As I prepare to conclude my leadership at the Council on Foundations, I’ve found myself looking back at my tenure. My goal is to get some sense of how much has changed and how much has stayed the same.

In August 2007 we gathered for the Council’s first Rural Philanthropy Conference in Missoula, Mont. This was motivated by Sen. Max Baucus’ call for greater philanthropic support of rural America’s future in his keynote speech to our 2006 Annual Conference.

Two years later, we reconvened at the Clinton Library in Little Rock, Ark. In the height of the economic recession, we expected some 40 loyalists to show-only to discover that four times that many people still cared enough about Rural America to attend.

Now we have just concluded the Council’s third Rural Philanthropy Conference in Kansas City, Mo. A lot of attendees have asked what happens to the Rural Conference after I leave the Council. It is my fondest hope that through these three conferences and our work in promoting rural philanthropy, we have made it clear that the Council on Foundations simply cannot claim to be the voice and vision for American philanthropy if it does not include an essential commitment to rural philanthropy.

The commitment to “Innovate, Implement, Impact” is more important today than it was earlier this spring. We’ve done a lot of research and planning. But I’m not certain that we’ve implemented our work in ways that achieve the necessary impact across rural America.

This we know:

  • According to Don Macke’s new research, there will be a $75.2 trillion transfer of intergenerational wealth over the next 50 years.
  • While urban wealth has decreased due to the economy and the markets, there is some evidence that rural land values have increased. We are in the peak of this rural transfer of wealth.
  • Eighty-six percent of Americans are served by community foundations, but it is rural communities that comprise the 14 percent of the population without a community foundation.
  • Our populations are increasingly diverse, reflecting the changing face of America.
  • While a treasured element of rural America, farming is now a small part of an increasingly diversified rural economy.
  • We all agree that the concept of a one-size-fits-all rural development plan is history. Each region is very different.
  • Today philanthropy has more diverse tools to support our future than ever before, such as donor advised funds that enable middle-income Americans to become philanthropists and L3Cs creating new partnerships between social enterprise and philanthropy. This is a very different rural America than even six years ago!

So where do we go from here?

First, we need rural America’s children who have become urban America’s adults to bring philanthropic resources back home.

Second, we must recognize the importance of building a new generation of philanthropic infrastructures in our rural communities.

Third, the value of collaboration among foundations cannot be overstated. Can we create donor advised funds in urban community foundations targeted to the donor’s rural roots? Can we encourage many of our larger foundations to become our partners in creative, innovative work?

We talk about the exit of large foundations from rural areas. But I know about the Ford Foundation’s “Wealth Creation in Rural America,” The Kresge Foundation’s “Rural People, Rural Places,” the McKnight Foundation’s legacy of rural initiatives in Minnesota, and the many rural communications initiatives funded by the Knight Foundation. In addition, the National Fund for Workforce Solutions is hard at work in rural communities, and the Clinton Foundation’s CGIAmerica is convening a separate track on rural America. We must find ways to connect their passion with ours.

Fourth, we must recognize the immediacy of this window of opportunity.

Rural philanthropy has the potential to create the rural America of our vision. Let us go forward to innovate, to implement, and to create the impact we seek.

Steve Gunderson is president and CEO of the Council on Foundations.

3 Responses to The Road Not Taken: Philanthropy and Rural America

Don Floyd

August 1st, 2011 at 8:17 am

Steve, always a champion for so many, but your lifelong commitment to rural vitality is awesome. We will all miss you at COF but know that the next chapter will be awesome too.

Darryl Rutherford

August 3rd, 2011 at 1:48 pm

Just wondering what your thoughts are on the role of traditional financial institutions especially as it relates to your goals of “Innovate, Implement, Impact”? Where and how should they be focusing their attention - investments, services & lending requirements?

admin

August 8th, 2011 at 10:21 am

Darryl:

Thanks for the question! How can private financial institutions help us advance the concepts of “Innovate, Implement, Impact” in rural areas? Actually, these same themes could easily be used for private financial institutions in ways that would make an incredible difference. As a small kid growing up in rural Wisconsin I remember the local bank’s advertisements. They billed their institution as providing “All Your Financial Services,” or “Your One Stop for all Your Financial Needs.” I honestly think financial institutions can achieve this advertising mantra. But, it will take some difference in how they operate.

