Community development philanthropy
We live and work in an age where there seems to be too few resources, but what if we had over $1 million a year to use for community development? Public parks, little league diamonds and other public spaces could be improved. STEM education could be enhanced; an endowed scholarship could be established for workforce education; the recreational trail system could be completed, and so many other things that will keep Marshall County thriving into the future.
Communities like Marshalltown are challenged to find funding from local, state, and federal sources for targeted economic development and community development projects. Without these outside resources we need to look to “hometown philanthropy” as a solution. Over the next 25-40 years, communities across Iowa will experience the largest intergenerational transfer of wealth in history and much of this wealth will flow out of the area to heirs who live in other parts of the country. It is time to consider the community as an heir.
The Community Vitality Center at Iowa State University’s Extension and Outreach program estimates $120 million was transferred in wealth annually from 2008-12 in Marshall County. The figure is based upon reported probate records of wills and estates. Much of this wealth is currently invested in family homes and farms, retirement accounts and other appreciated assets some of which will be heavily taxed if given to heirs.
Even if just 1 percent of every probated estate were directed to a community development fund or a specific nonprofit organization the community would have over $1 million a year to use for enhanced quality of life. And if the gifts are earmarked for endowments the resulting fund would generate hundreds of thousands of dollars every year for local projects.
“Hometown philanthropy” is a concept that urges residents to consider designating a portion of their estates, IRA and 401 (k) accounts or insurance policies to a community development fund, an endowment that will ensure that Marshall County enjoys the long-term benefits of this opportunity.
The transfer of wealth research can change the community’s conversation from one of deficits to one of assets. This research makes clear that encouragement of charitable investments in the local community should start now, while the window of opportunity is open.
Bettie Bolar is director of the Community Foundation of Marshall County.