Increasing Rural Capacity: Ways Intermediaries Can Contribute

Intermediary organizations provide a wide range of services that can help rural and small-town communities (no matter how we define rural or small town) to improve regional outcomes.  Intermediaries are place-based, which means that they focus on a specific community or geography.  They can operate at a local, regional, state, or multistate level and act as conveners of other organizations. In addition, they can serve as a link between local organizations and state or national resources.

Intermediaries may provide direct services to individuals as part of their portfolio, but what differentiates them from direct service providers is their connecting role. An intermediary might focus on a range of issues including arts and culture, environment, health, economic development, etc. Within economic development, intermediaries could focus on traditionally transactional efforts like business attraction, site development, and training programs, or they could work to change the economic system to reduce barriers and encourage economic inclusion. A system change approach simultaneously addresses multiple parts of the economic ecosystem, such as facilitating access to credit, encouraging workforce readiness, and creating housing opportunities.

What Are Some Types of Intermediary Organizations?

Anchor Institutions

Anchor institutions, like universities and hospitals, connect to a place through their missions and operations in a way that “anchors” them in the community. Although many organizations invest capital and engage in a community, anchor institutions have a clearly articulated mission and play an intermediary role. A distinguishing characteristic of this intermediary type is the role of their business operations and related institutional investment in the community. Anchor institutions can impact the community by primarily acting alone or taking a more collective approach. Developing an anchor strategy involves defining a key challenge within the community and identifying internal and external stakeholders that must work together to address the challenge. This work goes beyond programs; the anchor institution also ensures that its culture, business procedures, and community interactions support the broader mission to benefit the community.

In the early 2000s, when anchor institutions were first identified and defined, they were primarily focused on real estate development in the communities immediately neighboring where they operate. Now, anchor institutions are engaged in many community development initiatives such as using local and minority suppliers, hiring inclusively, developing local workforce pipelines, and engaging in conversations around fair or living wages. Anchor institutions may participate in networks to learn from each other’s strategies.

One example is Intermountain Healthcare, a not-for-profit system with 25 hospitals and 225 clinics in Utah, Nevada, and Idaho that serve many rural communities. The system is part of the Healthcare Anchor Network and has signed the Impact Purchasing Commitment and Place-based Investment Commitment initiatives.

The Impact Purchasing Commitment includes increasing spending with minority and women-owned businesses. It also includes increasing spending at local and employee-owned, cooperatively-owned, and/or nonprofit-owned businesses. The Place-based Investment Commitment is an effort to redirect part of the hospital system’s assets to impact community barriers to economic inclusion. Intermountain Healthcare’s supply chain has more than 300,000 purchase orders annually.  Increasing the percentage the health system spends with local and minority-owned business allows the health system to help businesses that were impacted disproportionately by the COVID-19 pandemic. To help remove barriers for workforce housing, Intermountain Healthcare teamed up with Rocky Mountain Homes Fund to provide access to affordable and stable housing in Weber County for essential service workers.

Rural Development Hubs

Rural Development Hubs focus on inclusive economic development in rural areas. Another distinguishing characteristic of this intermediary type is the intentional focus on new ways of approaching economic development. The term rural development hub was coined by the Aspen Institute in this 2020 paper: Rural Development Hubs: Strengthening America’s Rural Innovation Infrastructure. They defined rural development hubs as a “place-rooted organization working hand-in-glove with people and organizations within and across a region to build inclusive wealth, increase local capacity and create opportunities for better livelihoods…” Hubs work to identify opportunities and barriers related to eight forms of capital: individual, intellectual, natural, built, social, political, cultural, and financial. The work of a rural development hub is to weave those forms of capital together to help develop a system that improves prosperity for all.

The Aspen Institute has identified defining characteristics of Rural Development Hubs.

