Moving beyond grants: How a Kansas community foundation creatively invested to fast-track rural internet access

21 Oct Moving beyond grants: How a Kansas community foundation creatively invested to fast-track rural internet access

Hutchinson Community Foundation CEO Aubrey Abbott Patterson was in disbelief. It was March 24—one week after the Kansas governor shuttered schools for the academic year—and she was reading fresh survey results about student internet access in her county of 60,000.

“It’s no secret rural and low-income families suffer slow or spotty internet issues here in central Kansas, but I was astounded that 20- to 30 percent of students didn’t have access at home,” said Patterson. “As everyone was scrambling to work and go to school online, rural and low-income people were being left behind.”

The situation sparked an idea. Patterson, along with her staff and board, had been exploring a shift in their strategy to impact investing, and this could be a perfect pilot project.

“Traditionally foundations invest in the stock market and use the earnings to make grants,” she said. “We’d been asking ourselves, ‘Wouldn’t it be better if we could solve big issues through investing in local business ventures?’ It’s a win-win for our community.”

Patterson had the perfect partner in mind: rural-focused, locally owned broadband service provider IdeaTek, based right down the road. IdeaTek had recently won federal funding to bring fiber internet to the most under-served rural homes in the county. Perhaps there was a way to expedite rural service county-wide.

“Over the next few years, IdeaTek is building out the fiber network to much of the rest of rural Reno County, but that leaves thousands of households without acceptable internet as they wait for construction to complete,” said Daniel Friesen, IdeaTek’s Co-Founder and Chief Innovation Officer. “When the Community Foundation floated the idea of an impact loan bridge that time gap right now, we said, ‘Absolutely!’”

Though IdeaTek had been focusing exclusively on fiber internet connections, Friesen had been toying with the idea of next generation fixed wireless technologies for rural areas that would significantly increase speed and reliability. These technologies were much faster to deploy than fiber.

“Usually rural wireless service has speeds of less than 10 megabits per second. This new technology will deliver 100 mbps or ten times that,” Friesen said. “It’s a technology we can implement broadly in weeks, not years. This is a perfect opportunity to put it into action in such a critical time.”

Soon, Patterson was at the table with IdeaTek, the Hutchinson/Reno County Chamber of Commerce, and the United Way of Reno County, hatching a plan to immediately build rural broadband infrastructure and subsidize connections for low-income families. The plan included a combination of loans and grants addressing several community development aspects.

The newly formed coalition took the idea to their respective boards and stakeholders for input and approval.

Patterson approached five donor advised fund holders and worked with the foundation’s Strategic Impact Committee to secure investments from two of the foundation’s unrestricted community endowments. Soon a $215,000 loan pool was amassed.

“It was a big sum, but in the grand scheme of the project, $215,000 wouldn’t be nearly enough,” Patterson said. “We needed to attract more investment.”

She put in a call to Steve Radley at Network Kansas and Jeff Usher at the Kansas Health Foundation, citing the crucial role of internet access in the health and vitality of local communities—a move that would more than double the pot. The agencies offered a $225,000 loan and $25,000 grant from the Kansas Community Investment Fund, an investment partnership between the Kansas Health Foundation and Network Kansas.

Meanwhile, the other Reno County coalition partners were also making progress.

The Hutchinson/Reno County Chamber pursued the angle of workforce development. Through its Greater Hutch economic development division, it offered IdeaTek a $30,000 grant in return for creating at least 30 new full-time jobs within four years, with attention on hiring COVID-19 displaced workers. “A local company that grows through improving our business climate, education, and livability in such a fundamental way is exactly the kind of company we want to support,” said Debra Teufel, the organization’s President and CEO.

United Way of Reno County focused on ways to provide free and reduced service costs for qualified Reno County residents for a one-year period. “Just because service is available doesn’t mean people will be able to take advantage of it,” said Lisa Gleason, the organization’s Executive Director. “We wanted to make sure this project would actually achieve the end goal of connecting our citizens most in need.”

Just as the project funding plan was coming together in June, the coalition received game changing news. The State of Kansas announced Connectivity Emergency Response Grants (CERG) as part of the federal COVID-19 relief funding package. Now a $500,000 project limited to serving the most severely disconnected residents will expand to a $2.5 million effort that would cover the large rural population burdened by substandard, slow, spotty connections.

The groundwork laid by the coalition not only made the application easy, but it was also an easy-to-replicate model for other Kansas communities pleading for better internet.

“We’ve been approached by communities across Kansas desperate for better access for years,” said Friesen. “We were able to use the Reno County coalition’s work as a model to apply for CERG funding for several other communities.”

In early October, the State of Kansas announced awards. Reno County received its $2.5 million request. IdeaTek’s three other community projects were also funded—a grand total of $13.7 million in grants, which would bring service to over 8,000 homes in early 2021.

“We realized we have resources right here, right now, to spark investment and address these kinds of social issues,” said Patterson. “We just have to think creatively to deploy our resources differently, in ways that attract other funding to our community.”

Patterson hopes this philanthropic-public-private partnership will be a model for other communities to address issues of all kinds. “Broadband is just one of many issues we can address through philanthropic investment in private ventures,” she said. “I am excited about the possibilities not only for our community, but for communities across Kansas and the nation.”