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The VT COVID-19 Response Fund Recovery Initiatives: A Q+A on Rural Entrepreneurship

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The Community Foundation established its VT COVID-19 Response Fund in March 2020 to encourage collective, coordinated grantmaking efforts that can quickly adapt to changing circumstances. Since that time, grants have gone to ensure vulnerable populations receive basic needs—something that is top of mind given recent spikes in cases. In September, we announced five recovery initiatives that address key challenges magnified by the pandemic: Rural Entrepreneurship, Food System Resilience, Rural Connectivity, Learning in Transition, and Welcoming, Equitable, Anti-Racist Communities. Through focused grantmaking, our goal is to set the state on a pathway to more equity and greater resiliency in the face of future disruption.

Rural Entrepreneurship

All over Vermont there are people who have great ideas for solving problems or helping in their communities. Yet in many areas of the state—especially rural towns—the necessary support to get those ideas off the ground can be a major barrier.

So how will improving the connections between creative people, innovative ideas, and the tools they need to start a business help our state recover from the pandemic? We connected with Chelsea Bardot Lewis, senior philanthropic advisor on our Grants & Community Investments team, to learn more. In her work with our Vermont Investment Pool, Chelsea is in consistent communication with small business owners and capital providers, giving her strong insights into challenges and opportunities for entrepreneurship.

 

Why has the Community Foundation decided to focus on “Rural Entrepreneurship” as part of its pandemic recovery strategy?

The pandemic has had significant impacts on our economy. When developing strategy, we look to the past to see what lessons we can learn—how rural places like Vermont have recovered from an economic recession. We were inspired by research showing that after the 2008 recession, geographies that had higher numbers of new digital ventures (measured by new domain name registrations) recovered more quickly. No matter how big or small, how aspirational or what the motivations were, when registered domain names were created in mass, something about that correlated to economic recovery.  

We think that by supporting entrepreneurs and emerging ventures—that creative person starting a recreation league, a hair salon, or a new artistic venture—we can get Vermont on the right track towards economic recovery.

What does a grantmaking strategy in support of “Rural Entrepreneurship” look like in action?

We know that our grantmaking strategy needs to build on “where we are now” as it relates to Vermont towns and cities catering to new entrepreneurs. Our state economy has recovered since 2008, but it was not a complete recovery. Rural regions like parts of the Northeast Kingdom and Southern Vermont have not gotten back to where they were, and certain demographics, such as people of color and households headed by single women, are not back to their pre-recession financial standing.

For this reason, we know that we need to go beyond supporting entrepreneurship hubs, but also focus on those places across the state that must be prioritized if we want to ensure a full recovery. Before going into implementation, I want to explain what I mean by entrepreneurship hub. Picture a location, usually physical but happening online more frequently now, where creative people with business ideas can come together to co-work, learn from one another, and accelerate each other’s ventures. These spaces also typically have faster internet, conference space, and educational programming on skills entrepreneurs need to hone to be successful. The Community Foundation has supported these spaces in the past, including The Space on Main in Bradford and Black River Innovation Campus in Springfield.

To put this into action, we start by doing a landscape scan with input from our existing partners in more rural areas to understand where these entrepreneurship hubs are emerging, then conduct due diligence to understand what they need to really flourish, and how philanthropy can support.

We’re asking, “How do we create the capacity to build up hubs in places where they don’t exist?” We are seeding this work through our partnership with the Center on Rural Innovation, which will support additional Vermont communities as they develop and refine strategies for building an inclusive digital economy ecosystem.

We also know that access to capital is critical, particularly for early stage entrepreneurs. We have already supported and will continue to engage with community development finance institutions to understand how we can best support their new business clients.

And, we’re hoping that by supporting the launch of the Vermont Startup Collective, we will see all of this activity and energy amplify through connectivity. The Collective is a way for entrepreneurs, investors and advisors from across the state to connect safely online during the pandemic.

So capital and technical support—is that all that’s needed to create the right conditions for rural entrepreneurship?

It’s a good question! We also recognize that certain conditions make some communities more ‘entrepreneurship-friendly’ than others. We know that many people are attracted to Vermont because of the outdoor recreation opportunities offered here, then become rooted because of the strong sense of community in our downtowns and village centers.

That’s why we have joined the State of Vermont on two partnerships. Alongside the Vermont Outdoor Recreation Economy Council, we’re making grants to six communities that are aiming to further develop and capitalize on their outdoor recreation assets. We’re also launching the Agency of Commerce and Community Development’s Better Safer Places initiative, which will support improvement efforts that keep communities connected in a COVID-safe way. As the fiscal partner, we'll work with other funders like Vermont Arts Council, Preservation Trust of Vermont, and the National Life Foundation on this critical effort.

What does success around “Rural Entrepreneurship” look like? How will it help make Vermont better for all Vermonters?

We’re living in uncertain times, and too many Vermonters are experiencing food insecurity, unemployment, housing trouble. Anyone with a good idea should have the hope and optimism that their idea can form their livelihood—in the community where they already are.

Vermont is also facing major challenges with age demographics. More entrepreneurship tends to bring in more young people and increase the diversity of our state’s population.

And as these businesses grow, they will hire more Vermonters, and purchase more Vermont goods and services. New employees mean new housing, new economic activity, and more community engagement and vitality. We want to see this jumpstart a more resilient economy for all. 

What hurdles currently stand in the way of success around this initiative, and how will they be addressed?

This is really where this initiative is intersectional with both the other recovery initiatives and the Community Foundation’s overarching focus on the opportunity gap in Vermont. There are systemic barriers—access to broadband, healthcare, childcare, capital—that make it hard to start a business.

What gives me hope is that this is exactly where we and our partners are focused. Take Let’s Grow Kids, which has been instrumental in raising childcare as a priority in the state’s pandemic response, drawing public funds to support it. Or the Vermont Women’s Fund, which for the first time ever gave out a second round of grants in 2020 to help women and girls rise and thrive.

We have more work to be done. I don’t think we could call this initiative a success post-COVID if Vermont leaves the same rural areas and vulnerable demographics behind. We need to create communities that are welcoming and attractive to all new founders and employees to claim that we’ve made steps towards a more inclusive economy.

How can the Community Foundation’s fundholders and donors help support its work around “Rural Entrepreneurship”?

In my last answer, when I said, “We need to create communities that are welcoming and attractive,” this is a call to action for all of us. As we’ve discussed, it's more than just the technical sides of entrepreneurship—the broader community plays a major role in ensuring new venture success. When communities have outdoor recreation amenities, bustling downtowns, affordable housing, strong broadband—these are the puzzle pieces that lead to successful entrepreneurship. Creating inclusive and welcoming communities for all people is also vital—diversity breeds innovation!

I encourage anyone reading this to think about your own community. If you wanted to start a business there, would you? Do you have some of the pieces of the puzzle I mention? Starting in your own backyard is always a great first step.  

To learn more about the Recovery Initiatives, read the press release here.