1. 1 Doug Friedli, Development Director Nebraska Community Foundation www.nebcommfound.org CAPTURING WEALTH TRANSFER TO BUILD AND SUSTAIN YOUR HOMETOWN Presented to the Indiana HTC Pilot Communities Indianapolis, IN * February 2008

2. 2 Outline for Today’s Presentation 1.Sustaining Your Community 2.Why and How to Build an Endowment 3.Transfer of Wealth Opportunity 4.Strategic Grantmaking 5.Identifying Leaders and Advocates 6.Next Steps – Plan of Action

3. 3 Wealth Capture Pillar Leadership Entrepreneurship Wealth Capture Youth HomeTown Competitiveness

4. 4 “Charitable” defined Relief for the poor and distressed Promotion of good health Lessening the burdens of gov’t. Advancement of religion Advancement of education and science Promotion of social welfare

5. 5 Learning Activity #1 Who do you make Charitable Gifts to? From your current income… From your assets…

6. 6 Nebraska Rural Poll - 2002 No Donation

7. 7 Nebraska Rural Poll - 2002 Already in will Would Consider Not sure 4% 8% 49% 12% Intend to do so 27% Would not Consider

8. 8 Rural Community Fundraising What’s been successful?  Events  Annual Operating Campaigns  Capital Campaigns What’s been lacking?  Endowments to sustain the community  Endowments for economic development

9. 9 What are Endowments... A Community Savings Account

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11. 11 Community Affiliated Funds  Governed by Fund Advisory Committees (FAC)  FAC Responsible for: –Setting Local Priorities & Agenda –Engaging the Community –Donor Targeting & Visitation –Grant Making

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13. 13 Helps Communities Spiral Up Philanthropy for ongoing funds for leadership, youth, and entrepreneurship Cultural capital increases with pride and hope as young people return Youth engagement, leadership and entrepreneurship development and capturing wealth transfer creates new social, cultural and financial capital. Social, political and financial capital to support HTC and early assessment Cultural capital begins to change—We can do it! Bridging social capital brings outside expertise together with internal wisdom SPIRALING UP Phase 1 Phase 2 Phase 3 Sustainability

14. 14 Learning Activity #2 Asset Mapping Exercise Advocates History of Giving Locally Existing Local Foundations Local Resources Outside Resources

15. 15 Intergenerational Transfer of Wealth An Unprecedented Opportunity for Rural America “Millionaires in the Millennium” Havens & Schervish, 1999 Boston College

16. 16 The Intergenerational Transfer of Wealth: A Critical Opportunity For Rural Largest Ever Transfer of Wealth Urgency – TOW is peaking Aging Rural Population many rural counties have 25% or greater 65+ Heirs residing outside of Nebraska Goal - Capture 5% of Each Estate for Hometown Create an Unrestricted Endowment. Earnings will be reinvested year after year.

17. 17 Transfer of Wealth: A Unique Opportunity To build philanthropy and endowments To prove that capital is not the limiting resource to community development To build sustained community development strategies (by using Asset-Based Community Development, or ABCD) To break out of a cycle of dependency

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20. 20 Peak of Transfer Group 1 – 2000 to 2014 Group 2 – 2015 to 2039 Group 3 – 2040 and after County-Based Transfer of Wealth

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22. 22 Focus on Assets and Future Gifts In land-rich, cash-poor rural economies, traditional urban income-based fundraising strategies will not succeed. Focus on Gifting Assets, not Income.  Therefore, estate planning, and creation of expectancies within those estate plans, is paramount to success.

23. 23 Community Case Study Valley County, Nebraska Population = 4,647; 10% loss in ten years Primarily farm/ranch economy; strong retail and service sector; little manufacturing 50% more low-income residents than state average; 50% less upper-income residents 22% elders; 13% over 75 (2x state average)

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25. 25 VALLEY COUNTY CHARITABLE GOAL SETTING December 31, 2007 10- Year County Wealth Transfer = $119,400,000 5% of 10-Year Transfer = $5,950,000 Current Endowment = $1,557,839 Current Expectancies (6 expectancies) = $5,350,000 __________________________ Total Endowment & Expectancies$6,907,839 Percent of 5% Wealth = 116.10% Transfer Achieved

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27. 27 Many Success Stories Affiliated Fund Population 31-Dec-07 Total* Valley County4,647$6.9 million McCook7,994$2.4 million O’Neill3,733$2.1 million Butler County8,767$ 897,000 Imperial1,982$ 515,000 *total includes endowed assets and expectancies

