National Rural Assembly Issues Rural Philanthropy Recommendations

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December, 2011; Source:   National Rural Assembly | This past June, the 2011 Gathering of the National Rural Assembly bought 342 rural leaders and advocates to St. Paul, Minnesota for a pretty thorough analysis of what rural America needs from government, the private sector, and philanthropy. With NPQ’s focus on philanthropy, we looked for that section of the report and found something of a disconnect.

In a sidebar on p. 11, there is the statement in quotation marks, “Philanthropy has to be held to the fire,” followed by some comments on philanthropy by Chuck Fluharty of the Rural Policy Research Institute. It isn’t clear that Fluharty uttered the “fire” statement, but he has long been a courageous thinker about the practices of foundations. Nonetheless, the statements specifically attributed to him are typically straightforward: “Philanthropy needs to scale up and build new commitments to place . . . They need to give more than the required five percent, and need to tie to public investment.”

Fluharty’s statements seem addressed to the foundations that currently sit on three-quarters of a trillion dollars of tax-exempt assets. But the section of the report on philanthropy, pp. 14–15, titled “Opening the Door to ‘Giving of Ourselves,’” looks to the ability of rural communities to tap the wealth of rural communities—land, timber, water, and energy—to serve rural America. The discussion focused on rural development philanthropy—“giving by everyone and benefitting everyone”—in contrast to traditional philanthropy of “large gifts given by wealthy donors.” The logical development of this analysis leads to the idea of wealth transfer stimulating new community-based endowments linked to community foundations, a process that would be boosted, according to the Rural Assembly, by the enactment of the Rural Philanthropy Growth Act, which would “help lift restrictions on community-based endowments and provide more flexibility for community foundations that serve rural areas.”

The specific recommendations on philanthropy focus on promoting rural development philanthropy, essentially promoting indigenous rural philanthropy with the incentive of the Growth Act as defined and pushed by the Council on Foundations. Among the five recommendations are an obligatory call for “rural philanthropic collaborations,” for a shift from “a negative focus on the ‘philanthropic divide’ to a positive discussion,” and for advocacy at the state level for incentives, probably like Michigan’s, Iowa’s, or Montana’s, for contributions to community foundations.

What happened to a Rural Assembly message to established national foundations? Why nothing, speaking to the entities that control the existing tax-exempt wealth of philanthropy—a good chunk of it earned from the indigenous rural assets and, rarely ever spoken of, rural labor. Do recall that rural people have given their communities and lives to making rural assets productive for society. How would the National Rural Assembly gathering’s mainstream foundation funders—the W.K. Kellogg Foundation, the Northwest Areas Foundation, the McKnight Foundation, and the Surdna Foundation—have reacted had the Assembly report generated some tough recommendations calling on the assets of existing large foundations as opposed to encouraging the formation of new and likely to be small new rural funds?—Rick Cohen

  • Susan McGuire

    The report refers to the inherent wealth of rural areas: timber, minerals, water, energy. But like farmers who are “land rich, and cash poor,” resources aren’t cash wealth that can be used to support philanthropic needs. The profit from the extraction of these resources goes to big national and multinational companies and leaves the community. Trying to set up rural community foundations to promote “giving by everyone to benefit everyone” is like trying to get blood from a stone because the people in the rural communities are not the ones who make the big profits–their gifts are always going to be modest. The people and corporations that became wealthy through the extraction of local resources need to give back to the rural communities that provided the resources and workers. The model of wealthy people (and their foundations) deciding how and where to give their money is not necessarily bad, it just needs to be re-directed back to the rural communities that were the source of that wealth. If there were incentives (moral and legal) for corporations and CEOs to donate to rural community foundations, then those foundations could support development of rural communities. I don’t know what the Rural Philanthropy Growth Act contains. Is there a chance it might actually redirect individual and corporate philanthropic giving to small community foundations rather than large national foundations? And does it encourage large national foundations to pass money onto rural community foundations?
    Sue McGuire