As the worst recession since World War II drags on, officials across the country are considering just about anything in hopes of shoring up sagging budgets. Nowhere is the problem more acute than in California where state coffers are $26.3 billion in the red. But the "Golden State" isn't alone. .
In Iowa, the state's Racing and Gaming Commission considered proposals this week from five largely rural counties that say casinos could give their struggling economies a much needed boost.
Whether rural casinos will work may depend on several factors, and could influence whether the commission approves licenses for five more casinos in a state that already is home to 17.
Officials withheld comment on the latest proposals, but did cite 1.4 billion in annual revenue from the state's currently licensed operations as proof of their success. And as Nancy Crowfoot explains philanthropists also are betting on casinos to help preserve local wealth….
In 2005, Iowa's 17 licensed commercial casinos paid more than $263 million in state gaming taxes. It was the first year that one-half of one percent of those revenues – or $5.4 million -- was designated to create grant-making and endowment building efforts in 85 counties that had no state gaming licenses.
A state County Endowment Fund Program disbursed $63,000 to each county. The foundations, established and governed by volunteers in the communities, were required to keep 25 percent in a permanent endowment, the principal of which can never be touched. 75 percent can be distributed to charitable projects within their county ... such as outdoor art for barns ... and computer software for a local historical museum.
The idea behind the creation of the county foundations was to give residents a place to donate -- or bequeath in their will – a means of holding some of their wealth in the county in which they lived.
Angela Dethlefs-Trettin, Director, Iowa Council of Foundations, Des Moines, Iowa: "And it's a wonderful opportunity for communities to really create a vehicle and say to citizens who live there or who have lived there and say, 'let's give back, let's make a difference in the places where you lived and have raised your families'."
Until the county foundations were created, few rural areas offered a place to stimulate home-town philanthropy with a focus on endowment.
As a result, much of the wealth accumulated by area farmers and other residents may have, upon death, transferred to heirs -- many of whom may have left town, or even moved out of state.
A five-year study of probate records by the Community Vitality Center at Iowa State University, revealed Iowans annually transferred nearly $5 billion. In central Iowa's Greene County-- the study showed $30 million dollars were transferred annually.
Rick Morain, Editor/Publisher, Bee & Herald Newspapers: "If we could capture just five percent of that, in a few years we'd have a huge endowment built up that we could use for improving quality of life and increasing economic development activity and so forth in this county."
In the Greene County Community Foundation's four-year existence, $236,000 has been raised both through funds generated annually from gaming tax revenues and from contributions by some 200 individuals. The individuals not only get a tax deduction, but are also eligible for a 20 percent state tax credit.
Jacque Andrew, President, Greene County Community Foundation: "What sweetens the pot is that tax credit that folks are eligible for if they contribute to an Endow Iowa Endowment. So that helps a lot."
As for giving money back to the communities in the form of matching grants, the 35-member Greene county board has awarded 71 grants totaling nearly $250,000. The money as gone toward, among other things, the cost of scoreboards for Little League in Jefferson, playground equipment in Rippey, and the installation of wireless broadband and new computer desks for the library in Churdan.
Lawrence Geisler: Board member, Greene County Foundation: "Well it's been a wonderful help to the town of Churdan. I live just outside it and it's a little town of about 400 people and other the two year period the town has received about $16,000 and that's a lot of money for a small town."
While these expenditures may not seem like a big shot in the arm there are some who envision the foundation exerting a much broader impact on the local economy.
Rick Morain, Editor/Publisher, Bee & Herald Newspapers: "For instance, I think the IRS laws will allow funds like that to be used for, for training, for economic development purposes, for an incubator if the foundation board decided to take a chance on economic incubator."
To finance such ventures will demand the county community foundation keep growing and will require residents like Alice Walters, to think ahead.
Alice Walters, Jefferson, Iowa: "When I turned 89 I thought I ought to update my will and things like that."
Walters donated $25,000 to the Greene County Community Foundation.
Alice Waters, Jefferson, Iowa: "This was county-wide and it would touch so many of the people that I had worked with in the Extension Service and just seemed like a good idea to do that."
While some residents have embraced the foundations, philanthropy isn't quite as successful in all of the 85 county foundations created with state gaming taxes. Several haven't grown much beyond their annual allocation from the gambling industry.
But while some counties see little, if any, growth in assets, the Iowa Council of Foundations points to the overall significant growth statewide.
Angela Dethlefs-Trettin, Director, Iowa Council of Foundations, Des Moines, Iowa: "...when we look at just even those 85 counties, so June of '05, they had about $16.6 million or so in total assets, a great start for all those 85 counties when you think about it."
Three years later, as of June 2008, there was over $40 million in assets in the 85 counties.
With numbers like that, many feel the use of state gaming taxes to jump start local philanthropy ... was worth the gamble.
For Market To Market, I'm Nancy Crowfoot.