From disparities to equitable grantmaking: A path forward for New York State
The Big Picture
Did you know New York State ranks second in the country for total grant dollars awarded, with $27.7 billion distributed in 2022? This is second only to California's $33.7 billion (thanks to Instrumentl for the data!). But here’s the catch: 64% of New York’s funding goes to New York City, leaving only $10 billion for the rest of the state. With NYC home to almost 9 million people (~45% of NYS's population), that means 11.4 million people living outside the city are vying for that remaining $10B.
For comparison:
- New Jersey, third on the list, received $18.7B in grant funding for a population of 9.3 million.
- Massachusetts, fourth, was awarded $14.2B, serving roughly 7 million people.
What can we derive from this?
While it's essential to recognize the unique social challenges facing densely populated urban areas like NYC—including concentrated poverty and competition for resources—this data also shines a light on a potential issue for the rest of New York State: rural poverty, a lack of affordable housing across mid-sized cities, lack of access to services and supports due to proximity, and so much more.
So, consider, then: How do we ensure that communities with fewer resources, like rural areas and smaller urban centers, receive the attention they need? How can philanthropy adapt to address these gaps?
In this article, I will explore these questions and the data to draw some conclusions – and offer some calls to action for both nonprofits and the philanthropic community.
A Deep Dive into New York's Grantmaking Geography
New York State boasts a strikingly diverse geography. From the nation's most populous metropolis to five mid-sized cities rich in history and natural beauty, it is also home to the largest park in the contiguous U.S.—larger than 53 national parks combined—where over 120,000 residents live year-round across more than 100 towns and villages. This diversity of landscapes often sparks debates about the state's social, political, and financial dynamics. For example, those in Western New York may grow weary of the assumption that “New York” refers solely to the City, with vast areas beyond it often lumped into the nebulous category of “Upstate.” For many of us, “Upstate” is synonymous with the Hudson Valley, but others might see it extending from Orange County to Chautauqua. Such disagreements inevitably spill into discussions about funding distribution, where biases abound—including my own. But let’s let the data do the talking.
Private Funding: Foundations play a critical role in addressing public needs, contributing billions annually to support a wide range of causes. Despite this generosity, funding is distributed unevenly, both in New York State and nationally. A study by USDA Economic Research Service, using data from the Foundation Center, found that from 2005 to 2010, rural areas, which made up 19% of the U.S. population, received just 5.5% of large foundation grant dollars. Even after accounting for smaller foundations, rural communities still only saw 7% of total grant funding. In contrast, large urban areas received a disproportionately larger share, highlighting a significant geographic imbalance.
This disparity becomes even more pronounced on a per capita basis. Between 2005 and 2010, nonmetro counties received just $88 per person in large foundation grants, less than half the amount allocated to metro counties. Nearly one in five rural counties received no foundation funding at all during this time. Grants to rural areas tend to focus on education, environmental concerns, and recreation, while urban nonprofits receive more support for arts, culture, medical research, and social services. These differences reflect the diverse needs and challenges of each region, but the unequal distribution exacerbates the struggles rural communities face, especially those contending with poverty and limited economic opportunities.
Public Funding: Similarly, public funding is disproportionately concentrated in urban centers, despite federal efforts to invest in rural America. A recent analysis by Headwaters Economics (summarized here) revealed that FEMA’s Building Resilient Infrastructure and Communities (BRIC) program, intended to address climate-related risks, overwhelmingly favored high-capacity, often coastal, communities. Low-capacity rural areas received less than 20% of BRIC grants, largely because they lack the staffing and expertise needed to submit competitive proposals. Rural communities, with small budgets and limited resources, also struggle to meet the matching requirements for federal grants.
Despite efforts from the Biden administration to improve rural access to federal funds, including initiatives like the Rural Partners Network, the funding disparity persists. Only 3% of BRIC grants were awarded to low-capacity counties, underscoring the ongoing challenges these communities face in accessing vital resources.
What Does This Mean for New York State?
