Giving Compass' Take:

• Liz Farmer explains why the opportunity zones created by the 2017 tax bill may not be sufficient to draw investors into rural communities where they are needed. 

• How can funders help to encourage investment in rural communities? Could rural investments make it into your impact portfolio? 

• Learn about investing in the heartland. 

The federal government released new guidelines for the nation’s more than 8,700 "opportunity zone" communities trying to attract venture capital investment and boost their struggling economies.

Rural areas account for 40 percent of the designated opportunity zones, which offer private companies and investors tax breaks in exchange for investing in certain low-income communities. But some warn that even with the tax incentives, many rural areas still likely won't benefit unless state and local governments intervene to make the investment less risky.

“A lot of investors are hesitant to work with rural communities,” says Grey Dodge, who implemented Florida’s Opportunity Zone program as the state's economic development policy director and now supports the program through Madison Street Strategies, a consulting firm. “In contrast to six or seven opportunity zone counties in Florida that don’t have to do much -- the investment is already flowing there -- these other areas haven’t seen investment in decades.”

The zones were created by the 2017 federal tax overhaul as a way to entice companies to invest in underdeveloped areas. Investors can reduce the capital gains taxes they owe on previous investments if they invest those gains in opportunity zone communities for at least seven years. They can eliminate that tax bill entirely if they let the money ride for a decade.

But that’s not enough for most firms and investors to take the leap in rural areas -- even if places try to sweeten the deal with additional state and local tax breaks.

Read the full article about rural America and opportunity zones by Liz Farmer at Governing Magazine.