(C) Daily Yonder - Keep it Rural This story was originally published by Daily Yonder - Keep it Rural and is unaltered. . . . . . . . . . . Small-Town Philanthropies Banking on Great Wealth Transfer [1] ['Sarah Melotte', 'The Daily Yonder', '.Wp-Block-Co-Authors-Plus-Coauthors.Is-Layout-Flow', 'Class', 'Wp-Block-Co-Authors-Plus', 'Display Inline', '.Wp-Block-Co-Authors-Plus-Avatar', 'Where Img', 'Height Auto Max-Width', 'Vertical-Align Bottom .Wp-Block-Co-Authors-Plus-Coauthors.Is-Layout-Flow .Wp-Block-Co-Authors-Plus-Avatar'] Date: 2024-06-27 In the next 20 years, about $84 trillion will change hands from one generation to the next, and small-town philanthropies hope to capture some of that wealth for the benefit of historically underfunded rural communities. Economists call it the Great Wealth Transfer. Although some experts worry the transfer might reinforce economic inequality if this fortune flows only to individual heirs, rural philanthropists are thinking about how people might invest this money to create healthier communities. “You can get your cup under this wealth that potentially is going to be transferred, and pour it back into your town and bring that wealth here,” said Ben Winchester, a rural sociologist with the University of Minnesota Extension. Winchester conducts studies on rural economics and demographic changes. One topic he’s investigating through data-driven research is how to help rural communities find ways to reinvest capital from the Great Wealth Transfer, particularly for populations that he says have been historically unable to take advantage of that wealth, like some rural communities. He recently released a report on the Great Wealth Transfer in rural Minnesota funded by Community Giving through a grant from the Blandin Foundation. The report found that in the coming decade, $5.6 billion will change hands across 10 central Minnesota counties. If local foundations could capture even one percent of that transfer, it could funnel $56 million into local infrastructure. Community Foundations Create Economic Opportunity Through the Great Wealth Transfer “We like to say a community foundation helps generous people change lives in communities,” said Steve Joul, president of Community Giving, a philanthropic organization in Minnesota. “We’re an interactive platform on which others act to make good things happen for [their] community.” Foundations like Community Giving are tax exempt nonprofit organizations that fund projects and infrastructure within a specific geographic area. Joul said Community Giving is working on redirecting money from the Great Wealth Transfer by reminding people that even a seemingly small gift allocated in a will to a local foundation can make a big difference. Valerie Martin, advocacy consultant for the Blandin Foundation, a philanthropy in Minnesota that funds rural projects, said rural communities are uniquely positioned to benefit from the Great Wealth Transfer because a little bit of money can go a long way. “There’s an outsized impact [in small towns],” Martin said. “And people really feel connected to that. That’s one of the unique characteristics and opportunities there.” Under the larger umbrella of Community Giving, where Joul works, are smaller cohorts of community foundations across Minnesota. Those individual foundations work at the ground level to empower local communities to make a difference by funding their projects. “A community foundation doesn’t have to do everything,” Joul said. “They’re a platform. They’re a participant. Sometimes they’re a catalyst, but we are the place where the community comes together.” Joul said that a school district in the small town of Paynesville, Minnesota, devised a creative idea to encourage kids to stay in town after graduating high school. They developed a program to educate high school students about vocational careers in Paynesville so they knew some options for long-term employment. With help from Community Giving, Paynesville public schools now offer vocational training focused on jobs available in the area. They even got a levy referendum passed to add a new school building for career training. Community Giving also has a branch that focuses exclusively on gifts and transactions related to real estate. Joul said they’re increasingly trying to get residents to think about what assets other than financial ones that they might contribute to the community. “Sometimes it might be that lake cabin that nobody uses. It might be that extra other piece of land,” Joul said. “Our board chair grew up on a family farm and he really wants us to put greater emphasis on talking about farmland because Minnesota in particular has some very expensive land and there's tremendous opportunity in land.” Philanthropic Funds Are Not Always Equally Distributed Philanthropic work is especially important for rural communities, since they’ve often been left out of larger sources of both private and public funding. “Much of this wealth we are measuring today is the result of programs and policies that allowed certain portions of the population to benefit from that growth of wealth over the past 250 years,” Winchester said. He used the example of redlining, the historic (and now illegal) process of denying credit to residents of predominantly Black neighborhoods, as an illustration of how wealth inequality can have intergenerational consequences. The systemic racism that denied equitable housing to Black Americans led to segregation and economic hardship, as many Black families couldn’t build generational wealth through homeownership. “I want to talk about recapturing this wealth, growing wealth with populations that have never had a chance to grow wealth before.” Winchester said. Many rural economies also suffer from long-term lack of investment. As a result, residents of nonmetropolitan counties are more likely to live in communities with persistent poverty. A county is designated as having persistent poverty when the poverty rate is 20% or higher for at least three decades. The majority of those residents are rural people of color. But despite greater economic need, only 7% of funds from the top 1,200 foundations go to rural places, even though rural people comprise 20% of the American population. “I think those numbers tell a big story,” said Executive Director Erin Borla of the Roundhouse Foundation, a rural philanthropy in Oregon. Borla said that the local wealth that is generated in a rural community can end up redirected to other economies throughout the country as people move away. “If you’re from a farming community, or a logging family or whatever the rural livelihood was, does the next generation [who controls that wealth] live in that same community?” Borla asked. Small-town foundations are aware of this trend, according to Borla, which is why they’re focused on directing those funds back into local projects. Rural Residents Create New Visions One of the first steps to creating community-wide change is envisioning a new future, according to the funders at Community Giving. “In order for visioning work to really work, you need to have all the players at the table,” Joul said. “It’s an open invitation to the community to come to the table to then craft an idea and vision for where you want to go.” Joul said sometimes community foundations play that role of bringing everyone together to brainstorm, but local chambers of commerce and other agencies can also fill that niche. Regardless of who initiates the community visioning work, Joul emphasized the importance of avoiding the common trap of only including residents with power and resources. Engaging more stakeholders helps mitigate worsening wealth inequality. Kyle Erickson, director of rural grantmaking at Minnesota’s Blandin Foundation, said it’s also important that community leaders don’t get residents too excited for a project that they don’t have the funds to cover. “That can take the air out of the balloon in a hurry,” Erickson said. But Erickson said rural communities have unique strengths, something he referred to as “built in connective tissue.” “The projects you work on with people in small towns are the people you see around town at church, the grocery store,” Erickson said. “That is a really beautiful part of the community and can be really powerful when it’s activated.” Related Republish This Story Republish our articles for free, online or in print, under a Creative Commons license. 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