1 doug friedli, development director nebraska community foundation capturing wealth transfer to...
TRANSCRIPT
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Doug Friedli, Development DirectorNebraska 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
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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
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Wealth Capture Pillar
Lea
der
ship
En
trep
ren
eurs
hip
Wea
lth
Cap
ture
You
th
HomeTown CompetitivenessHomeTown Competitiveness
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“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
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Learning Activity #1
Who do you make Charitable Gifts to?
From your current income…
From your assets…
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87%
13%
Donated Money
Nebraska Rural Poll - 2002
No Donation
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Nebraska Rural Poll - 2002Already in will
Would Consider
Not sure
4%8%
49%
12%Intend to do so
27% Would not Consider
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Rural Community Fundraising
What’s been successful?EventsAnnual Operating CampaignsCapital Campaigns
What’s been lacking?Endowments to sustain the communityEndowments for economic development
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What are Endowments . . .
A Community Savings Account
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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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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
SP
IRA
LIN
G U
P
Phase 1
Phase 2
Phase 3
Sustainability
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Learning Activity #2Asset Mapping Exercise
• Advocates
• History of Giving Locally
• Existing Local Foundations
• Local Resources
• Outside Resources
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Intergenerational Transfer of Wealth
An Unprecedented Opportunity for Rural America
“Millionaires in the Millennium”Havens & Schervish, 1999
Boston College
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The Intergenerational Transfer of Wealth: A Critical Opportunity For Rural
• Largest Ever Transfer of Wealth
• Urgency – TOW is peakingAging Rural Populationmany rural counties have 25% or greater 65+Heirs residing outside of Nebraska
• Goal - Capture 5% of Each Estate for HometownCreate an Unrestricted Endowment.Earnings will be reinvested year after year.
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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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America's Wealth Transfer:A Likely Scenario
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1999 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
% o
f W
ealt
h R
ele
ased
United States Nebraska Rural Nebraska
Rural NebraskaEstimated WealthTransfer = $94 billion
Nebraska Estimated Wealth Transfer = $258 billion
United States Estimated WealthTransfer = $41 trillion
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Peak of TransferGroup 1 – 2000 to 2014
Group 2 – 2015 to 2039
Group 3 – 2040 and after
County-Based Transfer of Wealth
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Focus on Assets and Future GiftsIn 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.
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Community Case StudyValley 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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VALLEY COUNTY CHARITABLE GOAL SETTING
December 31, 2007
10- Year County Wealth Transfer = $119,400,0005% of 10-Year Transfer = $5,950,000
Current Endowment = $1,557,839Current Expectancies (6 expectancies) = $5,350,000
__________________________
Total Endowment & Expectancies $6,907,839
Percent of 5% Wealth = 116.10%Transfer Achieved
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Many Success StoriesAffiliated Fund Population 31-Dec-07 Total*
Valley County 4,647 $6.9 million
McCook 7,994 $2.4 million
O’Neill 3,733 $2.1 million
Butler County 8,767 $ 897,000
Imperial 1,982 $ 515,000
*total includes endowed assets and expectancies
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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
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
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"To give away money is an easy matter, and in any man's power.But to decide to whom to give itand 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
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Community Endowment Building for Your Hometown
Set a GoalBuild Case StatementDetermine CatalystsTarget and Visit DonorsIdentify Board LeadershipTimeline
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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.
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HTC as a Case Statement
HTC helps Communities to:Start and Grow Small BusinessesProvide Better Employment OpportunitiesExpand Leadership CapacityProvide a Better Reason for Young People to
Live and Work in their Hometown
HTC is a Better Case to Prospective Donors
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Learning Activity #3The Case Statement: What Does Our Hometown Need? What Opportunities
Should We Pursue?• ________________________
• ________________________
• ________________________
• ________________________
• ________________________
• ________________________
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Catalysts
Choose and pursue one or more of the following catalysts to get your endowment building started:
Challenge grant(s)Education and trainingOutreach to financial advisorsDonor visitation Award Grants at a Community Celebration
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Learning Activity #4
What Catalysts should we pursue
that could propel the process?
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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
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Ask
Trust
Prospect
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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
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Ways to GiveOutright Gifts
• Cash
• Real Estate
• Securities
Planned Gifts
• Bequest by Will
• Life Insurance
• Financial Account
• Retirement Account
• Charitable Gift Annuity
• Charitable Remainder Trust
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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
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Learning Activity #5
Identify Potential Donors
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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”
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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
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Learning Activity #6
Identify Leaders &Advocates
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Action Plan
1. Set the Goal
2. Case Statement
3. Catalysts
4. Advocates
5. Donor Visitations
6. Calendar of Events/ Time Line
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Learning Activity #7
Next Steps for my Community
to build an Endowment for HTC
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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
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Workshop Wrap Up. . .
Back Home
WorkshopEvaluation
Next Steps
FinalThoughts
