33-6-3: Model for Rural Transformation

Residents of rural housing facilities face significant barriers to well-being and employment. Lack of transportation, poor infrastructure, lack of internet access, and inaccessibility to health-care services are but a few examples. This project holistically addresses such challenges by embedding social enterprises in to rural affordable housing communities where they will employ and empower low-income tenants through the holistic 33-6-3 model which each week provides: Paid 33 hours each week within innovative social enterprises creates agency and economic mobility. 6 hours of coursework builds to college degrees. 3 hours of personal development increases family assets. These enterprises create new jobs in sectors more sustainable than the extractive-industry jobs currently dominating rural areas (and contributing significantly to climate change). Examples include: renewable energy, bio-based manufacturing, re-use and recycling, organic agriculture, technology, and the arts. Tenant’s lives are transformed as they become agents in the building of an entirely new, more just economy.

Rural America has broken economies due to patterns of historic ownership and control.  Household income in our region is 80% of the national average and 1/4 of children live below the poverty level. Before the pandemic, West Virginia’s labor participation rate was 54.8% compared to the national rate of 63%. Even more sobering is that 74% of 25-54 year-olds are working compared to the national average of 83%. The reasons why are multifaceted, and include a lack of jobs due to the transition away from a coal-based economy, and a lack of relevant skills, but also includes a lack of transportation and access to health/social services. These factors also show up in the growing life expectancy divide along rural-urban lines with a 20-year gap between the lowest and highest counties. Overcoming despondency is our greatest challenge. Immediately tangible benefits are necessary to overcome cynicism. Trust is broken in these communities. Outside corporations have left our natural environment in ruins (mountain-top removal mining has buried more than 1,000 miles of waterways). Government programs have proven inadequate to address root causes of problems (such as job training programs for jobs that don’t exist). In this environment, local leadership and ownership is crucial.

33-6-3 is more than a paycheck and a job-training program. Our model broadens an individual’s capacity to simultaneously afford housing and pursue economic opportunity in their local community. At the same time, these new enterprises create local markets and job-pathways in sectors more sustainable than the resource extraction jobs currently dominating rural areas (and contributing significantly to climate change). 

As developer and general contractor, Coalfield has leverage to create spaces supporting our delivery of services and social enterprises. In-house work-crews enable us to build, own, and manage mixed-use, mixed-income facilities. The unique and supportive spaces we create are a crucial enhancement to our capability of empowering and transforming tenant’s lives. Employed through the 33-6-3 model, construction crews improve the quality and energy efficiency of existing housing units or construct new affordable units. New units constructed are woven into small-town community fabric so as to support broader revitalization efforts and help tenants connect to walkable opportunities. Housing stability is improved through 33-6-3 because: Tenants earn gainful employment and wage-increasing credentials; Green-collar construction crews create more affordable units; Existing tenants get lower utility bills.  Also, our idea is geared for rural places, flexible enough to also be tailored  depending on local need.

This project focuses on low-income residents of affordable housing facilities. Racial minorities, those who have lost their jobs in dying fossil-fuel industries, and people in recovery from Substance Use Disorder (SUD) have been our focus and will remain so for this project. Residents of rural housing facilities face significant barriers to well-being and employment: lack of transportation and internet access, poor infrastructure, and inaccessibility to health-care, for examples. This project holistically addresses challenges one-by-one. Racial minorities in rural areas face even more disenfranchisement, exclusion, and unfairness than those in urban areas and this project prioritizes minority communities. Many jobs in rural America are in fossil fuel industries. These jobs are, in many cases, dying away, resulting in economic calamity for the local economies long-dependent on them. The opioid crisis has ravaged rural communities. Our response to this scary problem is the renewed hope and opportunity via 33-6-3, paired with focused recovery supports. Through a partnership called Reintegrate Appalachia, we’ve partnered with West Virginia University Health Sciences to train and place more than 100 people in recovery in new jobs. These participants work a 33-6-3 “Plus” model, the “plus” is for recovery coaching and peer support.  

Our 33-6-3 model improves lives holistically, transforming the trajectory of opportunity for low-income residents. Paid 33 hours each week increases economic mobility and housing affordability. 6 hours of coursework builds to an Associate’s Degree. 3 hours of personal development increase family assets and employment skills. This holistic approach to resident-empowerment builds a new generational foundation for a fairer, more sustainable, and more just economy. New investment begins to flow. People are not just helped, but become leaders in the rebuilding of their economy and reinvention of their community.  

Full-time = 13

Part-time = 2; 

Contractors = 1. 

