Rural Community Endowments – Is this a Resource for Your Future?

1. Rural Community Endowments – Is this a Resource for Your Future? Sara Miller and Lisa Dawson Northeast Oregon Economic Development District

2. Community Endowment • An endowment is a permanent fund whose assets are invested to generate income every year forever to be used by the beneficiary • Use portion of earnings each year to support priority community projects • Gifting of assets, especially appreciated assets, is the focus

3. Community Endowment • Way to raise funds in land-rich, cash-poor rural economies where traditional urban income-based fundraising strategies are not as successful • Estate planning and inclusion of the endowment within estate plans is essential

4. Wallowa County Community Endowment

5. A Critical Opportunity for Rural Communities • Largest Ever Transfer of Wealth • $41 Trillion in the US by 2055 • Encourage Estate Giving to Communities • Up to 55% Federal Estate Tax Rate • Urgency – Aging Rural Population • Many rural counties have 25% or greater 65+

7. Assess Potential for Wealth Transfer in Your County • Rough Population Based Estimate from Hometown Competitiveness Model • Multiply County Population X $25,000 • Result is Estimate of Amount of Wealth to be Transferred in the Next 10 Years • Estimate % of Wealth Transfer to Capture in Endowment

8. Example & Payout Example: Wallowa County Population 7,000 x $25,000 = $175,000,000 Goal $175,000,000 X .03 = $5,250,000 Annual Payout: Payout of Endowment at OCF is currently 4.5% $5,250,000 X 4.5% = $236,250 per year to spend on priority projects

9. Oregon County Population 2010

10. Endowment Growth • Endowment will continue to grow because some earnings will be returned to principal each year. • Example • Without any additional donations, in 30 years • $1,000,000 fund will grow to $1,041,338 • Total investment earnings $1,773,351 • Total payout for community projects $1,455,677 • Total management fees $276,337

11. Strategic Grant-Making Principals • Create impact • Create leverage • Fund sustainable activities • Enhance community quality of life • Enhance overall community economic prosperity • Create positive change • Build belief in the future of your town

12. Strategic Grant-Making Examples • Non-traditional scholarships • Post-high school, college and trades • Adult residents who want to stay and youth who want to return • Skills needed in community, such as health care, technology, etc. • Entrepreneurship programs • Small businesses create most jobs • Training, technical assistance, loans

13. Strategic Grant-Making Examples • Leadership development • Skills and connections to community needs • Hands on project implementation • Value-Added K-12 Education • Expanded programming, special curriculum, entrepreneurship • Connecting teachers and students to their place/communities

14. Community Priorities Exercise • Write down top three priority issues that are facing your community. • Are there organizations working on these issues? • Examples of projects that could impact these issues

15. Wallowa County Example • Shared vision of more young people and families staying in or coming back to the area • Barrier of insufficient economic opportunities • Limited financial resources for economic and community development • Local ideas and energy, need financial resources to implement them

16. Wallowa County Vision and Goals • Mission • To create a community fund to support projects and activities in Wallowa County • Vision • To develop, improve, maintain, nurture and sustain Wallowa County’s economy, heritage and rural lifestyle • Goals • $50,000 by end of 2011 • $5,250,000 by 2021

17. The Affiliated Fund • The Wallowa Fund set up with Oregon Community Foundation (OCF) • No need to form a new 501(c)(3) organization • Takes advantage of experience and expertise of OCF • OCF invests fund $ and manages donor information • Good investment returns, low management cost • Provides tax-donation benefits for donors • Local advisory board makes funding recommendations for grants to qualified organizations

18. Wallowa County Timeline 2004 Research, Hometown Competitiveness Training 2005 Feasibility and Wealth Transfer Analysis 2006-09 Community and OCF conversations Ford Institute Leadership Program 2010 Public Input Sessions Formation of Local Advisory Committee 2011 Fund declaration with OCF; Advisory Committee training, community outreach, silent fundraising

19. Community Input – Sample Process • What attracted you to your community and keeps you committed to living there? • Think about a time when you felt the most committed to and proud of your community • Share your story with a partner

20. Community Input – Sample Process • Name three dreams, hopes or goals you have for your community. These can be long term, more “Big Idea” type goals, or short term, more concrete goals. • Name one reason for optimism that these goals can come true • Any themes in your small group?

21. Forming an Advisory Committee • Identify Diversity of Team Players • Requirements • passionate about community • willingness to interact with the public • willingness to engage donors • commitment to make a personal donation • Demographics • age, income, occupation, background, education • Roles • Starters, managers, influencers, sponsors, fans

22. Fund Advisory Committee Roles • Starters • Visionary, not intimidated about being in the first string • Willing to learn, ready to motivate each other • Want to get out there and make the first play • Managers • Detail oriented • See the big picture and potential plays to get there • Willing to ask hard questions • Influencers • Well connected and networked • Respected and listened to

23. Fund Advisory Committee Roles • Sponsors • Want recognition • Make financial contributions • Fans • Want to be part of the team without taking on lead role • Provide encouragement, “Go team!” • Spread the word, help at events • Make financial contributions, share names and contacts

24. Wallowa Fund Advisory Committee • Call for applications • Recruit for diversity • Form initial committee • Continue efforts to add diversity and skills • Video – Perspective of the Committee Chair

25. Stakeholder Analysis Exercise • Who will influence the success of the endowment fund? • Who will be affected by having endowment fund? • Media, elected officials, youth, local industries and businesses, economic development groups, industry leaders, educators, retirees, school, churches, social services, health care

26. Steps Toward Building an Endowment • Learn more about endowments and how they are funded • Hold public sessions to educate others and involve media • Identify community priorities • Key people on board and form Advisory Committee • Influencers, Leaders, Donors

27. Steps Toward Building an Endowment • Education and training for Advisory Committee • How the fund works, goal setting, how to fundraise • Materials and messaging • Gifts by Committee Members and founding donors • Outreach and awareness • Make personal contacts, visit local groups, build relationships, more public outreach, accept gifts, communicate results

28. Cycle of Endowment Building

29. Philanthropy We can’t make anybody do anything. We can only: • Motivate and inspire • Provide role models/examples • Be wise and prudent stewards • Ask for contributions

30. Optimism • Video – What an endowment could do in my community

31. Thank You! • Lisa Dawson & Sara Miller • Northeast Oregon Economic Development District • 541-426-3598 • lisadawson@neoedd.org, saramiller@neoedd.org • Oregon Community Foundation • www.oregoncf.org • 503.227.6846