Take, for example, the Emergency Rental Assistance Program (ERAP). As of June 2023, the program had distributed nearly $3.1 billion across New York State, helping over 248,000 households. However, over 80% of these funds were concentrated in New York City, largely due to its larger rental market, higher rents, and socio-economic conditions. While these factors are significant, they leave other parts of the state, including high-need areas like Buffalo and Erie County, underfunded.
Erie County, which accounted for 4.5% of all applications (the highest share outside NYC), received only 2.5% of the total available funding. Similarly, Suffolk County, the largest recipient outside of New York City, received just 2.9% of the funds. According to 2023 data from the State Comptroller's Office, while 64.3% of rental households statewide are in NYC, the city received 81.2% of the total funding.
This stark imbalance highlights a broader trend: rural and non-metropolitan areas, despite their significant needs, continue to be overshadowed by large cities in funding allocations.
The Dangers of Underfunding the "Rest of State"
Underfunding areas outside New York City—encompassing rural regions, suburbs, and mid-sized cities—presents significant dangers that impact healthcare, education, and economic development.
Healthcare Access and "Medical Deserts"
Inadequate funding can severely impact healthcare access in these areas, leading to what are often termed "medical deserts." While rural regions face acute shortages of healthcare facilities and services, under resourced suburbs and mid-sized cities also grapple with challenges such as outdated infrastructure and fewer specialized care options. This results in longer wait times, reduced availability of critical services, and increased healthcare costs for residents. The broader "rest of state" suffers from a disparity in healthcare investment compared to NYC, exacerbating health inequities, and limiting access to essential care.
Educational Disparities and Resource Gaps
Educational opportunities are disproportionately affected by funding disparities, with mid-sized cities and rural areas often receiving significantly less support than NYC schools. This lack of funding translates into fewer resources for modern facilities, technology, and extracurricular programs, not to mention foundational high-quality academics. Students in these regions may face limitations in accessing arts programs, advanced coursework, and other enrichment opportunities. This inequity results in diminished educational experiences and long-term academic and career prospects, perpetuating a cycle of disadvantage.
Economic Development and Job Creation Challenges
Economic development in the "rest of state" is hindered by insufficient investment in infrastructure, workforce training, and business incentives. Mid-sized cities, while not as isolated as rural areas, still struggle to attract and retain businesses due to less competitive funding and fewer development programs. This impacts job creation and economic growth, leaving these areas at a disadvantage compared to NYC. The broader non-NYC regions face challenges in addressing these gaps, further impeding their ability to foster economic prosperity.
Childcare Deserts and the Impact on Working Families
Childcare deserts represent a critical yet often overlooked aspect of funding disparities, particularly affecting rural and underserved urban areas. These deserts are characterized by a severe lack of accessible and affordable childcare options, which can significantly impact working families, especially in lower-income communities. In many regions, especially outside major urban centers, the shortage of childcare facilities can force parents to travel long distances or face extended waitlists, which can be both time-consuming and financially burdensome. This scarcity not only affects parents' ability to maintain employment but also hampers early childhood development, which is crucial for long-term academic and social success. The underfunding of childcare services exacerbates these issues, leaving many families without the support they need and widening the gap in educational and economic opportunities between urban and rural areas. Addressing this disparity requires targeted investments in childcare infrastructure and support for providers to ensure equitable access for all families, regardless of their geographic location.
Broader Implications for Regional Equity
The funding imbalance between NYC and the "rest of state" creates a significant divide that extends beyond healthcare, education, and economic development. The focus on NYC often leaves mid-sized cities and rural areas under-resourced, resulting in inequities that affect quality of life and opportunities for growth. Without a more equitable distribution of resources, the "rest of state" continues to face systemic disadvantages, limiting their potential for development and perpetuating regional disparities.
A Path Forward: Solutions for Equitable Grantmaking
To address the funding imbalances between metropolitan and rural areas, it is essential for grant makers and foundations to adopt more equitable strategies that specifically support rural communities. By leveraging models that focus on rural needs and using innovative approaches to grantmaking, funders can empower under-resourced regions while fostering sustainable development.