Total = 16

We intentionally, proactively, and affirmatively seek equity-based outcomes and prioritize racial diversity in our recruitment and hiring processes. For 33-6-3 specifically, this approach informs recruitment, hiring, and human resource development. Our commitment to racial equity is evidenced by our community partnerships as well. We have long worked in 3 of West Virginia’s largest minority neighborhoods: Fairfield in Huntington, Westside in Charleston, and Berwind in McDowell County, and partner and work alongside the WV Black Pastors Association. 33-6-3 will continue to expand and deepen collaborations with minority-led organizations. Throughout the year, all employees of all Coalfield Development social-enterprises take part in various exercises specifically designed to address racial inequality and wrestle with the realities of privilege; examples include implicit bias training, book clubs and reflections, and diversity celebrations. This project will ensure tenants of rural housing properties have access to these same exercises. 

Job training alone cannot guarantee economic opportunity and housing affordability when good-paying jobs are in short supply. Our model is different because through social enterprise and 33-6-3 we empower individuals, build their capacity and wealth and cultivate new, diversified local economies. Our model doesn’t rely on minimum-wage jobs, but supports formerly unemployed people to develop skills necessary for the new markets to succeed and attract new investment to the region. 

Most rural multifamily properties do not offer the same robust resident services as can be found in larger metro areas. By embedding our project in rural housing, our project provides both a better, more sustainable approach to workforce development than what currently exists and infinitely more valuable resident services than what is currently available.

Similarly, job training does not help if there aren’t many jobs available in a place to begin with. Our model is an answer here, too, and one that doesn’t put people in minimum-wage jobs but incubates entire new businesses that offer good wages and benefits. The “3” in our model empowers our employees to reduce debt, improve credit, and grow savings. We build rural people’s capacity so they can not only earn good jobs, but keep those jobs, earn raises, get promoted, and thrive.

First, this project will digitize the 33-6-3 model into an online curriculum, complete with instruction and resources for a full year’s worth of job-training and mentorship. This technology will then be available for vulnerable communities across the country. Second, this project will introduce broadband internet to dozens of properties caught in the “digital divide”. A portion of the funds we are raising will seed a Rural Housing Broadband Fund (leveraged 4:1). This would be utilized as a match for federal programs incentivizing broadband development and leveraged with private financing. Having de-risked the investment opportunity for utilities, we will then finance broadband deployment to rural housing facilities throughout the region. Third, this project will make solar conversion possible for low-income tenants (often making for the first-ever solar installation project in a given small town or county). Utility bills are reduced to near zero, while empowering rural people to become leaders in the greening of the region’s economy and infrastructure. This solar objective will be achieved through a technological innovation that regulates hot-water-usage, thereby generating water-bill savings which are in turn used to finance the up-front installation costs. This project also establishes a Rural Housing Solar Fund which will be leveraged four times over with private funding to achieve dramatic solar power increases for the region. 

In 2018, we digitized our personal development curriculum and made it available on tablets we distributed to all of our trainees. We invested in satellite Internet and  cellular hotspots for locales without accessible or affordable Internet.  While many take the Internet and cell service for granted, people living in rural areas often have neither, and therefore are not familiar with computer basics beyond what they might have learned in public school. This places rural residents at a disadvantage when applying for jobs, interacting with medical providers, accessing e-commerce or managing services. By normalizing digital interactions and providing the tools, we are helping a generation of people embrace information and learning in new ways. Through this, we are also creating the need for a technology-savvy workforce that is prepared to install and maintain broadband services once they reach our remote communities. In 2016, we launched Rewire Appalachia to train solar installers to meet the needs of local solar businesses. In 2018, this enterprise was acquired by Solar Holler, a growing solar financing and installation company with experience in innovative financing solutions such as the water-bill savings solution mentioned above. Please visit https://www.solarholler.com/our-work/ for additional information.

Our theory of change, below, builds on 10-years of practical research, evaluation, and feedback from our program participants, collaborative partners, and investors. 