28. 28 Andy and Geri Anderson Endowed Gift of $346,341 to the McCook Community Foundation “To us it is important to give while we are still alive. We want to see the benefits our gift makes to the community.” - Andy Anderson First year grant of $13,500 for: McCook HTC Youth Task Force Entrepreneurship training for teachers 4-H ESI Entrepreneurship curriculum Youth-led community project First year grant of $13,500 for: McCook HTC Youth Task Force Entrepreneurship training for teachers 4-H ESI Entrepreneurship curriculum Youth-led community project

29. Examples of Strategic Grants Non-Traditional Scholarships High-quality affordable child care Microenterprise business development Build Leadership with a Purpose Capitalize Youth Foundation Retaining and recruiting volunteers Value-added curriculum for K-12 school

30. 30 "To give away money is an easy matter, and in any man's power. But to decide to whom to give it and how large and when, and for what purpose and how, is neither in everyman's power --nor an easy matter. Hence it is that such excellence is rare, praiseworthy and noble. " Aristotle 384-322 BC

31. 31 Community Endowment Building for Your Hometown  Set a Goal  Build Case Statement  Determine Catalysts  Target and Visit Donors  Identify Board Leadership  Timeline

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33. 33 Case Statement A case statement is the why to give. It is the rationale for a donor to make a gift. In rural communities, the case statement must be crafted in one of two ways: Needs and Opportunities.

34. 34 HTC as a Case Statement HTC helps Communities to:  Start and Grow Small Businesses  Provide Better Employment Opportunities  Expand Leadership Capacity  Provide a Better Reason for Young People to Live and Work in their Hometown HTC is a Better Case to Prospective Donors

35. 35 Learning Activity #3 The Case Statement: What Does Our Hometown Need? What Opportunities Should We Pursue? ________________________

36. 36 Catalysts Choose and pursue one or more of the following catalysts to get your endowment building started:  Challenge grant(s)  Education and training  Outreach to financial advisors  Donor visitation  Award Grants at a Community Celebration

37. 37 Learning Activity #4 What Catalysts should we pursue that could propel the process?

38. 38 Four Steps to Yes! Create a Trusting Relationship! Jointly Determine a Common Concern, Need or Problem Jointly Determine a Real Solution to the Problem Express the Sense of Urgency in Creating a Solution

39. 39 Ask Trust Prospect

40. 40 Marketing Motivators 50% to 70% have no will or estate plan. 8 of 12 largest gifts were bequests. 70% of endowments from bequests Fewer than 20% of people have ever been asked Wealth Transfer

41. 41 Ways to Give Outright Gifts Cash Real Estate Securities Planned Gifts Bequest by Will Life Insurance Financial Account Retirement Account Charitable Gift Annuity Charitable Remainder Trust

42. 42 Donor Identification/Targeting Who do you know who ………… Is over age 60 Has lived here all of their adult life Is a business owner Lives a comfortable yet modest lifestyle Owns real estate (home, commercial, farm/ranch) Is a compulsive saver and investor Is concerned about the welfare of others Loves their hometown

43. 43 Learning Activity #5 Identify Potential Donors

44. 44 Identify Board Members Board members should be persons who: influence public opinion, are community leaders, and are willing to give of their: Time (meetings, donor visitations) Talents (working, celebrating) Treasure (100% of Board gives) “Marathon – Not a Sprint”

45. 45 Respected and Trusted Steward  Has history of sound judgment  Is believable  Demonstrates impeccable record  Has respect across diverse groups  Reflects nature of community stewardship  Role model for contributing time, talent, treasure

46. 46 Learning Activity #6 Identify Leaders &Advocates

47. 47 Action Plan 1. Set the Goal 2. Case Statement 3. Catalysts 4. Advocates 5. Donor Visitations 6. Calendar of Events/ Time Line

48. 48 Learning Activity #7 Next Steps for my Community to build an Endowment for HTC

49. 49 Summary 1.Sustaining Your Community 2.Why and How to Build an Endowment 3.Transfer of Wealth Opportunity 4.Strategic Grantmaking 5.Identifying Leaders and Advocates 6.Next Steps – Plan of Action

50. 50 Workshop Wrap Up... Back Home Workshop Evaluation Next Steps Final Thoughts

51. 51 For More Information… Doug Friedli dougfriedli@nebcommfound.org www.nebcommfound.org