Build a Rural Community Endowment Fund

 The Basic Idea:

Build a permanent pool of locally-controlled philanthropic resources to help rural communities and families by soliciting charitable contributions in the community and beyond.

How it works:

• A diverse group of local leaders commits time and money to start a community endowment fund.

• Often, a wealthy individual or business offers an initial matching grant – to get the fund started and encourage others to give.

• Funds usually come from many small and mid-sized gifts rather than from a few wealthy donors (which is more common in urban communities).

• Community institutions that provide families with essential services – such as nonprofits, schools and churches – can set up funds designated for their organization or its efforts

• Individuals, families or groups can set up funds for specific or community-wide use.

• Sometimes funds focus on capturing part of the huge “transfer of wealth” between generations currently occurring. In rural areas, this often means soliciting and accepting a gift of land that was part of a person’s estate.

• Often, funds begin as an “affiliate” of an existing community foundation, saving overhead costs and benefiting the management, investment, and grantmaking expertise. Other times, funds are set up as freestanding community foundations.

Who Does It?

• Rural communities across the U.S., including those that are small and/or on the economic margins
• Volunteers and donors from all walks of life, and asset and income levels
• Larger private, family or corporate foundations often help match promising rural funds.

Pros

• It provides a permanent stable source of resources to boost rural economies and rural families’ success.
• It builds on rural characteristics of pride and self-sufficiency.
• It provides a double benefit by building community capacity while also building assets.
• It captures the immense property wealth and other assets that otherwise will transfer out of rural communities forever as the current generation passes on.

Cons

• Just as with family savings, this usually takes a while to start up before there are big gains.

Simplicity Index

• Tapping Into Rural Wealth. Endowment funds make use of connections with individual and corporate donors to pool resources that can be used to grow a community’s assets. Local control of those resources enables community residents and representatives to decide which programs and services receive that funding support. 

Examples and Resources

Community Foundation of East Central Florida (formally P3 Community Foundation) is building a community endowment to support low-income families in rural Florida. To read more about their efforts, see the Annie E. Casey Foundation brief – “P3 Community Foundation: Building a Community Coalition to Advance Rural Family Economic Success,”on Casey’s website.

West Central Initiative (WCI) created a large endowment to build the economy and support low-income families in rural Minnesota. Find out more at http://www.wcif.org. Their work is also profiled in the Annie E. Casey Foundation publication – “By the Numbers: Using Data to Drive Action on Behalf of Children and Families”. Read it here.

Nebraska Community Foundation pioneered a state transfer of wealth study focused on rural areas and offers many adaptable tools and resources to build rural endowments. www.nebcommfound.org.

Rural Development Philanthropy Learning Network, assembled by The Aspen Institute Community Strategies Group, includes tools, ideas and community foundations that support rural communities building endowments to improve the economic success of their families and communities. www.aspencsg.org/rdp.