Coalition Helps Southeastern Groups Uncover Their Hidden Assets

By ELIZABETH GREENE

Endowments have not caught on in the rural Southeast, and yet few parts of the country have a greater need for a permanent pool of money for local charity.

But a new coalition has plans to educate potential donors about philanthropy and local

activists about the undiscovered assets that may be available in their own back yards.

“People are already generous in poor communities,” says George D. Penick, president of the Foundation for the Mid South, a Jackson, Miss., charity that makes grants in Arkansas, Louisiana, and Mississippi. “The issue is how do you create structures that support philanthropy?”

Mr. Penick’s fund is working with the Southeastern Council of Foundations, an Atlanta group, and the Southern Rural Development Initiative, in Raleigh, N.C., to help communities figure that out. As the Southern Philanthropy Consortium, the three groups received a three-year grant of $300,000 from New Ventures in Philanthropy, a project of the Forum of Regional Associations of Grantmakers that is trying to stimulate giving. The consortium has also raised more than $100,000 from local and national donors.

Persistent Poverty

Attracting charitable dollars in the rural Southeast, especially in poor counties, is no easy task. Persistently poor rural counties in the 12 states that make up the Southeast have 11 percent of the region’s population but only 1 percent of its philanthropic assets, according to a study by the Southern Rural Development Initiative.

Martin C. Lehfeldt, president of the Southeastern Council, believes that more foundations are necessary to help stimulate nonprofit activity in the region. But developing effective philanthropies is difficult to do in a part of the country that is still divided by race and class, says Mr. Penick.

“In the rural areas, if you’re wealthy, you are white; if you’re poor, you’re black,” says Mr. Penick. “So if you are going to build philanthropy in rural areas, you either have to find white people of wealth who do want the system to change, or you have to work with nontraditional sources of leadership.”

Educating such sources of leadership, like churches and community groups, which can be powerful philanthropic forces if they act strategically, is one of the keys to the consortium’s efforts. The other is educating individuals and their advisers.

A giving guide for rural donors and their financial and legal advisers will be published early next year. It covers how to set up a foundation and other basic information for donors, but it also helps readers see how property like land, timber, and mineral rights can be converted into assets that generate income for charities.

In addition to the guide, the group is developing a “Philanthropic Index” to help groups and community leaders figure out the prospects for generating endowments for their counties.

The underlying assumption, described in a workbook about the index, is that even poor communities have more assets than local activists and donors realize, and that armed with more information about their counties they can begin the process of finding new donors and providing them with information such as the giving guide.

While it may change considerably over the next few months, today the index comprises 16 indicators that point to the pool of available wealth in a community for increasing philanthropy. Information on the income and assets of people in a county, among other things, will be culled from government and private sources.

Four of the indicators make up a county’s “base line”: lists of all the foundations and nonprofit groups, current population figures, and the number of households with above-average income in a county.

The next five factors are considered “trend indicators.” They include an account of changes in four areas: population, labor-force stability, gross median income, and income from such “financial instruments” as dividends, interest, rent, and royalties. Information about emerging and dominant economic sectors — agriculture and transportation, perhaps — would also be included.

The rest, called “snapshot data,” involve individuals with an adjusted gross income of more than $50,000, sorted several ways, including by ZIP code; the presence of commercial farms; other income from enterprises owned by the individuals in a household; inheritance taxes paid; retirement income; and the number of families who have the discretionary wealth to contribute to an endowment-building effort.

Says Mr. Lehfeldt: “We’re trying to take a positive approach, rather than going into a community and saying, ‘Here are all the negative aspects and here are the difficulties you’re going to have.’”