1. 1 Presented by Maxine Moul to the Iowa Philanthropy Academy February 4, 2008 www.nebcommfound.org Using Philanthropy to Build Rural Communities by Supporting Entrepreneurship An Example from Nebraska

2. 2 Outline for Today’s Presentation 1.About Nebraska 2.Transfer of Wealth Opportunity 3.About the Nebraska Community Foundation 4.Community-Based Endowment Building 5.Endowment for What? 6.HomeTown Competitiveness (HTC) 7.Public Policy to Help Community Building

3. 3 About Nebraska  Nebraska’s strengths –Civic capacity and pride –Educational system –Work ethic  Nebraska’s struggles –Out-migration of middle-class youth –Lack of diversity in rural economy –Large geography/many frontier counties (418 of 532 (80%) of communities < 1,000 pop.)

5. 5 Special Challenge Engaging rural leaders in defining new opportunities for their communities to build a positive future and stem the tide of out- migration

6. 6 Intergenerational Transfer of Wealth An Unprecedented Opportunity for Nebraska “Millionaires in the Millennium” Havens & Schervish, 1999, Boston College “Wealth in Nebraska” Don Macke, 2002, Nebraska Community Foundation

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8. 8 Peak of Transfer Group 1 – 2000 to 2014 Group 2 – 2015 to 2039 Group 3 – 2040 and after County-Based Transfer of Wealth

9. 9 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

10. 10 Transfer of Wealth Studies

11. The Nebraska Community Foundation: Incorporated in 1993 Statewide Board of 18/Staff of 11 199 Affiliated Funds (98 Community, 58 Organizations, 29 Donor-Advised, 14 Gift Annuities) Mission The Nebraska Community Foundation exists to help concerned individuals mobilize charitable giving in support of the betterment of Nebraska communities and organizations. 3

13. 13 NCF Philosophy Locally-controlled/decentralized Do not replace local capacity; all services from “mothership” must add-value Reciprocity Build community capacity through empowering local leadership Convene & build partnerships Build endowments to support core mission Belief in power of Hometown

14. 14 Affiliated Fund Responsibilities  Governed by Local Fund Advisory Cmte. (FAC)  FAC Responsible for: –Setting Local Priorities & Agenda –Endowment Building –Engaging the Community –Building/Expanding Relationships with Donors and Financial Planners –Donor Targeting & Visitation –Grant Making

15. 15 Community Affiliates Model Community Affiliated Fund Unrestricted Community Endowment Public Schools Economic Development

16. 16 NCF Provides Corporate Umbrella All Accounting, Legal & Investment Comprehensive Insurance Coverage Website (including on-line giving) Community-Based Education/Training Peer-Learning Network Customized Endowment Building Assistance with Strategy, Fundraising & Gift Planning

17. 17 Community & Nonprofit Fundraising What’s been successful?  Events  Annual Operating Campaigns  Capital Campaigns What’s been lacking?  Endowments  Endowments for community economic development

18. 18 NCF Partners with Communities and Nonprofits to Build Endowments Board Engagement Goal Setting & Campaign Development Build Skills & Confidence to Engage Donors Communications & Marketing Gift Planning Financial & Investment Management

20. 20 2007 Rural Philanthropy Conference Goal: To teach rural community foundations about the transfer of wealth and how they can adopt strategies to move their own rural community development initiatives forward using the transfer of wealth as a case statement. –Speakers from Nebraska, South Dakota and Wisconsin –Keynote address by Dr. Rick Foster of the W.K. Kellogg Foundation –Attended by 93 individuals from 13 states and the District of Columbia. ( Idaho, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, New York, Ohio, Pennsylvania, South Dakota, Texas and Wisconsin)

21. 21 Impact of Decentralized NCF System Empowers Community/Builds Capacity 2,000+ Fund Advisory Committee Members $34 Million in Assets (35% year-over-year growth) $23 Million Endowed (39% year-over-year growth) $28 Million in Expectancies ( 124 confirmed gifts ) 29,608 Donors in Past 5 Years $65 Million in Total Reinvestment

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23. 23 Community Endowments Affiliated Fund Population 30-Jun-07 Total* Ord/Valley County4,647$6.9 million Bassett/Rock County1,756$2.6 million McCook7,994$2.3 million Shickley 376$1.8 million Nebraska City7,228$1.6 million Brown County3,525$1.3 million Spencer 541$1.2 million 45 community-based affiliated funds now have over $100,000 in combined endowment, expectancies and pledges *total includes endowed assets, expectancies and pledges

24. 24 Community-Based Endowment Building Efforts Endowed assets plus expectancies (in millions)

25. Endowment for What? Strategic Grant Making Now that you have an endowment, what difference is that going to make in the future of your hometown? These new assets must be invested in ways to build a better future for your hometown!

