CDAC Spotlight We've Met the Solution, and It Is Us

CDAC Member Spotlight

Brian Fogle is president of Community Foundation of the Ozarks (CFO). Prior to joining CFO, he spent 30 years in banking in Springfield.

Fogle has been active in numerous civic and nonprofit groups. He currently chairs the Good Community Committee and is on the board of the Springfield Area Chamber of Commerce, the Every Child Promise, Mercy Health Systems–Springfield, the Urban Districts Alliance and Springfield Business Development Corp. He has received the O. Franklin Kenworthy Leadership Award, the National Community Leadership Award and the Springfieldian Award, as well as an honorary doctorate of humane letters from Drury University.

Fogle was appointed by Missouri Gov. Jay Nixon to the Coordinating Board for Higher Education in 2012, and is a member of the Community Development Advisory Council (CDAC) for the Federal Reserve Bank of St. Louis. He is a native of Aurora, Mo., and received bachelor’s and master’s degrees in banking and finance from the University of Mississippi.

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CDAC members are experts in community and economic development and financial education. They complement the information developed through outreach by the District’s Community Development staff and suggest ways that the Bank might support local efforts. A list of current members is available at www.stlouisfed.org/community-development/about-us/community-development-advisory-council.

The challenges for rural America have been debated for decades. The unending urbanization of the country continues at the expense of smaller, nonmetropolitan communities. According to recent U.S. Department of Agriculture (USDA) data, population in these counties has diminished to about 46 million Americans—15 percent of the total population spread across 72 percent of the land area. The trend continues, with net population loss of 44,000 in the two years since the 2010 census. The Great Recession had a greater impact on rural areas, with more job loss, more income decline and a larger increase in poverty rates than urban areas experienced. Even the agricultural boom of the past few years shows signs of slowing now, with farm incomes predicted to decline in 2014.

The reasons for this long, slow downturn are as numerous as the solutions proposed over the past half century. Small manufacturing declines, agricultural efficiencies, population mobility and lower educational attainment all contribute to the negative trends. Most certainly, public policy isn’t consistent or sufficient to meet the challenges, which is no small wonder given the urban representation of our policymakers. Rural America continues to struggle to find a national voice.

Solutions to address these challenges are mixed, at best. As our nation struggles to find resources for education, infrastructure and social needs, our rural areas tend to suffer even more—often in silence. For too long, many rural leaders have looked to state capitals or Washington, D.C., for answers. Instead, they could be looking right in their own communities, where many answers may lie.

Two of these possible answers include local asset development to build community resources and strengthening public education, because schools are anchors of rural communities. The Community Foundation of the Ozarks (CFO) is focusing on both of these potential solutions.

The CFO was founded in Springfield, Mo., in 1973; the first rural affiliate was added in 1993. Today, the organization’s network of 44 community affiliates extends from the Mississippi River in the east to the Kansas state line in the west, the Missouri River in the north to the Arkansas state line in the south. These rural assets comprise about 45 percent of CFO’s more than $250-million asset base. The organization has a dedicated department whose members travel the Ozarks working with local foundation boards to build philanthropic assets and improve the quality of life.

Certainly, the Ozarks is a region better known for its culture of independence than its wealth. A number of Ozarks counties share traits similar to Appalachia and the Mississippi Delta, both areas of persistent poverty. There also is a long legacy of being tied to the land and a pride in the communities they call home. It is those positive attributes that CFO tries to build on. After two decades of working in the rural Ozarks, the CFO has built a knowledge base regarding what resonates in these communities and how the area’s limited resources can be used for the greatest impact.

Nearly six years ago, the Rural Schools Partnership was launched in conjunction with the Rural School and Community Trust based in Washington, D.C. The CFO recognized the strong tie between the health and pride of the local school system and the vibrancy of the community. Towns decline when school systems consolidate and children have to travel hours by bus each day to a different community. School activities bring rural communities together. The CFO’s position is that strengthening local schools will contribute to a more viable community. Efforts were focused on helping districts create local school foundations to build alternative financial assets; promoting place-based learning through leadership and grants; and training a new generation of rural teachers through the nationally recognized Ozarks Teacher Corps scholarship program. Approximately 110 school districts now work with the CFO in some capacity.

The organization’s most recent effort to build rural community assets may turn out to be CFO’s most important work so far. In 2013, the Alliance of Missouri Community Foundations used member funds and a generous USDA grant to engage the Nebraska-based Center for Rural Entrepreneurship to conduct a statewide, county-by-county Transfer of Wealth (TOW) study. Although other states have successfully used such studies, it was initially found to be cost-prohibitive to commission one just for the CFO’s service area. By pooling matching funds for the USDA grant, valuable information is now available to every Missouri community foundation.

The United States will experience the largest transfer of wealth in history over the next several decades. TOW occurs when people pass along their assets upon their demise to their heirs. The implications for rural communities are significant, as children have become the largest export for many small towns. When they leave, their families’ wealth typically follows. Without deliberate and thoughtful estate planning, small towns can lose generations of legacy in a relatively short amount of time.

The TOW data is based on 2010 household net worth provided by the Federal Reserve Board and the Survey of Consumer Finance Report, and uses census data to estimate population growth, age and trends. The results are compelling.

Over the next 50 years, TOW in the U.S. is estimated to be $75 trillion. During a 10-year timeframe, the estimate is $6.2 trillion. For Missouri, the TOW is $1.5 trillion and $135 billion for similar time periods. For the Ozarks region, that equates to $565 billion and $47 billion.

The key for rural areas, then, is to capture some of that TOW to benefit the community through planned giving. The Alliance of Missouri Community Foundations advocates “The 5% Solution,” which encourages residents to consider leaving five percent of their estate for charitable purposes. If just five percent of the TOW can be captured, it could be transformative. In Missouri, the five-percent capture would be $75 billion over 50 years, $6.7 billion in 10 years. These are philanthropic resources that can be used for education, the arts, social services or numerous other quality-of-life issues.

The impact is even more evident at a countywide level. For example, consider Carter County in south-central Missouri. Its estimated per-household net worth in 2010 was $126,000, which is 42 percent below the statewide average. Total charitable contributions for that county in 2012 were just over $508,000, according to IRS statistics. The five-percent capture of the 10-year TOW would total about $5.8 million, or roughly $580,000 annually. That would more than double the available resources to tackle countywide issues in Carter County. These are local resources for local people to address local issues—can there be any more effective solution than that?

The next several decades are going to be critical for rural areas. Those who thoughtfully and deliberately capture the TOW for their communities will do better than those who see such resources leave their regions, never to return. Each day the discussion of this issue with residents is delayed, professional estate advisors and community leaders risk more wealth going elsewhere.

We should continue to have a meaningful dialogue on how best to preserve all that is good about rural America, and develop better public policy and resources to help communities and regions remain viable. However, we must capture those resources that are right under our noses, and use them wisely to help ourselves. The future depends on us.