Eight organizations have raised and distributed more than $450,000 in private funding to support more businesses and nonprofits in rural and mountainous areas of Eastern Kentucky, an area among the hardest hit by the impacts of COVID-19 restrictions and social distancing.
The funding has helped more than 150 small businesses and organizations across 23 Eastern Kentucky counties representing a mix of restaurants, unique retail, amusement, personal services and others active in the broader downtown and tourism ecosystems.
The Southeast Kentucky Downtown Business Stimulus Fund was established in late March by the Foundation for Appalachian Kentucky, the Appalachian Impact Fund (AIF), the Community and Economic Initiative for Kentucky (CEDIK), and Invest 606—with the goal of stabilizing local downtown businesses that have been central to strengthening the economy in rural mountain communities.
“Many businesses in the region were not able to obtain support from the federal programs intended to provide relief, so support from our stimulus fund represents the first, and sometimes only, relief these businesses have received,” said Lora Smith, fund manager of AIF, which is administering the downtown program. “These are the businesses that make our towns distinct and unique. It is critical to stabilize them now and position them for a return to growth when things turn around.”
Eight businesses have received no-interest loans and 153 businesses received mini-grants ranging from $600 to $3,000. One of the recipients of a mini-grant was Read Spotted Newt, an independent bookstore in Hazard that opened in January, was flooded in February, and closed because of impacts from COVID-19 in March.
“There have been a lot of obstacles,” said Mandi Sheffe, owner of Read Spotted Newt. “However, I’m trying to look at the positive, and the positive is that this will transition my business to an online, D2C, e-commerce model, and this grant will be instrumental in that.”
Smith said more than 600 businesses have applied through the stimulus fund, representing over $1.5 million in asks, thus far. Representatives from the partner organizations managing the fund meet weekly to review applications and distribute additional funding. The work is anticipated to continue into the summer.
“The recovery in rural America will lag behind metro centers that have more diversified economies and typically see greater shares of federal investment,” Smith said.
In addition to the focus on supporting downtown businesses, AIF and the Foundation for Appalachian Kentucky are preparing to make relief grants in support of the region’s nonprofit infrastructure, plus a special round of relief and recovery grants to support small farms in partnership with Community Farm Alliance.
The Southeast Kentucky Downtown Business Stimulus Fund is part of a larger effort, the Regional Response and Recovery Fund, which has raised a total of more than $1 million from private donors and foundations for COVID-19 recovery efforts in Eastern Kentucky.
Funding partners include the University of Kentucky’s Community and Economic Development Initiative of Kentucky (CEDIK), James Graham Brown Foundation, the Appalachian Regional Commission (ARC), the Educational Foundation for America, LG&E, WellCare, and the Greater Clark Community Foundation.
The Appalachian Impact Fund (AIF) is a pioneering social-impact investment fund supporting economic transition and community investment in Eastern Kentucky. AIF invests capital to advance opportunities that support economic diversification in the coalfields region. AIF is housed at the Foundation for Appalachian Kentucky in Hazard, Ky.
Since 2017, AIF has provided more than $1 million in grants to numerous regional nonprofit organizations, invested more than $1 million in downtown revitalization, entrepreneurial ecosystems, housing and homeownership initiatives, and attracted an additional $6 million in new investment funding to the region.
(provided by the Appalachian Impact Fund)