You have vaguely heard of the Appalachian Regional Commission. It is a creature of government that has been around for more than 50 years.
The ARC is a collaborative of the federal bureaucracy and the 13 states that they all consider to be within Appalachia, that dark and mystical place — the Moldova of America — prone to impoverishment and resistant to modernity, that the rest of the nation does not understand nor ever will.
West Virginia is the only state entirely within Appalachia. Parts of New York, Maryland and Mississippi are of Appalachia, declared the ARC’s 1965 implementing legislation, however suspect it might have been to make them so. Thus, eventually together with the nine other states that it now serves, however minimally, the Appalachian Regional Commission is completely immune to the occasional attacks of fiscal hawks seeking to pick it off as part of big and wasteful government.
The ARC has been cleverly designed so that Congress cannot possibly get rid of it. That is how the ARC, a micro-agency with no fewer than 26 U.S. senators backing it, has survived for half a century.
What does the ARC do? Its mission, the ARC itself states, “is to innovate, partner and invest to build community capacity and strengthen economic growth in 420 counties across” Appalachia.
That means it hands out government money, generously provided by all of the people of the United States, and spreads its cash across the mountains.
Last year, the ARC says it “invested in 591 projects totaling $152.3 million,” “attracting more than $206.1 in matching funds” and “leveraging an additional $735.3 million in leveraged private investment.” In West Virginia, the ARC says it supported 55 projects with $19 million, matched by $17.1 million and leveraging $12.2 million in private investment.
(I was struck that, relatively, the ARC’s investments in West Virginia leveraged an underwhelming amount of private investment. The poor performance immediately suggests just how badly the state has been doing in that measure.)
Appalachia gets special treatment. West Virginia gets special treatment. That sounds good to me. Despite that we caused most of our own mess, we need all the help we can get.
To fill this hole, the ARC has come to function in large part as a venture fund and charity serving Appalachia all rolled up into one. If there are private venture funds serving West Virginia in particular, they aren’t especially significant or dynamic. There are only a few foundations, the sowers of innovation, that serve Appalachia.
To put this in some perspective, the 25 largest charitable foundations in America each doled out as much or more money as the ARC in 2017. Harvard, Yale and Stanfords endowments contributed more to their universities. Appalachia has nothing remotely close to the wealth of private institutions of the nation’s big cities and coasts.
As much as the most powerful equity investors and foundations talk about Appalachia’s problems, they don’t do much about them with the resources they have or, if they are charities, they are obligated to share and spend.
Nor do they seem to want to. As global institutions, they usually are out and about the rest of the world seeking higher yields or tackling newer and more interesting problems than the tiresome ones that persist in the backwaters of Appalachia.
The Ford, Gates and even, oddly, the Rockefeller foundations have not made and do not make major investments in Appalachian institutions.
In an era of monumental philanthropy, the ARC serves as a charitable foundation for Appalachia, shifting from its initial major investments in roads and sewer systems to capital formation and institutional development and growth.
A knock against the ARC is that its 50 or so staff are headquartered in Washington, D.C., culturally and psychologically as far away from Appalachia as Moldova.
Late last year, Sen. Mitch McConnell and Rep. Hal Rogers, both Kentucky Republicans, introduced a bill to re-locate the ARC offices from Washington to a place in Appalachia “to be selected later.” The current federal co-chair of the ARC just happens to be a former McConnell aide.
Hmm. In the possibility of a relocation of the ARC, it appears that Kentucky is a heavy favorite, doesn’t it?
I don’t think that West Virginia should roll over on this one. It would be disappointing to learn that our Congressional delegation and our governor are unprepared for the possibility. They should openly compete for it, starting now.
There’s little doubt it would be a race only between Kentucky and West Virginia. West Virginia, entirely in Appalachia, has a strong claim for the headquarters. Kentucky’s claim is that it is the next most Appalachian state.
The ARC’s headquarters have to be in a city of some size. Would it come down to Huntington, Charleston, Lexington and Frankfort?