IF individuals in rural extraction-based economies face barriers to well-being as a result of living in distressed communities caused by an undiversified economy contributing to:

•reduced opportunity for personal, professional, and academic development; 

•a workforce built around one dying industry now lacking modern skill-sets and higher educational attainment/credentialing;

•a lack of entrepreneurial activity/business investment, and therefore a lack of access to quality employment opportunities that pay well;

•low morale, cynicism, empty buildings, scarred landscape, and

• low community capacity/money for effective reinvestment beyond that one industry;

AND Coalfield Development realizes such individual well-being can be improved through:

•creating employment-based social enterprises that prioritize and systematize personal and academic development for employees of the business (meaning paid work, higher education support, professional credentialing, professional mentorship, and life skills);

•using these employment-based social enterprises to create both transitional and permanent jobs for people facing barriers to employment, and which are uniquely capable of solving both the lack of entrepreneurship problem and the workforce problem simultaneously, and

•taking risks (willingness to actually help own and operate) on employment-based social-enterprises and increased investment (actual sharing of funds) that patiently meet people where they are; a realization that job training doesn’t matter without new businesses to create jobs in the first place and business development doesn’t matter if it can’t access a skilled workforce;

THEN individual well-being again becomes possible in very tangible ways:

•new social enterprises become profitable, create permanent jobs, and attract investment in new diversified markets;

•the people staffing these businesses are growing and advancing personally, professionally, and academically; higher education rates increase; poverty decreases; entire families are benefitting from the individual’s development; the entire mood of communities begins to change;

•downtowns and landscapes are visibly revitalizing, coming back to life and attracting investors and entrepreneurs; and

•the tangibility of realized potential by individuals forms a new foundation for community and economic development more broadly throughout the entire community; a new economy is now becoming possible and, eventually, the region.

The primary vehicles through which we will make our investments in new communities over the next one to five years are our Social Enterprise and Economic Diversification (SEED) Fund and our Workforce Readiness and Professional Success (WRAPS) Partnerships. The SEED Fund will make equity investments in social entrepreneurs with viable ideas and willing to adhere to a triple-bottom-line and willing to utilize our 33-6-3 model to hire local people facing barriers to employment. WRAPS partnerships will identify community-based organizations willing to implement our job training and personal development curriculum for local people facing barriers to employment and co-located or near low-income rural housing. Through SEEDS, WRAPS and our current enterprises we will: support/engage with 740 employers; 330 entrepreneurs; create 700 new jobs, earn/reinvest $64M; help 1,875 people develop personal growth plans; train 7,000 in new skills with 5,000 earning professional certifications and 700 earning degrees. This expands exponentially with new partners and increased investment. 

Supporting individuals to overcome generational poverty involves complex, interlocking barriers: emotional, psychological, and physical (transportation, food, clothing etc.). Also, the technological, market and policy and financial barriers facing people in rural areas experiencing poverty will be amplified as COVID-19-related aid flows to cities with more obvious impact. Continuing to make the case for investment in places with lower population density, more difficult service delivery, and frankly, higher need has been, and will continue to be a challenge. 

At a community level, we regularly confront fatalism and cynicism resulting from generations of broken promises. Coal communities rank lowest in national labor participation, and some have 50% poverty rates. Though resilient themselves but wounded by generations of broken promises, skeptical residents doubt our ability to tangibly improve lives, and hesitate to fully engage. Local leaders can be slow to embrace our approach, first dismissing it as “more do-gooders telling us what to do.” Overcoming despondency is our greatest challenge, requiring immediate tangible benefits to demonstrate credibility. Direct employment is our “hook,” distinguishing us from other training programs. 

Such strategies must out-live grant cycles. These businesses must be trending toward profitability, but that’s hard for any new startup, let alone in distressed areas. Our approach (incubating diverse social enterprises in new but viable growth sectors outside of traditional extractives) is necessary for financial sustainability. As the businesses grow, less subsidy is needed. But the pressures of small-business will always be a main barrier, especially now in a post COVID world.  

We will overcome these barriers through our three core capabilities. 1) Incubating and Investing in Employment-Based Social Enterprises 2) Facilitating Professional, Personal, and Academic Development for People Facing Barriers to Employment, and 3) Leading and Collaborating on Community-Based Revitalization Projects. Through these capabilities, we are rebuilding our rural economy from the ground up, and are able to highlight the value of a stronger rural/urban continuum. We know, for example, that climate change, natural disasters and increasing population densities will drive people to rural areas, or increase the demand for the environmental services - such as carbon sequestration - that our landscapes provide. 

 Our work is to build a resilient economy and workforce that is able to meet its own needs, reduce the need for federal assistance, increase the local tax base, and re-balance the socio-economic relationship between rural and urban communities. Our approach of working with community partners to identify opportunities to develop affordable housing, training local people with barriers to employment to construct/remodel this housing using green techniques, investing in social entrepreneurs to co-locate their enterprises within these affordable rural housing communities, training the residents to work for and grow these enterprises and while gaining skills and education, and repeating this over and over has, and will continue to attract the resources needed, create more rural/urban parity, and recalibrate the policies and practices which are current barriers to this work.  

