Groups Explore Ways to Help People Left in Poverty by N.D. Oil Boom

To kick-start philanthropy in a region transformed by an oil-mining boom, several business, charity, and political leaders here have discussed forming their own community foundation. Western North Dakota, overwhelmed by a flood of workers and the needs of a booming population, has suffered from the lack of charitable services in recent years.

But the talks to change that, begun last year, have yet to bear fruit.

In late July, the Bush Foundation made a grant to two North Dakota community foundations, one in Fargo and another in Minot, to investigate the need for philanthropy in Williston and eight other towns at the heart of the new energy economy.

This summer, community fund officials met with residents to assess the needs in those towns. They followed up by sending surveys to local charities to gauge their budgets, the sizes of their staffs, the number of people they serve, and how many they turn away. Officials leading the effort say they are laying the groundwork for new grant makers.

“Everybody talks about how bad it is in western Dakota, but nobody has the numbers you need to make decisions about how to improve things,” says Megan Laudenschlager, finance and program director at the Minot Area Community Foundation.

Ms. Laudenschlager will use part of the $85,000 she was awarded as a Bush Foundation fellow to learn more about the region’s charitable landscape.

“We’re creating a database for nonprofits, so they can make their case to foundations,” she says. Cities will also have the information available to make their decisions about forming community foundations.

That effort, coupled with a recently enacted state tax credit for endowment gifts, could go a long way toward giving charities a fighting chance against the tidal wave of human need, Ms. Laudenschlager says.
The region has been overwhelmed with a host of problems, including homelessness, domestic violence, and substance abuse, which are side effects of the influx of newcomers brought by the oil boom.

Some researchers say those efforts may not be enough, given the breakneck pace of economic development and the need to protect the region from the impact of the oil industry—and to plan for the day when the wells run dry.

“The solution for charities has to be much bigger than that,” says Don Macke, co-director of the Center for Rural Entrepreneurship, which works to identify wealth in backwater areas that can be used to reinvigorate local economies and to spur philanthropy. “The scale of the oil development when compared to the capacity of the communities to deal with it is just too much.”

Mr. Macke’s group has proposed the development of a new state fund based on energy taxes—a so-called regional legacy trust—that would return a small portion of the region’s oil wealth to localities like Williston. Although North Dakota has set aside billions from oil taxes in a legacy fund that can be tapped starting in 2017 to deal with the impact of the oil industry, a second fund could help prepare oil-boom towns for the future, Mr. Macke says.

“If we take just 1 percent and place it in a long-term trust fund, then we could collect as much as $10-billion for local areas,” he adds.
If those areas were to collectively tap the fund at a 5-percent rate each year, they would have a total of $500-million at their disposal to plan for new kinds of businesses and improve the region’s infrastructure and livability. Philanthropists could donate to the fund, which would also be designed to help local charities meet the needs of a larger population.

Without some kind of long-term public plan with considerable government involvement, however, charities will remain in crisis, Mr. Macke says.

“I don’t think you can grow yourself out of this in any traditional way. You need to treat it as you would a natural disaster. You need to bring in professionals with experience to handle it. You need extra money. This isn’t a normal situation that philanthropy can handle on its own.”