Combining economic development and philanthropy
Combining the tools of economic development and community-based philanthropy can be a great benefit for the local area in enhancing community life. It is a well-accepted fact that quality of life is a major aspect of economic development. The physical amenities and social health of a community are things that can keep businesses in the area and attract new businesses and industry.
One way to create a sustainable, long-term source of development resources is to create appropriate vehicles for capturing some portion of the wealth created in communities and investing it to support future development and innovation. Many communities around the nation have undertaken community development philanthropy strategies to capture locally developed wealth and endowing some of it for needs in the community.
The approach could be a simple as individuals creating endowed funds for specific restricted purposes or it could be as widespread as a community-wide endowment that is unrestricted and available for needs as they arise. Some examples include a community that used endowed funds to recruit a dentist into their small community, or a community that created a $2 million pool to support workforce training and recruitment efforts. In all cases, the community foundation and economic development worked closely together to develop the pool of resources and identify critical needs in the community.
One way of approaching community development philanthropy is to understand the opportunities created by transfer of wealth. According to the most recent study by the Community Vitality Center at Iowa State Extension, the average annual transfer of wealth in Marshall County is $120 million. This study is based on probate records of wills and estates of decedents. From 2008-12 the average wealth transfer per probated estate was $587,625. If each estate would consider the community as one of their heirs and left even 1 percent to a community endowment, imagine the resources available for future development. The amount per probated estate is expected to grow until about 2049. Now is a good time to make the connection between wealth creation, wealth capture, and the reinvestment of that wealth in ways that stimulate community and economic development.
Bettie Bolar is the director of the Community Foundation of Marshall County