Partners, Volume 15, Number 2, 2005

Spotlight on the District

How do rural southern communities achieve greater prosperity? This question set the agenda at the Southern Growth Policies Board’s annual “Summit on the Rural South” held in Point Clear, Alabama, in June 2005.

This year’s meeting featured presentations of rural success stories, innovative approaches to rural development, and academic studies. It was chaired by the Honorable Bob Riley, governor of Alabama.

The Board’s annual report, “The New Architecture of Rural Prosperity,” synthesized input from over 2,200 southerners through focus groups, community forums, and surveys. Five basic prerequisites emerged as crucial for the success of southern rural communities: 1) strong, forward-thinking leadership; 2) strategies to make rural areas attractive to young people; 3) quality education; 4) preservation of a distinctly rural character; and 5) strategic investments in infrastructure.

Recommendations to promote economic growth
The annual report states that economic development must be approached as a set of interrelated activities that create, expand, and recruit businesses. Continuing prosperity depends on managing communities as integrated enterprises. “The work of industrial recruiters and the activities of capacity builders must be brought together to operate in harmony. Otherwise, the recruiters may be pursuing call centers while others try to build capacity for biotechnology firms,” the report says.

The report further recommends designing and managing economic development along the lines of economic regions, without regard to traditional political boundaries. The study advises combining resources regionally to serve the aggregate community more effectively. In most cases, regions include at least one metropolitan area to serve as a central hub. Experts argue that rural communities must band together to achieve the critical mass essential for competitiveness in recruiting industry and other potential economic investments.

Entrepreneurship is vital to a stable community
Though most rural communities make business recruitment the first priority, keynote speaker Mark Drabenstott, vice president and director of the Federal Reserve Bank of Kansas City’s Center for the Study of Rural America, believes that “rural communities should put more emphasis on entrepreneurship and less on recruiting industry.”

In fact, he believes rural communities need to set entrepreneurship as their first priority and recruitment as their last. Large businesses can put rural communities at risk through plant closings and extensive layoffs. According to Drabenstott, building a community with a strong base of entrepreneurial talent provides a more stable environment and hope for a better future.

This article was written by Michael Milner, regional community development director at the Atlanta Fed’s Birmingham Branch.

The Southern Growth Policies Board is a public-private partnership dedicated to strengthening the South’s economy and maximizing its quality of life. For more information visit their website at

A unique partnership that includes federal and local government, the private sector, faith-based organizations, and social service programs is helping the working poor in Jacksonville, Florida, move into the economic mainstream.

Combining funding from a variety of sources, Fresh Ministries Individual Development Account (IDA) Partner Group enables families to build wealth and strive for economic independence. The group received a $1 million grant from the federal government along with matching funds from the City of Jacksonville’s Community Development Block Grant Program, Bank of America, Community Partnership for Protection of Children, and a private foundation.

Fresh Ministries is a faith-based organization that serves the urban core neighborhoods of Jacksonville. Its IDA Partner Group collaborates with neighborhood-based nonprofit organizations, private sector affordable housing providers, and local government agencies, including the Jacksonville Housing Authority, Vestcor, Families First, Jacksonville Urban League, Community Partnership for the Protection of Children, Family Counseling Services, Habijax (Habitat for Humanity of Jacksonville), Operation New Hope, and Community Connections.

Financial education a key component of program
Central to a successful IDA program is a foundation of personal financial education. Participants complete a financial education course and establish bank accounts provided by SunTrust Bank and Wachovia. They are required to make monthly deposits. Over a two-year period clients can save up to $2,000, which will be matched by a maximum of $4,000 in federal and local funds for a total possible savings of $6,000.

IDA savings accounts target low-income individuals and families and may be used to purchase a first home, pursue post-secondary education or job training, or capitalize the start-up or expansion of a small business.

The IDA program also coordinates with the Northeast Florida Prosperity Campaign and other community organizations as well as the Atlanta Fed’s Jacksonville branch. The Campaign encourages participants to use the Earned Income Tax Credit (EITC) as a tool to accumulate savings toward the IDA goal.

Biggest challenge for programs is marketing
Marketing their services to eligible families has been the biggest challenge for both the IDA and EITC programs. For many the program represents their first opportunity to budget for and maintain regular savings, and it sounds “too good to be true.”

While none of the participants have completed the program thus far, several are nearing their goals. Seventy percent are saving for the downpayment on their first homes. One participant, Sheila Jenkins, a formerly homeless mother of five, used a portion of her Earned Income Tax Credit to start her IDA savings account, and she is now saving to buy a home.

This article was written by Janet Hamer, regional community development manager at the Atlanta Fed’s Jacksonville branch.

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