Highlighting Successful Models of Rural-Focused Grantmaking
Several foundations have successfully integrated rural equity into their grantmaking frameworks, serving as models for others. These organizations often adopt a regional equity lens that considers the unique challenges of rural areas—such as limited infrastructure, lack of philanthropic networks, and fewer organizational capacities—while identifying opportunities for economic development and community empowerment.
For example, the Greater Rochester Health Foundation has recently expanded its reach beyond the City of Rochester to serve eight additional counties. In 2023, the foundation made 96 total awards, with 23% of those serving at least one county outside of Monroe. While this expansion is a positive step toward addressing regional needs, the burden should not rest on local foundations alone. Stretching resources initially intended for a smaller geographic footprint can dilute the impact. We have seen this recently with another local funder, where expanding reach to serve a larger area resulted in fewer funds per organization, ultimately hindering growth and sustainability.
This underscores the need for larger, statewide funders to step in and provide more substantial support to keep all parts of the state, urban and rural, whole and thriving. It is a shared responsibility to ensure that rural regions are not left behind.
Recommendations for Shifting Grantmaking Strategies
Foundations and grant makers can adopt several strategies to more equitably distribute resources and invest in the future of rural communities and mid-sized cities:
- Capacity-Building Investments for Rural Nonprofits: Many small nonprofits operate with limited staff and resources, making them less competitive in traditional grant processes. By investing in capacity building—whether through training, technical assistance, or leadership development—foundations can help these organizations build the skills necessary to successfully apply for and manage larger grants.
- Collaborative Grant Seeking: Particularly in regions where nonprofits are under-resourced, collaborative grant writing initiatives can help level the playing field. By funding collaborations that pool the assets of multiple organizations, grant makers can encourage a regional approach to solving community problems while helping rural nonprofits secure larger, multi-year funding. In addition, other partners, such a colleges/universities, minority and women-owned businesses, localities, and the like can join the effort, bringing a multitude of perspectives and resources to bear.
- Place-Based Funding Initiatives: Place-based grantmaking emphasizes funding projects that are deeply rooted in the specific needs and strengths of a particular community. This approach helps build local ownership and ensures that grants are designed with an understanding of the unique cultural and economic landscape of rural areas. Rural Local Initiatives Support Corporation (LISC) is an example of a national program that applies a place-based approach, investing in affordable housing, broadband access, and small business development in rural regions.
Case Studies and National Initiatives
A successful national initiative, the Rural LISC program, empowers rural communities by investing in infrastructure, small businesses, and housing. Through partnerships with local organizations, Rural LISC ensures that resources reach communities with the most pressing needs, addressing the economic and social barriers that prevent rural areas from thriving.
Another example is the Appalachian Regional Commission (ARC), which has focused on investing in entrepreneurship, education, and healthcare in rural Appalachian communities. Their multi-state collaboration model ensures that funding addresses regional disparities while promoting economic growth and local job creation.
Call to Action: What Grantmakers Can Do Now
The example of the Greater Rochester Health Foundation’s expansion of reach illustrates both the potential and the challenges of addressing regional equity. While some local foundations are stepping up to serve broader regions, the onus should not be on them alone. Larger, statewide and national funders must also adjust their strategies to ensure rural areas and smaller urban centers receive a proportionally balanced share of resources.
Grantmakers have an opportunity—and a responsibility—to shift their strategies and ensure that areas outside of major metropolises receive equitable support. Whether through capacity building, collaborative efforts, or place-based approaches, foundations (and government funders) must consider the unique needs of these regions to foster inclusive growth and sustainable community development. By adopting these strategies, funders can help bridge the gap and support a more equitable distribution of resources across both metropolitan and rural areas.
This article was originally published as "Grantmaking Disparities in New York State: Why Rural Communities and Mid-Sized Cities Are Missing Out" by Pamela Ayers, Sr Consultant, Grants Management | Empreinte Consulting, LLC on LinkedIn.
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