Later this month my younger brother is going to open a Pet Store in northwest Wisconsin. For years, one of the larger pet store corporations has been working with him to do so. Such an enterprise begins with a vision of what market potential exists and where. Today, less than 2% of rural workers are in farming, fishing or forestry. But, when we think of pet food and pet services we still think of dog food at the local feed mill! It starts with a vision, a good market analysis, and a sound business plan. Most rural folks don’t have access to these tools but a one-stop financial institution could/should provide – or at least facilitate – such services as they seek to build their community’s economy.

Second, financial capital in rural America just doesn’t exist! We grew up in an era when family farms or small businesses were transferred from one generation to the next. This is a wonderful concept when it exists. But for many young entrepreneurs today, they have no farm or business to inherit. They must start from scratch. In my brother’s case, I needed to co-sign a bank loan in order for him to get access to the capital he needed, despite having a very sound business plan that had been carefully researched over a large geographical area to identify the right market, the cost-competitive facility, and the lack of duplication in business services. When I reviewed the business plan my one concern was that my brother was not compensating himself adequately for the time he would be investing in this new venture.

Third, and perhaps most important, we need to create sources of venture capital in rural America! There are, as you know, many individuals who have been able to save a decent amount of money over their working life. Some farmers and small business folks have a lot more net worth than they want their neighbors to know! We cannot expect them to risk their entire life earnings on local venture capital investments. But, someone needs to be the creator/consolidator of such resources. While rural banks may have some limits in what they can loan for new enterprises, or expansion of existing enterprises, think what could happen if the local bank could consolidate a series of $10,000 venture capital commitments into a pool of investment capital that could only be used to create new business within their community!

Fourth, we are in the midst of a major inter-generational transfer of wealth. In 1999, Boston College projected a $41 trillion transfer of wealth over the next fifty years in the United States. At our Rural Philanthropy Conference, Don Macke of RUPRI presented updated projections that suggest between 2010 and 2060, we will witness a $75 trillion transfer of wealth! Now, while urban folks are riding the roller-coaster of the markets and their retirement investments, most rural folks have their net worth in their land. And as you know, land values are continuing to increase! The problem is that 14% of Americans are not served by community foundations – most in rural areas. So today, while many rural counties are in the peak inter-generational transfer of wealth, there is no vehicle to capture even a small part of this transfer for philanthropy. We need the help of our financial leaders to communicate about and help create community foundations that can become the tool for building rural America’s future.

I could go on. But, I think you begin to see the incredible opportunity that is before us. But in my life time I’ve never seen a potential opportunity evaporating before our very eyes like this simply because we’ve not done the communications, created the capacity, and converted even 5% of the transfer of wealth in ways that builds the future of Rural America.

Thanks for your interest. Let me know if there is anything I can do to be helpful.

Steve Gunderson

Comment Form


Welcome to RE: Philanthropy! In this blog, guest and Council bloggers share ideas and insights on the most pressing issues in philanthropy. If you want to contribute, please contact webteam@cof.org.

The opinions expressed in this blog are those of the authors and do not necessarily reflect those of the Council on Foundations.

Contributors

Joop Rubens
Jason Franklin
Erin Rowley
Jailan Adly
Jenn Hoos Rothberg
Courtney Kaezyk
Steven Lawrence
Kate Levin Markel
Lisa Ranghelli
Kelly Brown
Kisha Green Dimbo
David Wood
Joshua Gibb
Deidre Lind
Marie-Frances Rivera
Dewayne Matthews
Lisa Richter
Bryan Del Rosario
Josephine Ramirez
Dori Kreiger
Matthew Nelson
Lyle Matthew Kan
Carrie Varoquiers
Omar Brownson
Shanee Helfer
Nicole Robinson
Laura McKnight
Elizabeth Ramirez
Tim Walter
Heather Bennett
Terry Kaelber
Lara Kalwinski
Virginia Esposito
Suzanne Skees
Michele McLellan
Eva Nico and Rebecca Graves
Vincent Robinson
Ed Miller
Laila Mehta
Richard Sussman
Jessica Janssen
Eliana Vera
Nancy Mahon
Amanda St. Pierre
Zeke Spier
Benna Wilde
BH Kim
Curtis Ogden
Nancy Van Milligen
Paul Major