One of the most important trends in U.S. philanthropy right now is the boom in regional giving that's unfolding outside such longtime bastions of grantmaking as New York, Boston, Chicago and the Bay Area. But before we dive into yet another case study of this phenomenon, one with an interesting angle, let's consider the key underlying driver of this trend: an explosion of rich people living all over the country.
When you think of all the new wealth created in America's second Gilded Age, which began in the early 1980s, probably what comes to mind first are the many billionaires minted in the tech and finance industries in places like New York City and Palo Alto. In fact, though, these high-profile industries aren't the only places that have generated a lot of very rich people, nor has all the wealth creation in the U.S. been confined to coastal regions.
Glance through the Forbes 400 list, and you'll find plenty of billionaires who made their fortunes in "old economy" industries like energy and manufacturing, or in sectors like real estate, healthcare, and hospitality. You'll also find that quite a few of these wealthy folks live far away from the Acela corridor or West Coast hotspots. For example, Wisconsin has eight billionaires, Colorado has 10, Arizona has six, and so on.
What's more, if you look beyond the billionaires, you'll find that there's a large number of multimillionaires in every region of the United States. According to a report by Wealth-X published last year, there were 73,000 ultra-net-worth individuals in U.S. in 2016—defined as people with liquid assets of $30 million or more. While New York and Los Angeles had the largest concentration of such people, plenty lived elsewhere, in places like Minneapolis-St. Paul, Phoenix and the Detroit-Dearborn area.
The dispersal of wealth in the U.S. explains why so many regional universities and cultural institutions are raising record amounts of money, as we so often report. For example, among the 20 universities that raised the most money in 2017 were the Indiana University, the University of Michigan and Ohio State University.
North Carolina is a prime example of a state that's seen a seen growing numbers of wealthy residents in recent years. Many of the high earners here live in the Carolina Research Triangle that encompasses Raleigh, Durham and Chapel Hill. But Charlotte and Mecklenburg County, which has become a major finance center, now have even more rich people. One analysis found that from 2012 to 2015, the number of Mecklenburg residents earning at least $1 million a year increased by 27 percent.
The growth of wealth in the state explains why the Foundation For The Carolinas (FFTC) now has national-size assets. Based in Charlotte, North Carolina, this foundation was established back in 1958, thanks to a $3,000 United Way gift. Over the past 60 years, FFTC has transformed itself from a tiny, hyper-local funder to one of the biggest powerhouses on America’s community foundation scene. At the end of 2015, FFTC reported $1.7 billion in assets. Two years later, its assets had risen to $2.5 billion, a huge jump. Last year was also a record breaker for grant distributions, with $420 million of FTTC money going out the door.
But the secret of FFTC's success doesn't lie only in rising regional wealth. It also has to do with the foundation's strategy for getting at that wealth.
Regardless of geographic location, the success of a community foundation is largely dependent upon the generosity of its donors. Although FTTC used to rely pretty solely on cash, stocks and real estate gifts, the funder began pursuing a new source of donations about five years ago that has made a big difference.
FFTC began working with local business owners who were interested in helping out the community while also running their own businesses. The foundation has been working with successful business owners in the area who want to leave behind their shares of family businesses after death. One good example is John Crosland, Jr., a developer in Charlotte who started a subsidiary of FFTC called the Crosland Foundation that gets funding from his company’s profits. Foundation subsidiaries are really where it’s at for FFTC right now, because there are a lot of business owners in this part of the country who are looking to retire and intrigued by the idea of giving enterprise interests to charitable causes.
“It’s really driven by the basic premise that most American wealth is held by private businesses,” said foundation executive vice president, Holly Welch Stubbing. “Ninety-five percent of charitable giving is by cash, but most wealth is held by family businesses. It was just a real opportunity for innovation.”
It’s not just well-established companies with aging owners that have helped boost FFTC’s assets lately. Even early-stage companies, like MapAnything, are getting in on the action and pledging percentages of equity to the foundation. FFTC presents an attractive opportunity for small startups to get involved with giving now, even with their limited funds, and also later in the company’s progression with the liquidation of shares to create a fund at the foundation. In addition to business-interests gifts, which are increasing in value by the year, FFTC also continues to receive millions of dollars from estate assets.
While FFTC made the jump up to sixth place on the list of the largest community foundations in the country based on assets, it was actually number two for grantmaking and contributions in 2017. It gave nearly 29,000 grants in 2017.
Michael Marsicano, president and CEO of Foundation For The Carolinas, said in a press release:
Every year we highlight our total assets, reflecting the generosity of our donors. However, this year—as we celebrate our 60th anniversary—I am particularly pleased to report our grantmaking totals for 2017. We’re setting records after six decades because our fundholders are active, engaged and committed to our region through the grants they distribute.
Some of FFTC’s power and fundraising muscle also comes from its well-established 13 regional affiliate foundations that focus on specific counties and cities. Additionally, as we've reported, FFTC has played an increasingly active civic leadership role that raised its profile. Perhaps most notably, following the fatal police shooting of Keith Lamont Scott in 2016, and the violent protests that followed, the foundation played a key role in coordinating and funding an opportunity task force to address some of the underlying issues driving social tensions in the Charlotte area—an effort that's resulted in new anti-poverty efforts.
Even if you’re nowhere near the Carolinas, this is an innovative and fast-growing community foundation that’s worth keeping an eye on in coming years. Few such institutions have been able to pull off its rate of growth.
FFTC serves 13 counties in both North Carolina and South Carolina, awarding grants in the areas of education, human services, arts and culture, animal welfare, disaster relief, the environment, and religious institutions. The foundation manages over 2,600 charitable funds on behalf of individuals, families, nonprofits and companies. It also manages dozens of competitive grant programs.