We would like to be collecting data on our anticipated deeper impacts which include measuring significant wealth creation/asset building by our trainees over time; labor participation rates in areas served; leveraged investment by other actors; and intangibles such as improved optimism; lower rates of drug abuse/addiction; and increased entrepreneurial mindsets. We would like to collect this data and run an analysis focused on evaluating which aspects of our work are tied most closely to these desired outcomes. We have not been able to collect data from some of our earlier trainees as we have lost contact with them over the years. We are creating an alumni network campaign to help address this issue. 

N/A

Entrepreneurs comprise our team – committed and compassionate Appalachians weaving together each other’s vast know-how, creative imaginations, and technical skill-sets. Each enterprise has its own social entrepreneur responsible for the success of the enterprise and expert in their specific field. Collectively, we strike a unique balance of for-profit discipline and non-profit compassion. Rural housing development looks different than urban, and our project team has a strong background in rural housing, having developed a combined $20 million in development projects and having managed a combined 1,200 units of rural housing. Empowering rural residents is our passion, as evidenced by a combined 114 years’ experience in community engagement, empowerment, and community and economic development. Our team has managed more than $35 million in grants and invested in more than 50 enterprises. Having a mix of social workers, business executives, and organizers empowers us to serve the whole person, not just implement rigid programs. Building trust in rural settings can be particularly challenging. It helps that the vast majority of our project team were born and raised in Appalachia and many are first or second generation college graduates.  Yet we know it’s important to have a blend of perspectives and backgrounds, which we do cultivate, including people from outside the region. 

Reversing generational cycles of poverty is extremely difficult, long, expensive, complex work. It takes a holistic approach, and one organization could never provide all of the support needed for success. As such, Coalfield is an extraordinarily collaborative organization. In making tangible projects happen, we partner with key county entities such as County Commissions or local Economic Development Authorities. For affordable housing developments, Housing Authorities are key partners. For workforce development, we work with Workforce Investment Boards and the Rural Community College Alliance, with two local Community and Technical Colleges providing crucial services. Being committed to holistic approaches to human development requires collaboration with entities that specialize in particular services. Local examples include West Virginia University Health Sciences Department,  Marshall University’s Creating Opportunities for Recovery Employment (CORE) initiative, and Wayne County Family Resource Network for health and wellness and drug use prevention/recovery,  Unlimited Futures is a colleague nonprofit providing financial skills, entrepreneurship, and professional development, and the West Virginia Black Pastors Association, EDGE of McDowell County, Appalachian Sustainable Development, Stepping Stones, Keep Your Faith Corporation, and Real Life Christian Center Church to host WRAPS cohorts,  help leads our community connections and promote diversity and inclusion programs. In addition to these groups, we are working with and/or have invested in over 50 social entrepreneurs through our SEED initiative which is creating more employment opportunities for our burgeoning workforce. 

We have honed our business model through a decade of rebuilding the Appalachian economy from the ground up The entire Appalachian region is not yet transformed, but we have been part of true transformations. We have seen people transform their lives: from former miners to solar installers, from former addicts to brave community leaders, from people dependent on public assistance to excited new members of the workforce. And we have seen places transform: from former mountain-top-removal scars on the landscape to sustainable agriculture and housing assets, from formerly vacant buildings to vibrant hubs for new business, from former closed down factories to revitalized hubs of entrepreneurship. We provided the engine for these transformations through meeting people and communities where they are, and working collaboratively and creatively to unlock their potential, power and purpose. People want options and a sense of agency, and most importantly, hope. Our model is predicated on employing people for 2.5 years because this is the level of investment it takes for someone facing significant barriers to employment to transform their life through personal, professional, and academic development. Sometimes, a need is beyond what we can provide alone, so we reach out to community partners with different expertise. And if the expertise does not exist, but is needed, we throw the net wider and look for entrepreneurial solutions. The hook to providing these services is social enterprise - the mechanisms through which we hire people. These businesses generate crucial unrestricted income which we are able to leverage. 

Through the SEED Fund, we take an equity position in the enterprise. As part-owner we provide technical assistance (which includes our new online resources available beyond just SEEDs), fundraising guidance, access to markets, and deep operating support. Crucially, we coach the implementation and execution of 33-6-3 to ensure maximum resident opportunity is generated by the enterprise. SEED investments are an intensive relationship beyond what a simple lending transaction can offer. Over the next five years, this project launches at least 30 enterprises based out of housing properties: the first 15 throughout Appalachia, the next 15 outside the region. Through sales and contracts, our social enterprises generate significant earned revenue, ensuring long-term financial sustainability, and the ability to leverage private investments/donations, grant funding and government support. For example, our woodshops manufacture and sell home furnishing products and custom pieces for commercial use. Our agriculture businesses produce and sell fresh local food as part of an expanding local food system. Our 100% recycled-material t-shirt company makes and sells tens of thousands of shirts annually. These flexible dollars generated are reinvested in the Coalfield mission to support widespread positive change. Our experienced development team pursues both foundation grants and federal awards and has attracted more than $20M in new investment to the region. We are building our capacity to attract individual donors and also raising funds for our SEED investment fund. Long term, our goal is for earned revenue to cover business expenses. 

