Reporter's Notebook

Danville, Virginia
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Three Big Lessons From One Small Town

The headquarters of the Institute for Advanced Learning and Research, in Danville, Virginia
The headquarters of the Institute for Advanced Learning and Research, in Danville, Virginia Courtesy of the Institute for Advanced Learning and Research

Here is another look at the far-southern-Virginia town of Danville: once a thriving tobacco-and-textile center, now trying to figure out what to do after all the mills have shut down.

In keeping with the previously announced intention to keep drawing connections, parallel themes, and lessons from the communities we visit, here are three aspects of Danville’s story worth noticing elsewhere, as boiled down as I can make them. A summary:

  • First, Danville’s civic renewal shows the importance of a relatively new form of philanthropy.
  • Second, it shows the importance of creative use of a onetime historical event—in this case, the “tobacco settlement,” which directed billions of dollars from the tobacco industry to local institutions. (This naturally leads to questions about whether a comparable “opioid settlement” might have similar transformative effects.)
  • Third, it shows the importance of public investment in infrastructure, specifically in broadband capacity.
Old mill buildings in downtown Danville being reoccupied (James Fallows / The Atlantic)

Previously, I did several reports on Danville’s attempt to put its extensive (and beautiful) inventory of old mill buildings to modern use: “The Reinvention of Danville’s Downtown, Part 1,” “Danville’s Story, Part 2,” and “How Danville Avoided Omaha’s Mistake.” Deb Fallows has written about the involvement of Danville’s faith community (and others) in dealing with rural health issues (“A Regional Approach to Rural Health Challenges”), and about the exceptional new Y that has opened alongside the Dan River downtown ( “A Community Within a Community”).

On to the details.


1) The role of foundations—and foundations of a particular sort: Institutions called “community foundations” are well known, active, long-established, and important across the country. Each year, they give a total of more than $5 billion to civic and charitable efforts in their areas.

The evolution of Danville and its surroundings has been very heavily influenced over the past 15 years by a similar-sounding but structurally different sort of charitable organization, the “health conversion foundation.”

In Danville, the relevant organization is called the Danville Regional Foundation, or DRF. The DRF’s effects in this part of Virginia and North Carolina are too broad and deep to cover in any detail here. For more of the specifics, I direct you to the DRF’s informative site, or articles like this in The State of the South or this in Perspectives on History. Almost everything under way in the vicinity—from the revival of Danville’s downtown to the launching of regional initiatives connecting smaller towns that have lost tobacco, textile, or furniture industries—bears the mark of the DRF. Its area of responsibility includes the city of Danville itself, neighboring Pittsylvania County in Virginia, and the larger Dan River area extending into Caswell County in rural North Carolina.

Why is this worth mentioning? Because of the foundation’s origin story. It’s one of a group of health conversion foundations across the country that have played a surprisingly large civic role over the past generation. Or at least surprising to me, since I hadn’t know about this specific form of modern philanthropy until our first trip to Danville last fall.

You can read extensive details about health conversion foundations from Health Affairs, but in brief: These are charities set up when a nonprofit hospital or similar facility is sold to a private company. Hundreds of them operate around the country, with total assets in the tens of billions. Some examples are the Rapides Foundation, of Louisiana, founded with $140 million in hospital-sale proceeds in 1994; the Cameron Foundation, of Petersburg, Virginia, founded in 2003 with hospital-sale proceeds valued at about $90 million in 2008; and the Harvest Foundation, of Martinsville, Virginia, which was also founded with the proceeds from the sale of a hospital, in 2002, with assets valued at about $200 million in 2008. Many more examples are listed in the Rural Health Initiative newsletter, here.

In Danville’s case, the foundation was formed after the sale of the local Danville Regional Hospital Center to a private company, LifePoint Hospitals, in 2005 for about $200 million. The DRF has given out some $116 million in grants since then; and through the magic of investments and the market, its endowment is now larger than when it began.


