The Opportunity

Only a small portion of grant-making foundations focus on rural areas generally or on rural development specifically.[1]  To address this gap in rural philanthropy, some communities have set out to build their own philanthropic base. The opportunity is available even in North Carolina’s distressed rural communities, where a North Carolina Rural Center (hereinafter Rural Center) report found that North Carolina’s rural residents donate a higher percentage of their income for philanthropic purposes than urban residents, and that residents of North Carolina’s most distressed rural counties give a greater percentage of their incomes than those from wealthier counties.[2] The potential for local philanthropy will be enormous over the coming decades, as one team of researchers estimated that $41 trillion of wealth will transfer from one generation to another over the next 50 years.[3]

The monetary benefits are only part of the equation. In interviews for this publication, organizers of community philanthropy efforts reported that their communities benefited not only from the additional financial capital secured for the community’s future, but also from less tangible benefits such as fostering community engagement and energizing citizens around community and economic development initiatives.

How the Tactic Is Applied

• Establish permanent local endowments
• Establish a regional foundation

Establish Permanent Local Endowments

Montana Community Foundation (Montana)
North Carolina Community Foundation (North Carolina)
Nebraska Community Foundation (Nebraska)

A local endowment is a permanent fund that generates a constant stream of income through investments.  The endowment’s earnings are then distributed throughout the community at regular intervals, often in the form of grants, according to the priorities of the community or criteria established for the endowment. Outside expertise may be required in order to establish and manage a local endowment in small, rural communities. The Montana Community Foundation (MCF) provides that expertise to its statewide network of affiliated local endowments and foundations. MCF’s affiliate network was launched as a pilot program in 1994 to demonstrate that small, rural communities could indeed build and benefit from local permanent endowments.  MCF works with more than 40 rural communities to build local community foundations or endowments.  The local endowments are affiliated with and managed by MCF, and MCF provides grants to communities starting and growing their foundations or endowments.[4]  By the end of 2006, the balance total for all affiliated local community foundations was more than $3 million, with over $280,000 available annually for local grant awards.[5]  The North Carolina Community Foundation performs a comparable technical assistance role for a number of rural foundations in North Carolina.

The Nebraska Community Foundation (NCF) has taken a similar approach, but with a specific goal in mind. Springing from the aforementioned research finding that $41 trillion in wealth will be transferred nationally from one generation to another over the next 50 years,[6] NCF performed its own analysis of wealth transfer in rural Nebraska and discovered that rural Nebraskans would transfer $94 billion from one generation to the next over the same period.[7] NCF therefore set out to assist local leaders with establishing and building permanent endowments in their communities, but NCF challenged each community to raise 5% of the community’s transfer of wealth over one decade and preserve it in its local endowment. As of 2008, six communities had achieved this goal.[8]

Establish a Regional Foundation

Black Belt Community Foundation (Alabama)

Rather than establishing local community foundations that are focused on one particular town or county, rural communities can collaborate to establish a regional community foundation that serves regional needs.  This approach is particularly appealing to rural communities that are not capable of supporting a community foundation or endowment on their own—a regional foundation may provide the scale needed for sustainment.  A regional foundation may face challenges, however, being responsive to a larger regional area.

The Black Belt Community Foundation (BBCF)—serving twelve counties in Alabama with a total population of only 222,000 and with 33% of its residents in poverty—addressed precisely this challenge through three mechanisms. First, with financial support from the Ford Foundation, a founder’s committee spent a year holding more than 20 community meetings throughout the region in order to gauge public support for the initiative.[9] Second, after the foundation was established, an intentionally diverse board of directors was constituted to represent both regional power brokers as well as more locally-oriented community leaders.[10] Third, the foundation established a network of volunteers, called “Community Associates,” who represent a single county and are expected to fundraise, serve on committees, and build support there.[11]

BBCF has established several grant programs that are sourced from large or institutional donors who have placed restrictions on use of those donations, but the majority of the funds used for BBCF’s grant awards have come from small donations, often in amounts of $100 or less.[12]  With these unrestricted funds from small donors, BBCF has more flexibility to respond to the needs of the communities it serves. The executive director credits the Community Associates program for the success with small donors.[13]

Learn More

Felecia Jones
Executive Director
Black Belt Community Foundation
Selma, AL
334-874-1126

fjones@blackbeltfound.org

http://blackbeltfound.org/

On the Internet

North Carolina Rural Economic Development Center, Funding Our Rural Future http://www.ncruralcenter.org/images/PDFs/rc_philanthropy_report_12-2.pdf

Millionaires and the Millennium: New Estimates of the Forthcoming Transfer of Wealth and the Prospects for a Golden Age of Philanthropy
http://www.bc.edu/research/cwp/meta-elements/pdf/m_m.pdf

North Carolina Community Foundation
http://www.nccommunityfoundation.org/