Oil Boom Pushes Montana Communities to Their Limits, Philanthropic Response Needed

Oil Boom Pushes Montana Communities to Their Limits, Philanthropic Response Needed

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By Jean Agather, Manager, Oro y Plata Foundation and Philanthropy Northwest Board Member
and Mandi Moshay, Communications Manager, Philanthropy Northwest

For many of the cities and towns in eastern Montana, a recent oil boom has brought welcome relief to struggling economies. But the massive influx of new residents is leading to difficult-to-control growth and a strain on the infrastructure of municipalities that are accustomed to relatively little fluctuation in their population. The explosive growth has also brought on an increased demand for social services, and yet-to-be-known environmental implications from both drilling and rapid residential and commercial development. Bakken Oil DrillingOil well pumping early in the morning east of Sidney, MT. Photo by James Woodcock/Billings Gazette.

With its commitment to improve communities, what role, if any, should philanthropy be playing in response to the impact of drilling and development on Montana’s families and communities? That question was posed on the most recent Philanthropy Northwest Montana-Wyoming-Idaho Funders Teleconference.

The virtual roundtable discussion brought together community leaders residing in the Bakken oil region of Montana to share their knowledge of community needs with local funders. The goal of the conversation was to help funders understand the urgency of the situation and to encourage grantmaking organizations to consider how they might collaborate to address the developing issues. While “Bakken” has become synonymous with “jobs” in much of Montana, wild stories abound on the boom town impacts on families and communities such as Sidney, Glendive, and Miles City. The strain on services has implications beyond the physical infrastructure of a city (water, sewer, garbage, etc.), but also on the availability of affordable housing and social services that locals have come to depend upon.

A portion of Oro Y Plata’s funding supports these areas and grantees report having difficulty keeping up with the increased demand. The nonprofit organizations providing these basic services simply do not have the financial or overall capacity to handle the impact of this rampant growth.

The impact is felt across a number of service areas:

  • Housing - Affordable housing is gone; what little inventory of housing that is available sky-rocketed in price overnight. Locals on fixed incomes are unable to afford the rents and are losing their homes.
  • Education and childcare - Many of the services families depend upon are critically stretched; the supply of licensed childcare providers and teachers is no longer adequate. After-school and summer programs for children do not have the capacity to meet the need of unsupervised children whose parents are working long hours.
  • Public Safety - Law enforcement personnel cannot keep up with demand; jails are overflowing, drug and alcohol problems are expanding, and domestic violence is on the upswing. The all-volunteer firefighting squads are stretched to their limits.
  • Healthcare - Healthcare services, including mental health treatment, are also suffering from lack of providers and facilities. Suicide rates are at an all-time high in many areas.

Complicating matters is the simple inability for nonprofit and service organizations to recruit staff, whether the positions are part time, full time, substitute, or intermittent. The elevated pay scale for oil employees cannot be matched by nonprofit employers; at a time when demand has never been higher, organizations are under extreme amounts of additional stress because they are under-staffed and under-resourced to meet the demand. Community leaders are working hard to meet the overwhelming demands ironically created by this new prosperity, and they hope the philanthropic sector will understand how critical their needs are right now. Unfortunately, there is a significant lag time (about two years) before tax revenues from drilled oil reaches these communities to address necessary expansion of infrastructure. (Even then, many of the social needs will never be funded by increased taxation). Community leaders have seen little corporate philanthropy from the businesses that are benefiting from the Bakken drilling, but admit that they are ill-equipped to approach institutional funders of any kind having been capable of taking care of their small towns mostly on their own up to this point. So what can philanthropy do now? Community leaders in Montana would like the funding community to understand this is a crisis situation (think natural disaster); support is needed immediately and should be funneled to established organizations on the ground that know best how funding can be put to work in their respective areas. The few private and community foundations that exist in the area are still fairly new and do not have experience at building philanthropy and making strategic grants. Finding a way for foundations that fund in the area to address these issues collaboratively could have tremendous impact. Most nonprofits are in desperate need of funding to build their capacity in order to bolster their staff and systems to respond to increased demand for services. If you are interested in helping one or more of these communities, contact Jean Agather to learn more and get connected to leaders from affected areas. In the meantime, Montana Nonprofit Association (MNA) - with generous support from The Paul G. Allen Family Foundation, the Steele Reese Foundation, and others - has begun work to bring organizational development programming to nonprofits in eastern Montana. MNA hopes to offer immediate support to nonprofit leaders while gaining a better understanding of the challenges faced by these formerly small towns in eastern Montana. Of course, the need in these communities is a greater burden than one organization can bear, and Philanthropy Northwest will be staying in touch with MNA to hear about what they are learning and will share updates to let funders know how they can get involved. A follow-up discussion will take place on a Montana-Wyoming-Idaho Funders Teleconference later this year. To learn more about the significant impact the oil boom is having in eastern Montana, read Montana State University’s Montana Policy Review: Community Responses to Energy Development, which includes testimony from city mayors and managers regarding the staggering new challenges that are facing rural oil communities.