I completely do away with the standard backgrounds for each culture. Not just the stories, but also the arrays of stats and traits. I allow my players to allocate their stats as they see fit, so long as the end result adds up to fourteen, and all stats are between two and seven. Likewise, I just ask my players to make up their own distinctive features. The ones in the books are used often, because the book covers a lot of common features, but to tie them to certain backgrounds seems unnecessarily restrictive.
While I understand that the arrays of stats are used for balance purposes (a dwarf with seven Heart would be hard to fell indeed), it just doesn't make much sense to me from a story perspective. Who's to say we can't have a hearty dwarf, or a woodman with a strong body? Every point in one stat means that character is weaker in some other meaningful way, and if a truly skilled minmaxer makes a game-breaking character, you have the power to correct for that as the LM.
Additionally, I allow my players to take Rewards (and occasionally Virtues) from other cultures. It seems odd to me that a hobbit can leave the comfort of the Shire, go gallivanting about Mirkwood for years on end, and only earn Rewards that can be found back home. I allow players to take Rewards from their own culture, as well as from other cultures if they have done something to directly benefit that other culture's peoples. Why would a Barding get a Tower Shield for saving Woodman-Town from a horde of orcs? Might the woodmen offer that Barding a Bearded Axe? And if a Dwarf ends up spending years of his life in Dale, I might allow that Dwarf to take the Swordmaster trait. I am much more discretionary in the Virtues department, though.
Again, balance could be an issue if you're allowed to take Rewards and Virtues from various cultures, but I'd rather see my players enjoy a more organic and free story, and just correct for balance in my encounters, than to shoehorn them into pre-balanced roles.
Sorry if that got a little ranty. I do really like this game, this particular bit just baffles me a bit. Any feedback or house rules with similar motivation/theme would be appreciated!