• Hubs are regional. They convene the region to think, work, develop trust, take coordinated action, and share accountability at the regional level.
• Hubs focus on system improvements. They take a long view that addresses the root of problems and bridges isolated issues to analyze the system, address gaps in the system, and take corrective action where the system perpetuates undesirable outcomes.
• Hubs build community capacity. They create structures, products, and tools that help partners take action individually and collectively.
• Hubs create new opportunities. They make connections with state and regional players, create space for risk-taking, and encourage innovative ways of problem-solving.

For example, the West Virginia Community Development Hub (The WV Hub) is a statewide organization that catalyzes community growth and effects change in the economic development system through technical assistance, tools, coaching, and connecting communities to state and national resources. The WV Hub deploys policy and communications strategies to create an enabling environment for communities to build wealth.

The WV Hub has two main approaches to building capacity. The first is coaching 15-20 community leadership teams per year as they build sustainable community development projects. The second is improving the economic development ecosystem by convening and connecting West Virginia-based stakeholders in government, business, and service sectors to collaborate on innovative approaches to small town and rural development. The WV Hub highlighted the work of New Martinsville to create a three-day music and arts festival called the Back Home Festival. Over the last six years, the attendance has grown by 460 percent from 5,000 to 23,000 attendees. For every dollar spent on this tourism project, the Back Home Festival generates $9 in consumer spending.

Collective Impact Backbone Organizations

Collective impact backbone organizations are intermediaries that convene partners from multiple types of organizations to address a community issue. An anchor institution, rural development hub, or other form of organization could serve as a collective impact backbone. They could also be one participant in the partnership convened by others. Backbone organizations provide supports to effectively coordinate the contributions of multiple partners, including facilitation, data systems and analysis, communication support, highly structured problem-solving methods, and the administrative functions. They can also help the group develop a shared vision, identify strategies, develop a work plan, maintain accountability, advocate for policy change, and secure resources.

Collective impact backbones work with partners to change systems that are preventing better outcomes for the community, rather than promoting individual organizational programs. They engage in broad issues like regional workforce readiness, food access, or housing. The Stanford Social Innovation Review identified five important conditions for collective impact: (a) common agenda, (b) shared measurement, (c) mutually reinforcing activities, (d) continuous communications, and (e) backbone support.

The United Way of Southwest Virginia (UWSWVA) is an example of a collective impact backbone organization. About 10 years ago, UWSWVA shifted its model from a more traditional funder to a collective impact organization in order to engage with the community to solve complex issues that individual programs could not address alone. Part of that process was realizing that individual communities could not take on regional issues, and thus merging several United Way organizations into the UWSWVA that now services 21 jurisdictions and 17 counties.

UWSWVA advocates for an asset-based approach to economic development that focuses on helping people thrive, knowing such an approach would prove disruptive to the economic model of “selling” cheap land and labor. One example of their approach is the Ignite Program, where partners coordinate workforce preparation efforts, including Convening partners to connect students from middle school and high school to careers and using shared data collection to better understand if career interests in the region match projected career opportunities. The partners then coordinate career exploration, internships, and work-based learning opportunities through the Ignite Program, something that one partner or a smaller UW would have struggled to accomplish.

Implications for Rural Communities and Future Fed Publications

Anchor institutions, rural development hubs, and collective impact backbone organizations all serve as intermediaries in rural communities. The approaches of these organizations have their own emerging body of practice and literature, and it is beyond the scope of this article to do any of them justice. Future publications from the Richmond Fed will provide more depth and context around each approach and offer more examples of intermediaries that have helped small towns and rural communities in the Fifth District. Of course, for any rural community, their own assets and challenges will define the best approach. No one approach is better than the other, and intermediaries can combine aspects of the three approaches described here. Defining that approach will enable a community to adopt a solution that will align local organizations so that they can better contribute to building a thriving and inclusive community.

Interested in learning more about improving outcomes in rural communities? Attend our upcoming Investing in Rural America Conference on March 30 as we discuss strategies for investing in community-driven economic and workforce development initiatives. You can also check out Our Regional Focus, where you can find additional research and analysis on rural communities and other pressing economic issues that affect our communities.