The infrastructure bill currently under debate in Congress could send historic amounts of federal funding to rural communities. This is good news, but there will be challenges too. The “how” of these funds will quickly become very important, as important as or even more important than the amounts of money overall.

The organization I founded in 2010, Coalfield Development, works to diversify the coal economy in southern West Virginia. We start new social enterprises in sustainable sectors (solar, green-collar construction, sustainable agriculture, and recycling/reuse). We use those enterprises to create employment and training opportunities for low-income people. To do so, we’ve utilized multiple federal grants, as well as many grants and investments. We have a unique rural perspective on funding issues.

Many rural counties in this country are not blessed to have a community foundation. If they do, the grants tend to be very small ($5,000 to $10,000). According to New Profit’s Rural and Small Town Action Summit (which recently convened virtually), 78% of the country’s high-poverty counties are rural. Yet only 7% of all philanthropic money goes to rural communities. So philanthropic dollars are scarce.

Private financing is tough in rural places. Many have broken, malfunctioning markets. Hence the high poverty rates in the first place. Due to declining tax revenue, state and local government agencies often have even less capacity than community nonprofits.

So rural social entrepreneurs like myself often have to look to the federal government for financial support. The best thing about federal grants is they tend to be large. But accepting federal dollars can have extremely painful costs for an organization. Simply applying for these funds requires weeks of staff time (which, if the application is unsuccessful, go completely unfunded). I’ve never submitted a federal grant application that was less than 100 pages total. And a private match is almost always required, which for parts of the country with high poverty and low philanthropy can be quite difficult (often to the point of making a grant application a non-starter).

Once the application goes in, the applicant typically is waiting four to seven months for an award notice or declination. Even if you get the grant, the costs still keep piling up. Reporting requirements are stringent. Audits are common. And restrictions are many. Money for keeping the lights on, administration, and general operations are nearly non-existent among federal agencies.

These funds are only granted on a reimbursement basis. Getting reimbursement requires fairly advanced accounting acumen. Getting the actual reimbursement cash to hit a bank account commonly takes two full months from the moment of request. For smaller organizations, the reimbursement process can trigger severe cash flow problems.

An influx of federal funds into rural America will put tremendous burdens on community development organizations who have been doing the long, hard work of healing the deep wounds that often haunt marginalized communities. These social innovators are gems. Private philanthropy is desperately needed to support these organizations, to build their capacity, and to scale their innovative solutions to some of the most complex and threatening challenges facing our country and world.

Federal funds often punish innovation rather than reward it. Failure to meet certain grant outcomes is threatened with re-capture of funds, failed audits (which disqualifies you from future funding), or even time in prison (no kidding). Yet room for trial-and-error is needed. Many rural areas need economic research and development (“R & D”) to figure out what an entirely new economy can look like in the wake of rapidly declining industries of old (such as coal, gas, and some sectors of the agricultural sector, to name just a few).

Coalfield Development has done a lot with a little; we’ve trained over 1,200 people, helped start over 50 new businesses, and created 300 new full-time jobs. But we’ve had to do it on a shoestring. Keeping the lights on has been tough. Hopefully, we have an opportunity to achieve an entirely new scale of impact. But we’ll need both public and private partners to do so.

As daunting as many of these challenges are, this remains an incredible moment of opportunity for rural America. If we can get this right, then we can truly start to bound up some of the deep divides and wounds currently tearing our country apart in dangerous, scary ways. Private philanthropy is much needed to help us all get this right.