danville-cover-imageWith an economy that grew with the tobacco markets, Danville, Va., like many Southern cities, flourished as a textile milltown for much of the 20th century, becoming one of the South’s wealthiest small cities. By 2004, decades of slowdown became a full-blown crisis. Dan River Mills, the largest employer in Danville and once the largest textile firm in the world, laid off its last employees in 2006, all while the region’s wealthy tobacco economy vanished. The demise of Dan River Mills altered the economic and social fabric of the community: job options for the working class became scarce, the middle class shrank, and young people had fewer economic opportunities as they joined the workforce. It was into this environment that the Danville Regional Foundation (DRF) was introduced; Danville Regional Medical Center was sold to LifePoint Hospitals, Inc., and $200 million was invested to create the foundation. Since their founding in 2005 (happy 10th anniversary), DRF has engaged in local investment to help the Danville region see and realize what’s possible: a post-mill economy that offers broad opportunity. Along with their partners in the region, DRF is committed to aspirational planning for long-term economic vitality, equipping people in the region with the adaptive skills they need to succeed during economic transition, and building the leadership and organizational capacity to manage change and maintain momentum in the future.

As late as 1969, Danville had a median household income that was equivalent to the rest of Virginia and the U.S. as a whole. Today, the median income is in Danville is half that of the state of Virginia, and only a little more than half that of the U.S. Here, as in much of the South, access to opportunity goes up dramatically based on your economic situation, race, and social connections. The challenge now is responding to rapid and unpredictable shifts in economies and labor markets that make it difficult for young people and community leaders to decide how to invest in their education and skills. The Danville region is trying to develop and attract new economic drivers with living-wage employment, and working to ensure that community members, particularly young people, have the skills to compete in the new economy.

These are major challenges, but with significant resources and leadership coming from the Danville Regional Foundation, the Danville area is better positioned to strategically invest in the community’s future than many places in the South. “We’ve got close to $8 million invested in building a new workforce pipeline that will lead people in this region to having really high quality, living wage jobs and they’ll do that because they’ve gotten a great training,” says Karl Stauber, president and CEO of DRF, in an interview with the Danville Register & Bee. “Our greatest hope is that those jobs will be here. The city and the county economic development offices are actually using that pipeline as a way of helping to recruit new businesses.”

This kind of investment is a perfect example of what MDC calls Passing Gear Philanthropy. In our 2007 State of the South report, Philanthropy as the South’s “Passing Gear,” we described the unique role that philanthropy can and must play to help Southern communities improve their economic competitiveness and civic cohesion:

In order to extricate the South from its imbedded inequities, however, Southern philanthropy will need to make strategic use of its freedom to act…Philanthropy can be catalytic, imaginative, and pioneering. It can test new ideas, build new institutions, and lower the cost of social innovation by subsidizing risk.

Philanthropic institutions are positioned to make investments that private markets and public policy may not be able to, because those sectors have limited flexibility in how they can address complex social issues; the monetary return may be difficult to calculate, public consensus may not have been reached, leadership turnover is frequent, and resources are often allocated to familiar programs. As Stauber explains, “We can take risks that others may not be able to take. We don’t have to satisfy stockholders. We don’t have to run for re-election.”

Compared to other local entities, philanthropic institutions are generally more able to be flexible and stay committed to a long-term plan—able to take both the long view and respond to immediate conditions. The Danville Register & Bee article about DRF’s ten-year anniversary details the strategies that DRF has prioritized, from supporting a major pre-K initiative, to workforce pipeline investments like a STEM academy in the high schools and a nursing program at Averett University, to building a stronger infrastructure for economic development and fostering entrepreneurship. None of DRF’s strategies will work with their investment alone; “everything we do we do [is] in partnerships with others,” says Stauber. For example, foundation investments in downtown revitalization are part of a package that includes $25 million from DRF and the public sector and $100 million from the private sector. While these initiatives are already paying off in the region, their full results won’t be evident for generations. From Stauber’s view, “That kind of slow and steady progress is what it’s going to take to return this place to a place of prosperity and a place of opportunity.”

MDC helped guide creation of the Danville Regional Foundation. For more about MDC’s role in Danville, take a look at our monograph, The Only Way Out is Up: How MDC helped Danville, Va., chart a new vision for its future.”