I get asked frequently, “Why are you trying to save these small towns?” The answer is – I’m not. The only folks who can save a community or change a community are the people who live, work and sleep there.
I grew up on a farm near Red Cloud, Nebraska, the youngest of six children. My parents and two sisters still live there. I graduated from high school in 1986 with 23 classmates. Then, like many other small-town kids, I left.
I followed my five older siblings to the University of Nebraska in Lincoln, earned a B.S. in economics and agricultural business. Before joining the Nebraska Community Foundation in 1998, I spent several years working for then-Nebraska Governor Ben Nelson as a gubernatorial aide and strategic initiative manager for community and economic development. It was important work, but frustrating as well.
Politics is a zero-sum game. I prefer win-win solutions to community challenges. And that’s why I am such a strong advocate for rural development philanthropy.
Rural giving and the transfer of wealth
Right now, rural places have an unprecedented opportunity to transform their communities by harnessing the massive transfer of intergenerational wealth. In 2011, the Nebraska Community Foundation worked with the RUPRI Center for Rural Entrepreneurship (CRE) to update its original Transfer of Wealth Study conducted in 2002. That study was the nation’s first statewide county-by-county analysis. This groundbreaking work changed the mindset of philanthropic leaders across the country. Since then CRE has conducted numerous studies on cities, regions and states all around the U.S.
New scenarios for the transfer of wealth opportunity in the U.S. for the period of 2010 through 2060 range from a high of $91 trillion to a low of $43 trillion. The CRE’s most likely scenario estimates $75 trillion. This wealth may be held in real estate, securities, retirement accounts and other assets.
If we set a charitable giving goal of just 5 percent, nearly $3.8 trillion in new community endowments could be built over the next five decades. Once fully capitalized, these endowments could generate nearly $200 billion annually in new grant making! With the decline in local government spending, philanthropic assets could prove to be a community’s most reliable source of funding in the future.
The transfer of wealth is of critical importance to rural places that continue to experience outmigration. In Nebraska, more than 70 percent of our 534 communities lost population in the last decade, according to the 2010 Census.
A local example
For generations, frugal Nebraskans worked hard and saved money for the future. Most lived their entire lives close to their birthplace. One family might occupy the same property, even the same home, for multiple generations. As we are well aware, this is no longer the case.
Over the next 50 years, our state will experience the largest intergenerational transfer of wealth in its history. The World War II and the Baby Boom generations own more private wealth than at any time: more than $600 billion in Nebraska.
Some of this wealth will go to taxes. Most will go to heirs. Due to outmigration, many of those heirs no longer live where the wealth was built, and may no longer feel connected to those places. Once intergenerational wealth leaves our communities, it is likely gone forever. However, if it is endowed in community funds, it stays in the community forever, with the earnings available each and every year for emerging needs and opportunities.
The exigent issue for Nebraska and other Great Plains states is timing.
In more than half of Nebraska’s 93 counties, the peak years for wealth transfer are happening now or in the next 10 years.
|Andy Anderson of McCook, NE has established an endowment |
through NCF to support youth entrepreneurship in his hometown.
That is why we are working so hard to promote and facilitate philanthropy in more than 200 communities across the state. We must act now to encourage charitable investment in the future of our hometowns while the window of opportunity is still open. We must teach, encourage and inspire our citizens to give back today, and include their community in their estate plans for tomorrow.
If only a small portion of our wealth transfer – just 5 percent – were given back through charitable gifts and endowed in community funds, Nebraska would have more than $30 billion within 50 years, generating millions of dollars each year to invest in hometowns where young families can prosper.
The Nebraska Community Foundation
The Nebraska Community Foundation (NCF) is helping people across the state achieve this vision.
Ten years ago, 51 communities were building endowments through NCF with total assets of $4.6 million. Today there are 121 with nearly $40 million endowed. Another $43 million in planned gifts will benefit Nebraska’s communities and organizations in the future.
These communities range in size and geography. What they share in common is local leadership committed to building a future for their hometown.
The Nebraska Community Foundation envisions our state as a place where people can reach their highest potential. Where we can live and work close to family and friends and still stay connected to the world. NCF affiliated funds are using their endowment earnings for grants that make this possible:
- Non-traditional scholarships for adults working in the community
- High-quality affordable childcare to help working parents
- Small business development and transition
- Leadership development and volunteer training
- Value-added curriculum for K-12 schools
- High-quality, accessible health care
- Facilities and programs to help our seniors to age in place
- Arts, recreation and public safety to make our communities places where young families can thrive
Harnessing 5 percent of the transfer of wealth for the future of our rural places is a reasonable, achievable goal!
For more information about NCF and community giving, visit www.NebraskaHometown.org or check out their videos on YouTube. Join the discussion on Facebook, too!
Visit the Rural Futures Lab homepage here.
Photos provided by the author.