Canadian Rural Partnership
Research and Analysis

The Long Run Role of Institutions
in Fostering
Community Economic Development:

A comparison of
leading and lagging rural communities

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Acknowledgements

Executive Summary

Background
This report explores the ways in which voluntary organizations, civic institutions, and community events contribute to community economic development processes in leading and lagging communities.

The key questions in this context were:

• What services and programs are provided by institutions? What are their contributions to the social well-being of the community? Which are perceived as being most important or most identifiable within the community?

• What networks and partnerships are employed by institutions?

• What is the relative vitality and health of institutions? What changes have occurred over time?

• What are the important intangible institutions or processes in the community?

• What are the critical challenges and issues for community institutions?

Methodology
Interviews were conducted with three principal types of institutions and with a set of general key informants from the communities, using the procedures outlined below:

• Key informants. In each site three (3) formal leaders (people in elected positions or positions of authority, such as mayor, councillors, clergy, administrators, President of Chamber of Commerce) and three (3) other "active" people or informal leaders (business people, executive directors of public institutions or agencies, or other well-informed residents) were selected and interviewed.

• Voluntary sector organizations. A list of all voluntary sector organizations in each community was created. These were sorted into the following categories: Social Services; Health Services; Local Economic Development; Youth and Seniors; Service Clubs; Sports and Recreation; Religion; and Political. One organization was randomly selected from each for an interview. If there were no organizations in any particular category, a random selection of as many additional organizations from the other categories was used to bring the total to eight (8) in each community. (Note: some interviews in some sites were completed in the summer of 1999 as part of another study.) Interviews were completed with a member of the organization's executive - usually the President.

• Civic institutions. A list of local representatives of health (hospital, medical centre, health clinic), education (public school, post-secondary education institution), and municipal government (or equivalent) institutions was created. In cases where no institution existed in any of the three categories, no substitute interview from another category was completed. In cases where more than one institution existed in one category (such as an elementary school and a high school in the same community), one was randomly chosen for an interview. Interviews were completed with a senior management-type individual - a principal, executive director, manager, mayor, municipal administrator, etc. In some cases a regional institution not located within the site boundaries was selected for an interview, if it was deemed that a sufficient number of site residents made use of the institution's services.

• Community events. A list of community events (festivals, celebrations) for which exclusive membership was not a requirement was created. "Regional" events hosted in another community were included if people from the site played a significant part in helping to organize or work the event. Three events in each site were selected at random, and an interview with the event coordinator was completed.

A total of 20 of the communities within the New Rural Economy sampling frame were chosen as locations to conduct interviews and surveys. Eight of these were leading communities and 12 were lagging communities.

Differences Between Leading and Lagging Communities
Looking at those variables which are statistically significant at or near the 0.05 level (most significant), or where there is about a 20% difference in the response, we identify that within leading communities compared to lagging communities:

• there is a greater concentration of voluntary organizations related to society and public benefit, education and youth issues, and social services;

• voluntary organizations are more likely to be involved in providing care and support;

• voluntary organizations are more likely to suggest that other existing volunteer groups could step in and fill gaps if they were to cease operations;

• health care institutions decreased the services they provide within the past five years, but education institutions have increased their services;

• representatives of voluntary organizations and business people are each more likely to participate as workers at community events;

• more of the leading communities have events which are longer in operation;

• there is a greater perception that the community has the capacity to work together to act on opportunities and to solve problems;

• voluntary organizations are more likely to identify individual and collective burnout as a pressing challenge.

In lagging communities compared to leading communities we note that:

• voluntary organizations are more likely to be involved in collecting and serving food;

• voluntary organizations are more likely to suggest that local government could step in and fill gaps if they were to cease operations;

• more community events were started for economic purposes;

• "other" community events, often more narrow in their purpose and scope of activities, are more likely to be identified as "defining" events for a community;

• voluntary organizations are more likely to be partners with an institution in the community, usually for the purpose of delivering programs or services;

• health institutions are more likely to be partners with local organizations and local government;

• education institutions are more likely to be partners with local businesses and organizations from outside of the community;

• local government is more likely to be partners with local businesses, local organizations, and organizations from outside of the community;

• businesses are more likely to contribute cash to community events;

• voluntary organizations identify that finding new general members is difficult or very difficult, but at the same time many more of these groups have experienced a net gain in membership in the past year;

• more voluntary organizations related to education and youth activities, and employment and economic interests, have formed in the past five years;

• voluntary organizations are more likely to identify lack of members as a pressing current challenge;

• local governments are more likely to face budgetary problems or pressures.