We continuously raise funds for our 33-6-3 model, social enterprises, SEED funds, WRAPS partner agreements, and community real estate development work along with general operating support and enterprise-specific grants. Federal grants most specific to this work include: a  Department of Labor WORC grant for $2,500,000 that was received 9/29/19; and Department of Health and Human Services grant for $800,000 that was awarded on 9/23/2019.

Coalfield’s private grants most specific to this work include but are not limited to: Rockefeller Foundation THRIVE grant in the amount of $1,000,000 that was awarded 12/3/2018; Just Transition Fund grant for $150,000 awarded on 8/23/2020 ; Mary Reynolds Babcock Foundation for $300,000 that was awarded on 7/9/2018 ; and "anonymous funder" for $300,000 that was awarded on 10/5/2018. 2020 year-to-date earned revenue is $305,000

Coalfield has $138,200 in debt financing on two properties in Wayne, WV, and investments of $2,735,554 in two additional housing properties.  

We are experienced in blending public and private sources of capital. We are current on loans with 8 private banks. We’ve successfully closed over 50 federal grants. USDA is a key partner; most of the housing in this project will be USDA 515 properties, with an average mortgage of $2 million. Other agencies we will leverage include U.S. Economic Development Agency ($5 million committed to Coalfield projects since 2010) and Appalachian Regional Commission ($3.6 million over the past 10 years). More than 100 individuals and over 30 private family foundations also support our work. 

We have successfully raised funds for every aspect of this program. However, the innovation presented here is to develop or rehab housing properties with the intent to co-locate social enterprises nearby that would hire and train the residents. Therefore, we are seeking $3M to launch this initiative at 15 sites within WV and 15 sites regionally. For new enterprises launched, we project generated revenues of: 

Q1 $500,000, Q2 $1 million , Q3 $1.5 million , Q4 $2 million 

Overall, Coalfield Development maintains diversified revenue streams- balanced with earned income, foundation donations (25+ per year), and federal grants (10+ per year) and seeks a 4:1 leveraging approach with $4 private for every $1 philanthropic.

We plan for $8.2 million in revenue (94% grants), $4.2 million in operating expenses, and $4 million in net income. We will invest $3.8 million in real estate renovations, equipment and SEED fund equity. 

The negative impacts from generational poverty creates compounding obstacles to well-being, and our initiative had to evolve to do much more than job-training. In our severely distressed local economy, we had to be not only the job-trainer, but the job-creator. We also had to learn to mentor and address financial, emotional, and psychological challenges. This is why we emphasize the “6” and “3.” We create the kinds of supportive, flexible work environments which patiently support a person’s rise out of the complexities of poverty.  

As 33-6-3 was gaining traction the main industry in our community (coal) was collapsing, leading to unemployment not seen since the Great Depression. We expanded to meet the dire need. By 2014, we had (in addition to construction) started new enterprises in manufacturing, solar installation, and agriculture. 33-6-3 was proving replicable and scalable. In 2015, we hit 200 people trained and expanded from one county to three. In 2016, we hit 600 trainees, and our service area grew to include six rural counties.

We are now systematically reimagining relationships between affordable housing, resident services, and economic development and need thought partners, and connections to like-minded nonprofit leaders and partners working in communities and with populations of people who face barriers to employment. We need to accelerate our expansion strategies in order to keep testing our approach, and transforming lives. 

Coalfield Development has a proven track record for achieving results in Southern West Virginia - an area hit hard by the decline in the coal industry, and struggling to transition to a more just economy. We seek partners at all levels who are interested in joining us as we model our 33-6-3 solution that returns triple-bottom-line results, and therefore want to engage with local actors in other rural areas who are similarly trying to rebuild their economies from the ground-up. We would also like to identify partners with expertise in monitoring and evaluation so we can better describe and verify our social and environmental returns on investment.  

We are looking to partner with organizations engaged in rural development, just transition, housing services, addiction/recovery/diversion services, social enterprise, workforce readiness, climate change, and rural housing development.