May 1, 2011 | Read Time: 4 minutes
I grew up in Wisconsin, so I can tell you one truth about rural America: Timing is everything. Whether it’s planting or harvesting, if you get the timing wrong, you can lose it all. Philanthropy is in dangerof missing out on a timing opportunity in rural America, where the peak transfer of wealth will occur in the coming years.
In much of rural America, we’re doing virtually nothing to capture even a small part of this for philanthropy. It’s no one’s fault, really. Philanthropy simply lacks the voices to speak about its potential in rural America—to tell families the difference they can make in their communities by converting part of their estates into local philanthropic gifts.
In my home state, a transfer-of-wealth study commissioned by the Donors Forum of Wisconsin estimates a transfer of $687-billion from one generation to the next by 2050. Unfortunately, much of this wealth is leaving as many residents move out of rural areas.
In Trempealeau, my family’s home county, many residents are farmers and small-business owners, and their annual incomes are below the state average. Still, the transfer-of-wealth study estimates county residents will transfer $2.16-billion to the next generation by 2050. If just 5 percent of this money was given to philanthropy, that could create a countywide endowment of $108-million for new resources to support special projects and other needs. In Montana, a similar study projects that $8.8-billion of wealth will have been transferred from 2007 to 2016. If just 5 percent of that amount was set aside for community philanthropy in the state—and assuming all foundations distributed the minimum 5 percent of net assets required by federal law—it would mean $22-million a year to support charitable causes.
We have right in front of us an incredible opportunity to build rural America’s future. But it’s passing us by because we don’t have a system in place to communicate about, and to capture for philanthropy, a small part of these assets being transferred from one generation to the next.
We can make up for lost ground, however. Here are four simple ways to do that:
Expand philanthropy’s partnership with the federal government into rural America.
Over the past two years, the Obama administration has reached out to philanthropy to create a new generation of partnerships at the federal level.
Examples include the Green and Healthy Homes Initiative, Investing in Innovation and Race to the Top education funds, and the Social Innovation Fund. In every case, the federal government has asked foundations and other private donors to match government dollars in ways that will enhance innovation in housing, education, or other vital services.
It is time for the federal government to forge the same kinds of partnerships in rural America.
One important way to do that is through the Rural Philanthropy Growth Act. The proposed legislation, which is likely to be introduced in Congress this spring, would boost revitalization efforts in rural communities.
It would also ask private donors to match existing federal funds to provide grants to community foundations, which would then invest those resources in economically troubled rural areas.
Provide legal, management, and other advice needed to create one or more community foundations in every rural county in America.
The Council on Foundations, the 35 regional associations of grant makers, and the nation’s community foundations are committed to doing whatever we can, in partnership with one another and with others, to reach this goal.
Reach out to lawyers in rural America.
The legal experts who handle everything from estate planning and wills to legal transactions related to property transfers or small-business creation need to learn about philanthropy. Not enough of them have been given the information on philanthropy’s potential to change the future of their communities.
Sadly, when rural America’s parents or grandparents sit down to make their wills, conversations about a potential gift to the local community foundation seldom occur.
Recruit advocates to promote the value of philanthropy throughout rural America.
Perhaps county development agents could gather a series of community meetings. Rural America is good at these educational events. They cover virtually every subject, such as designing the community’s annual celebration, building a new community library, and improving the quality of the local schools.
The Department of Agriculture’s budget proposal for 2012 seeks to give priority to investments in rural America that focus on the “unique needs of rural farm and nonfarm communities.”
Philanthropy stands ready to collaborate with the Department of Agriculture and others in an effort to help create thriving rural communities. To accomplish this, we need to educate rural America’s residents about the value and benefits of investing in philanthropy today to better serve the citizens of tomorrow.
If we don’t do that now, it will be like missing planting time so nothing is ready to harvest—and we will have lost opportunities for generations to come.