Conclusions
Institutions in rural communities play an important role in building social capital and social cohesion, and provide the fundamental building blocks for community economic development processes in communities. Voluntary organizations provide a range of services and programs, and serve as important partners for civic institutions. However, they also suffer from lack of funding and membership challenges. Community events provide important social and economic spinoffs, including helping to build the identity and self-esteem of the community. Civic institutions provide important services and programs for citizens, but are challenged with budgetary reductions and changes in service delivery.

Voluntary organizations and civic institutions provide important services and programs in their communities. There is a high degree of social and economic impact from the work of voluntary organizations and from the community events which happen locally. Communities value the work of their voluntary organizations, especially those with a general mandate related to society and public benefit. They also most readily identify with general community events as being important in the community. These suggest that there is a high degree of social capital and social cohesion in communities.

There is also a high degree of networking and partnership within rural communities, particularly between voluntary organizations and civic institutions. However, some of these partnerships may be placed in jeopardy as voluntary organizations struggle with membership and funding issues, and as institutions themselves work in more difficult budgetary constraints.

Finally, rural communities benefit from a high degree of informal and teamwork approaches to making things happen and achieving results. While the circle of participation is sometimes small, we note that rural people are characterised by their individual willingness to pitch in and help out particularly in times of crisis, and by a strong sense of community identity. Although in lagging communities there is less certainty about the community's capacity to work together, it is these "social capital" elements which suggest there is a strong foundation for community economic development action in rural communities.

• Voluntary organizations collectively identify that the most important work they do is the supervision or delivery of events, programs, and services. They also identify fundraising and sharing of information. Volunteer groups are also frequent partners for civic institutions to provide a full range of programs and services in the community. At the same, they also identify as their critical challenges lack of members and lack of funds. They also identify that there would be substantial impacts if their organization ceased to exist, with little or no capacity for others to fill the gap that would be left. The problems associated with these "capital" issues are real. From a policy perspective, all three levels of government must review the type of financial relationship they have with these critical partners. Adequate renumeration for the ongoing operational costs of voluntary organizations must be included in any financial arrangement for delivery of programs and services.

• On a related note, in lagging communities there seems to be a weaker network of voluntary organizations, based on the comments from the voluntary sector interviewees about who could potentially fill the gaps in their organization ceased to exist. There is a danger that local delivery of some programs and services might not continue if such an event were to occur. Civic institutions and all levels of government should review their partnerships with these organizations to determine what measures of support are required for the continuation of the partnership.

• New voluntary organizations to address the needs of seniors and youth were most frequently identified in all types of rural communities as a need. With an aging population there will be a need for more community based networking and support. As youth are challenged by changing economic opportunities, fragmented households, and less extended family networks, more community based programming will be required. Communities must spend some time planning for the short and long term needs in these areas, and appropriate strategies to respond.

• Among community events, those with a focus on arts and culture and on sports and recreation tend to be more visitor oriented and offer a higher level of potential economic return on investment. These events must be supported with appropriate community and government contributions to maximize economic impacts. Furthermore, community events in general have been characterized as critical elements in building the social fabric and cohesion within the community. Local institutions, organizations, businesses, and general citizens must be made aware of the social and economic impacts of these events, and be encouraged to support them more fully where possible.

• Finding new board members has been problematic especially among older voluntary organizations. At the same time, most groups readily admit that they do not have a strategic approach to recruitment. There are many resources available on this subject. A role for the federal government (perhaps through its Rural Secretariat and through its Voluntary Sector Initiative) could be to coordinate the sharing of this information.

• Half of the voluntary organizations identified that they have little or no funding to do the work they want to do. At the same time, there are many foundations and government programs which have funding to address some of these concerns. There are some commercial ventures which provide a detailed service in helping community groups identify these funding sources. There may be an opportunity for the federal government to provide more and better information about these opportunities. Furthermore, local government (and possibly others) could subscribe to, or offset the costs associated with the purchase of, commercial information services about funding opportunities. This could be done for the community as a whole, and shared by all of the volunteer groups in the community.

• We know a great deal from the voluntary sector itself about what they do. This information could be supplemented with information from individuals and households, and the perceptions and relationships with volunteer groups in their community. This might provide clues about relative social cohesion within the community, and about programs and services that citizens might be looking for from such groups.

• On a related note, more than half of the voluntary organizations identified the need for additional organizations to be formed in the community to meet a variety of needs. More information is needed to identify the specific needs within communities, to map the community assets or resources, and to examine what partnerships or other arrangements might be possible to meet some or all of the identified needs.

• The voluntary sector is a key partner with civic institutions. More information is needed to explore the full extent of the partnerships, the models and conditions under which these partnerships best function, and the "value" of the voluntary sector in providing a partnership role.

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