26. 26 HomeTown Competitiveness Framework for Effective and Sustainable Rural Community and Economic Development

27. 27 Four Pillars to Build Community Leadership Entrepreneurship Charitable Assets Youth HomeTown Competitiveness

28. HTC Strategic Partnership Heartland Center for Leadership Development

29. 29 Nucleus of HTC Communities

30. 30 HTC as a Case Statement HTC helps Communities to: Start and Grow Small Businesses Provide Better Local Economic Opportunities Expand Leadership Capacity Attract More Young People to Live and Work in their Hometown HTC is a Better Case to Prospective Donors

31. 31 HTC has become a National Model:  2004 Innovative Program Award from the International Community Development Society  2005 HTC Awarded $2 Million Entrepreneurship Development Systems Grant from the W.K. Kellogg Foundation (one of six selected from 180+ proposals)  17 HTC Academies completed in 8 states (787 participants)  HTC training/technical assistance now being provided in 12 other states (HTC developing affiliation model)

32. 32 Entrepreneurship Leadership Entrepreneurship Charitable Assets Youth HomeTown Competitiveness

33. 33 Entrepreneurship Expected Outcomes Strategy in place for increasing local entrepreneurial business development Increased entrepreneurial activity within the community in private and public sectors New jobs and wealth being created within the community More current businesses retained and growing

34. 34 Entrepreneurship How does it support the HTC strategy? Business development creates jobs and new wealth in the community Assists in retaining existing businesses Sustains population with manageable growth Creates career opportunities for young people Entrepreneurs can provide leadership and new ideas for the community’s development

35. 35 Entrepreneurship in Valley County Focusing on building business plans for both start-up and existing growth-oriented businesses Business coach hired to provide one-on-one assistance 73 new businesses, 10 expansions and 21 business transitions since 2000 These 104 businesses have created 332 new full time jobs and nearly $90 million new investment Linked people recruitment; redesigning Web site Youth Entrepreneurship Fair

36. 36 Charitable Assets Leadership Entrepreneurship Charitable Assets Youth HomeTown Competitiveness

37. 37 Charitable Assets Expected Outcomes Community-based endowed assets Greater knowledge about charitable giving tools and resources Grants awarded to specific activities that will improve economic prospects for individuals and/or technical assistance and business coaching to entrepreneurs and small businesses Grants awarded to specific activities that will improve the likelihood that young people stay or return to their hometown

38. 38 Charitable Assets How does it support the HTC strategy? Community endowments provide a new revenue stream to underwrite HTC efforts Pool of local assets needed to leverage external private or government funding Break out of cycle of dependency Endowments create a margin of excellence for communities to build their competitive advantage

39. 39 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

40. 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

41. 41 Young People

42. 42 Young Adults Expected outcomes from HTC Champions group recruited and involved Linkages: Leadership and Entrepreneurship Stronger, sustained connections with alumni Increased number of young adults returning

43. 43 Sampling of Youth Survey Results Plan to Attend College Desire to Return Home Want to Own Business Own Business Now Atkinson Pop. 1380 96%66%57%14% O'Neill Pop. 3,852 98%55%64%12% Stuart Pop. 650 100%66%60%14% Survey of all high school (9-12) students, 2005-06

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45. 45 Youth Attraction Formula Based on actual U.S. Census population data Factors in rural county marriage rate Calculated using average children per family Adjusts for current number of youth in county Formula helps determine annual youth goal Goal used to open dialog and engage youth

