The early 1980’s ushered in a second Gilded Age, which resulted in the minting of a new class of wealthy sprung from the tech and finance industry. Whereas once a great deal of wealth was concentrated into only a few major metropolitan areas such as New York, Boston, Chicago and the Bay Area, the second Gilded Age saw vast pockets of wealth being distributed more evenly across the country. This change in wealth distribution has led to a very interesting trend occurring in US philanthropy today.
In the past, major philanthropic contributions have largely gone to charities and organizations located in major metropolitan centers. Generally, the same areas where these major givers were located. Now, with that being spread across the country, more and more philanthropic giving is happening in smaller urban centers and even rural areas of our country.
Distribution of Wealth Equals Distribution of Philanthropy
While the Forbes 400 list is home to several business tycoons who came into money as a result of more traditional industries like real estate, healthcare, energy, manufacturing or hospitality, they aren’t all centrally located into a few small regions like days gone by. For instance, the state of Colorado is now home to almost a dozen of America’s wealthiest cloistered within the state’s small borders, while Midwestern states like Wisconsin boasts several within its borders and even the meagerly populated state of Arizona has recently seen its fair share of wealthy entrepreneurs.
The Wealth Begins to Spread
While the industry’s elite have more than their fair share of philanthropic dollars to spread around, they are not the only individuals capable of creating real change with their financial largesse. In a report published by Wealth-X last year, there were in excess of 73,000 individuals of “ultra-net-worth” as they reported. “Ultra-net-worth” was defined as people possessing liquid assets in excess of $30 million. While the largest concentrations of these people were still found in the more traditional metropolitan areas of Los Angeles and New York, there were plenty of individuals populating smaller urban centers in less populous states such as Arizona, Minnesota and Michigan.
This distribution of wealth goes a long way towards explaining how so many smaller universities and regional cultural institutions are suddenly finding themselves the beneficiaries of major contributions and with the ability to raise money in record amounts. For example, out of the 20 universities that received the most donations in 2017, 3 of them were state universities in Indiana, Ohio and Michigan.
North Carolina in particular has seen a steep influx of wealthy residents moving in. This is in part thanks to the developing Research Triangle centered on the Raleigh-Durham and Chapel Hill region, but Charlotte and Mecklenburg County have also become a major finance center.
Small Players Becoming National Powerhouses
This sudden influx of wealth goes a long way towards explaining why the charitable Foundation For The Carolinas (FFTC) has suddenly become one of the biggest philanthropic powerhouses capable of competing on a national level. Established in 1958 on the basis of a $3,000 gift from the United Way, the tiny little local foundation that could has developed into a mighty locomotive boasting a whopping $2.5 billion in assets in 2017.
Some of this is due to the influx of wealth into the region, but it also has to do with the strategy used by the foundation to acquire that wealth. About 5 years ago, the fund strayed from seeking the traditional donations of cash, stocks and real-estate and instead focused on local business owners who wanted to help their communities. One example of these efforts can be seen through a developer from Charlotte who started a sub-foundation through FFTC called the Crossland Foundation that is subsidized through the profits from his business.
Subsidiary foundations are making a huge difference and not just with aging donors looking to make an impact before they retire or a way to contribute after the fact. Even young companies like MapAnything are creating small subsidiary foundations and pledging percentages of their equity to them. In 2017, nearly 29,000 grants were issued by the FFTC, with more than $420 million of funding going out the door. Their assets gained them a 6th place position on the list of largest community foundations, but their grants and contributions earned them a 2nd place on that list.
Small Regional Affiliate Foundations as Distributors
Part of their success lies in their system of distributing resources via 13 regional affiliate foundations that concentrate their efforts on smaller cities and counties throughout the area. One of their most notable endeavors involved creating and funding the Opportunity Task Force to address some of the foundational issues that drove social tensions in the area following the fatal police shooting of Keith Lamont Scott in 2016.
Regardless of whether you reside anywhere in or near the Carolinas, the FTTC is a foundation worth watching. The FTTC serves counties located in both North and South Carolina and is one of only a few such institutions that can boast such a successful track record leading to its phenomenal growth rate. Grants are awarded in such diverse areas as education, animal welfare, disaster relief, environmental concerns and even to religious institutions. The foundation manages dozens of competitive grant programs in addition to the charitable funds of more than 2,600 individuals, families, businesses and non-profits.
In Your Area
Similarly to the FTTC in the Carolinas, every region of the country has begun or will start to see these types of foundations established in the area with more than enough regional wealth to keep them funded. This growing trend is exciting for all philanthropists due to the fact that giving back is easier than ever before and finding a home for your philanthropy should no longer take you on much of a journey ever again.
–Elena Kiam, Creative Director of the fashion jewelry brand, lia sophia