An initiative launched Wednesday by the Federal Reserve Bank of Boston and the Maine governor’s office aims to boost prosperity for Maine’s lower income residents and connect people across social, economic, and geographic divides.

The Working Communities Challenge is a grant program run by the Boston Fed that mobilizes local leaders to take on chronic issues such as poverty, joblessness, or a shrinking workforce. Maine now becomes the fifth New England state to adopt the initiative.

Maine Gov. Janet Mills predicted the initiative will stimulate new thinking and open people’s eyes throughout Maine.

“Normal citizens will be thinking about how we can do things differently, and better, and uplift the communities,” she said.

The challenge is backed by private sector funders, $2.7 million in contributions from local and national philanthropy, federal grants, and $300,000 over three years from Mills’ administration.

Teams from all 16 Maine counties are invited to apply for funding to address specific economic issues that affect lower income residents.

Boston Fed President Eric Rosengren said Maine is in better position than many places to rebound economically because its low infection rates shows it’s handled COVID-19 well. Moody’s Analytics recently estimated Maine’s economy is 93% “back to normal,” highest in the nation. But Rosengren added many challenges remain, and the Working Communities Challenge can help meet them.

“I really think that this is an opportunity for Maine’s spirit and community to come together in what is a very trying time for everybody to really tell a good news story over time,” he said.

Initiative calls on Maine residents to connect and collaborate across interests and regions

The Working Communities Challenge is an outgrowth of the Working Cities Challenge, which the Boston Fed started in 2013 in Massachusetts. Both are now under the Working Places umbrella.

The impetus for the original initiative was Boston Fed research that showed that small, post-industrial cities that recovered best from prolonged downturns all had leaders from the private, public, and nonprofits sectors who were united around one vision. That became the model of the Working Cities Challenge.

The challenge grew to 12 cities in southern New England. Then, it expanded to Vermont last year as the Working Communities Challenge, which is designed to serve the needs of northern New England’s smaller cities and towns.

In Maine, the initiative enters a state with momentum from its highly regarded handling of the pandemic, which state leaders believe has increased its appeal as a place to live. But the state is also dealing with persistent challenges, including an aging population and shrinking workforce. In the last 10 years alone, the percentage of retirement-age residents has risen 35%. Meanwhile, the school aged population declined in every county between 2017 and 2020.

The state is also racially homogeneous, as 94.4% of the population is white. But the Black population grew 39% between 2010 and 2019, and the growth of the populations of people of color in communities around the state has created new dynamics and opportunities in many communities.

In addition, Maine has a vast and varied geography that comes with cultural, political, and social distinctions. For example, the more densely populated pockets south near Portland have different priorities and concerns than wild and rural areas to the north.

Leaders say they believe Maine’s evolving communities can connect and collaborate through the Working Communities Challenge.

Amber Lambke, owner of the Skowhegan-based organic grains providers, Maine Grains, said people in Maine’s rural areas are used to bridging divides and working together, because that’s often the only way things get done in small towns.

“We are doers, we work with our hands,” said Lambke, a member of initiative’s steering committee. “We know how to build the spaces for discourse because we know we must engage each other to move forward.”

All applications must include “priority communities,” where poverty is higher

Every town in Maine can apply for the initiative, and multiple communities can collaborate to represent a region. One condition is that all applications must include a designated “priority community.” This is a list of 75 towns and cities, as well Native American tribal communities, where the poverty rate is 12% or greater.

After the initial applications, eight teams will be selected for the “design phase,” when they will be given funds to strengthen their team, engage a broader community, and draw up a specific plan to achieve their objectives. From there, up to five teams will be chosen to receive full funding to implement their ideas.

Mills noted that though Maine has weathered the pandemic relatively well, it’s still down more than 50,000 jobs since February. Leaders from all sectors and communities must collaborate for the state to get fully back on track, and the Working Cities Challenge can be a big part of it, Mills said.

“Maine will rise a stronger state, with the help of the Working Communities challenge,” she said.