The restored tobacco building on Bridge Street in downtown Danville that the Danville Regional Foundation shares with Averett University (Courtesy of the Danville Regional Foundation)

Could the sale of a nonprofit health center to a for-profit firm conceivably be a net benefit for a community? As opposed to one more step toward an over-marketized, winner-take-all society?

I started out skeptical, and I still assume that the outcomes must vary case by case, depending on how the new foundation’s money is put to use, and how the new for-profit system runs. But an initial look at think-tank and academic papers suggests that many of the foundations have tried to address public-health and community-improvement goals in their areas.

For instance, here are some reports and articles I’ve seen: “With the ACA Under Fire, Can Health Conversion Foundations Patch the Safety Net for Low-Income Americans?,” in Health Affairs in 2017; “How Are Health Conversion Foundations Using Their Resources to Create Change?,” also in Health Affairs, in 2018; “Health Conversion Foundations: How to Make Them Relevant,” in Nonprofit Quarterly in 2016; and “A New Generation of Health Foundations,” in Healthcare Finance in 2014. On balance, they offer a positive assessment.

“I won’t say that every one of these foundations has fulfilled its potential,” Karl Stauber, who is stepping down this summer after a dozen years as the head of the Danville Regional Foundation, told me. “But my estimation is that two in 10 have had an oversized impact on the revitalization of the areas that they serve.”

Maybe everyone else reporting on rural and smaller-town development already knew about health conversion foundations. I hadn’t understood the importance of this recent part of the philanthropic landscape until we were introduced to it in Danville. (Now, of course, I see signs of it everywhere.)

By the Dan River, in the River District of Danville, Virginia, this summer
By the Dan River, in the River District of Danville, Virginia, this summer James Fallows / The Atlantic

This summer, Deb Fallows and I visited the southern-Virginia town of Danville, and the surrounding rural areas of Pittsylvania County, Virginia, and the adjoining Caswell County, North Carolina. In its heyday, Danville was a thriving textile and tobacco community. The famed Dan River Mills operated along (you guessed it) the Dan River, which flows through the center of town and from which the town draws its name.

After the textile mills closed and much of the tobacco business collapsed, Danville went through a long decline—like many other communities in this part of the Piedmont region.

Over the past few years, a fascinating recovery has been under way: in the downtown, through reuse of abandoned mill and warehouse structures as new residential and office spaces; in areas that had lost mill jobs, through agricultural, chemical, and advanced-manufacturing start-ups; through creative use of money provided through the “tobacco settlement”; through advanced broadband capacities; and in other ways. You can read the set of articles that Deb and I did on Danville and its region here.


Today The Roanoke Times has an editorial called “Lessons From Danville,” which mentions our reporting and extends some of the implications to other small towns and cities in the region and beyond.

Because so much of the reason for Deb’s and my ongoing reporting is the hope that ideas and solutions that have been tried out in one place—like Muncie or Fort Wayne, Indiana; or Brownsville, Texas; or Eastport, Maine—might apply elsewhere, we’re gratified by efforts, like The Roanoke Times’, to consider the experiences of other communities.

Samples from its editorial:

Danville still has plenty of troubles, of course—the Ikea plant there recently announced its closing. But economic development everywhere has always been several steps forward and several backwards at the same time. The big picture is that Danville is undergoing a remarkable transformation, from a Southern mill town without any active mills to a poster child for how to build a new economy out of the ruins.

And:

Whatever Danville has done, it’s mostly done on its own, which ought to be a pretty powerful message but also perhaps a scary one to some communities. National politicians can be glib about assigning blame—be it foreign competition or rapacious corporations—but local leaders need to ignore all that and get to work fixing their own communities.

The lesson for voters: If your local elected officials aren’t doing that, replace them with ones who will. Danville provides a pretty good “up-by-the-bootstraps” example of what can be done.

Worth reading and considering, beyond Virginia and North Carolina. Thanks to the editor of The Roanoke Times.