Skip to:
  1. Main navigation
  2. Main content
  3. Footer
Notes from the Field

Investing in Coal Country

The Central Appalachian region is currently experiencing an economic transition. Philanthropic organizations are working to overcome the region’s challenges by capitalizing on its natural assets.

The views expressed in this report are those of the author(s) and are not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System.

On April 24–26, I attended the Appalachia Funders Network (AFN) Annual Gathering in Pikeville, Kentucky. Formed in 2010, AFN is a group of philanthropic organizations that collaborate to support and accelerate equitable transition in the Appalachian region. It was the ninth Gathering the AFN has held; it was my sixth time attending. The purpose of the Annual Gathering is to provide a way for philanthropic organizations to meet in person to develop relationships, exchange learning and analysis, and share strategies for investing in the Appalachian region. Network members recognize that the more resources that can be aligned, coordinated, and delivered, the better chance they have to address the challenges that hamper the region’s success.

Why is there a focus on Appalachia? The central Appalachian region—a region that includes the Appalachian counties of Ohio, Kentucky, Tennessee, Virginia, North Carolina, and all of West Virginia—is experiencing an economic transition. That means there is a concentrated investment of physical, social, fiscal, and human capital into the area. In Central Appalachia’s case, the movement is a response to challenges such as the decline of the coal industry as a source of employment and economic growth, a pervasive public health crisis, and prolonged underinvestment in the region’s organizations, businesses, communities, and youth. The Appalachian transition is about overcoming these challenges by capitalizing on the natural assets of the area—its charm, art, natural resources, and scenery—and building upon the leadership within the region in hopes of setting a new course for the region’s communities.

The transition movement is gaining momentum as it relies on a diverse and growing coalition of partners who share a vision: a region of healthy communities of locally rooted economies that promote sustainable and broadly shared prosperity. A turning point for economic development in the region is the investment in broadband. Developing residents’ technical skills is one way to diversify the economy and make the region’s workforce more accessible. The region’s geography makes it difficult to access; high-speed internet can level the playing field (virtually) and provide employment opportunities to a region that suffers from high unemployment.

Another example of workforce diversification is training former coal miners to be computer coders. During a tour of Pikeville, we visited Bit Source—a web design, mobile application, and game design company that does just that. Owners Rusty Justice and Lynn Parrish established the company, in 2015, with an intent to repurpose the intelligent, hard-working, and highly-skilled men and women left unemployed or underemployed by the former coal industry. The company's slogan—A New Day. A New Way.—fits its mission of transitioning a workforce that once exported coal to a workforce that now exports code. Pikeville’s workforce is onboard: In its early days, Bit Source received nearly 1,000 applications from those eager to get started on a new career.

While the motivation toward a path forward is strong in the Appalachian region, change will require long-term partnerships, shared leadership, and sustained investments to be fully realized. The AFN is a helpful vehicle by which funders can deepen their analysis, build constructive relationships, and make strategic investments to strengthen communities and the economy for a lasting transition.