionally, when revenue is high, lenders reap the benefits. While repayment may take longer than traditional loans, this type of patient capital lowers risk by reducing the number of defaults and bankruptcies.

• Develop Sustainability: Develop a consulting group or non-profit program that helps businesses, nonprofits, and municipal government organizations develop sustainability plans. This will help them continue their operations without relying on grant funding. 

• Identify Common Downtown Barriers: Investigate common barriers to downtown revitalization and provide examples of solutions such as: out of town or neglectful property owners, inflated prices for downtown properties, negative “it can’t happen here” attitudes, etc.

• Investigate CDFI Issues & Incentives: Identify and investigate issues with the current CDFI system, like accountability of CDFIs to their funding sources and the possibility of offering incentives for improved outcomes.

• Impact Measurement: Research and provide examples of standard best practices for measuring the impact of downtown revitalization projects. This will help downtowns measure their own success and compare data with others.

• Connect Investors with Investment Opportunities: Develop a regional mechanism to connect investors with opportunities, and ways to attract investors interested in slow/long-term, moderate financial returns. This could include an example pitch deck highlighting information these types of investors want to see.

• Boost Local Investment: Recruit more local investment by:

  • Educating people on why it’s important

  • Connecting them with others who’ve done it

  • Identifying investable project opportunities

  • Helping them connect with financial institutions

• Develop a Referral List: Develop a referral list of trained and skilled consultants in Central Appalachia who can hit the ground running, increase efficiencies, and ultimately decrease cost for downtown development projects. For example, Downstream Strategies and Woodlands Development Group are organizations that are experienced in this type of work.

• Share Success Stories: Share more success stories for both catalytic and transformative investment.

• Give Awards & Recognition: Give awards/recognition to individuals and organizations who are changing the narrative about investment in their communities. Build up the local community investment ecosystem. This could include: increasing the sources for local nonprofit grantmaking in each community, lowering barriers for prospective local investors, and developing local capacity to develop a broad range of transformative projects, especially regarding the size and complexity of their capital stacks.