46. 46 Garden County Youth Attraction Goal 1990 Population2,460 2000 Population2,292 Percent change-6.8% Loss Per Year in 1990s17 Persons Total Youth (18 and under)529 Persons Youth as a Percent of Total 23% Average Graduating Class29 Persons Annual Youth Attraction Goal6 Persons 19% Youth Attraction Goal

47. EntrepreneurShip Investigation (ESI) Partnership Venture with UNL Extension Focus upon Middle-School Age Youth Builds on Local 4-H Infrastructure Links with Local ED Resources Flexible Delivery Methods

48. 48 Leadership Entrepreneurship Charitable Assets Youth HomeTown Competitiveness

49. 49 Leadership Expected Outcomes Increased diversity in community leadership Enhanced leadership knowledge and skills More volunteer engagement in community projects and activities More people willing to run for public office

50. 50 Leadership How does it support the HTC strategy? Expands the pool of volunteers and emerging leaders to work on community priorities Assists current and new leaders in developing their leadership skills Encourages community members to participate in community planning and development projects

51. 51 Leadership Development in Butler County Partnership between UNL Extension & HTC Completed 3 years of Leadership Plenty; 53 graduates Intergenerational and interdisciplinary HTC expanded county-wide in 2006 Butler County inter-local agreement to support community economic development (two full-time staff)

52. 52 HTC 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

53. 53 HTC builds Community Ownership In three years, Valley County (population 4,647) has graduated 70 from a leadership class; set up an endowment with $1.2 million willed by a local couple; and hired a business development coordinator…. A wealthy alum living in Arizona flies in to teach a class on growing entrepreneurs. A graduate came home from Lincoln to a start an irrigation-well firm. Another plans a local dental practice. The county must attract 27% of its high school’s average graduating class of 67 to stabilize its population by 2010. USA Today, February 9, 2005

54. 54 HTC Success in Valley County Economic development staff of three Ongoing business training & visitation Youth entrepreneurship fair 102 graduates of county-wide leadership class 67 $1,000+ founders of HTC endowment $7 million+ combined endowment and expectancies Retail sales +20% (statewide +16%) Per capita income +22% (statewide 9%) Population gain of 3% (first increase in 50 years)

55. 55 HTC Success in Holt County HTC initiated in Stuart & Atkinson in 2003 O’Neill joined in 2004 Inter-local agreement in 2006 to expand countywide (9 communities) Full-time county-wide HTC coordinator Starting 4 th HTC leadership institute; 65 graduates $2.5+ million combined endowments & expectancies

56. 56 HTC Success in Butler County David City initiated HTC in 2004 Strategic grants for youth entrepreneurship, leadership development, related HTC efforts David City Aquinas entrepreneurship class ESI camp completed summer 2007 Starting 4 th year of Leadership Plenty; 50 graduates David City Area Foundation changed to Butler County Community Foundation in 2007

57. 57 EndowNebraska: Nebraska’s Charitable Tax Credit for Gifts to Endowments Tax incentive to mobilize the transfer of wealth 15% credit for individuals (10% for corporations) Maximum credit of $5,000 per year Individuals: Irrevocable planned gifts Corporations: Outright gifts Effective January 2006; Sunsets December 2010

58. 58 Building Entrepreneurial Communities Act (BECA) Matching grants to two or more partnering local governments to provide education, training and technical assistance for: Small business development and entrepreneurship Leadership development Attract and retain young people and families Community philanthropy and endowment building Attract new residents Enacted 2005; revised 2007 ($500,000/year)

59. 59 What Others Are Saying About NCF Susan Berresford, President of the Ford Foundation, calls NCF a ‘strong, unique and national model’ because it:  is built and sustained from the grassroots;  values and nurtures entrepreneurial leadership;  emphasizes effectiveness, especially in grant making, to support economic opportunity;  embraces and seeks to strengthen Nebraska values.

60. 60 NCF System Helps Communities To Build a New and Better Set of Habits More and more frequent community reinvestment (private and charitable) Education/Training/Technical Assistance to Empower Community Leaders More Donor Engagement by Friends and Family Build Endowments for Margin of Excellence Renewed Hope in the Future of Our Hometowns

61. 61 For more information on the Nebraska Community Foundation or HomeTown Competitiveness: www.nebcommfound.org