Bank vs. Foundation-Led Development: What Works?
Researchers compared two community development efforts in rural Mississippi; they found that a local bank's initiative, through its presence, local ties, and organization, was better able to create broad citizen participation.
Sharing Life: mural by William Baggett
Winfred L. Wiser Hospital for Women and Infants
Image: University of Mississippi Medical Center, Jackson
Decades of community development effort have not managed to bring some rural areas — like the Mississippi Delta ““ out of poverty. With limited resources for future development, there’s a pressing interest in discovering which methods are most like to succeed.
Mark H. Harvey and Lionel J. Beaulieu, scholars at Mississippi State University, studied this issue by comparing two different approaches to community development. The two initiatives were funded by the same major national philanthropy in similarly distressed counties of the rural South. Through this “quasi-natural experiment,ï¿½? Harvey and Beaulieu were able to identify the effects of the grant recipients’ organizational characteristics and their approaches to development.
One was a regional philanthropic foundation, based far outside its targeted counties in a large city in the southeastern U.S. The other was a non-profit subsidiary of a regional development bank based in the county seat of its target county. The foundation emphasized an active “grassrootsï¿½? democratic form of community participation while the bank subsidiary was highly selective in “handpickingï¿½? strategic residents of the community based on their “integrityï¿½? and “capacity.ï¿½?
The scholars found that over the short-term (3 years), the foundation’s effort to build a viable infrastructure for citizen-led community development largely failed. In contrast, the bank subsidiary succeeded ““ over time — in creating a base for a diverse and sustainable participatory development initiative. Harvey and Beaulieu contend that the disparities in these outcomes were related to formal and geographic differences in the two organizations.
In a region jaded by decades of development initiatives that have failed to deliver results, the authors suggest that the bank subsidiary’s local presence, access to the human and financial resources of its parent bank, and network connections to local businesses and government allowed it to leverage the participation of community members into impacts that were immediate and visible.
The philanthropic foundation’s lack of local presence, its limited access to resources (human and financial) and limited network connections (with ties mainly to organizations dependent upon government and philanthropic funds to sustain their own operations) resulted in years of planning meetings that yielded almost no visible impacts. Further, the bank subsidiary’s capacity to deliver results helped sustain and broaden participation in its initiative, while the foundation’s lack of capacity functioned to reinforce the widely held view that its efforts were a “waste of time.ï¿½?
Harvey and Beaulieu also relate the difference in outcomes to very different approaches to community leadership. The foundation emphasized democratic participation and was focused almost exclusively on developing a corps of “nontraditionalï¿½? grassroots leaders actively to oversee its initiative. The researchers note that while this approach is attractive in theory, in practice, it functioned to alienate traditional leaders, further undercutting the capacity for action. Beaulieu and Harvey cite the bank subsidiary’s approach as more “strategicï¿½? and “incrementalï¿½?: the broad diversity of voices in the community was incorporated through a year-long process of open planning meetings, after which administration of the strategic plan was limited to a smaller group of individuals selected by the subsidiary’s staff.
the Mississippi Delta
Photo: Et Cetera
Harvey and Beaulieu conclude that their findings support community development strategies in which funders are embedded within the community and involved in strategically selecting local participants. They suggest that in high poverty enclaves of the rural South, the active role of “negotiator,ï¿½? rather than “facilitator,ï¿½? may be more appropriate for funders interested in promoting deep community change. This strategy recognizes the significant obstacles presented by the diverse and opposing interests that exist within high poverty communities, a condition which often undermines approaches that only emphasize “community assets.ï¿½? According to Harvey and Beaulieu, “embedded fundersï¿½? seem to offer some advantages when it comes to negotiating the competing interests that often undermine rural community and economic development. These advantages are due to a more intimate knowledge of community factions and a greater capacity to leverage other interests within the community.
Mark Harvey and Lionel “Boï¿½? Beaulieu, of Mississippi State’s Southern Rural Development Center, presented their findings at the annual meeting of the Rural Sociological Society in Santa Clara, California, in August. Arguing that the attainment of diverse and representative participation in community development projects is a process marked by inherent contradictions and tradeoffs, their findings challenge those of us who advocate democratic participation in rural development to make such strategies more effective.
Patrick H. Mooney chairs the Department of Sociology at the University of Kentucky.