Helping People to Become Better Consumers of Estate Planning
Four reports describe the main estate tax issues to help families ask informed questions of accountants, lawyers, and tax advisors
“I want to help people be better consumers of estate planning,” says attorney
Joe Hawbaker. Joe and University of Nebraska Lincoln Extension Farm Transfer Specialist
Dave Goeller work with farm and ranch families planning their estates. Many of these families hope to transfer farm businesses or property to heirs, to the next generation of the family, or to an unrelated new farmer/rancher.
However, most farmers/ranchers are generally unfamiliar with the tax, legal, income, and fairness issues of these transfers. Not surprisingly, few retirement-age farmers/ranchers have faced up to these issues. Iowa researchers found that two-thirds of senior farmers had no retirement plan in place.
Since the interactions between the main estate issues – income tax, capital gains tax, and long-term care funding – are legally complex and the consequences of poor decisions can be serious, Joe recommends working closely with a tax advisor to devise the best plan for each farm family’s goals and resources. But he and Dave developed several publications to help families ask informed questions of their lawyers, accountants, and advisors.
Four estate planning publications for this purpose are now on the Center’s website
to read or download. These were used at a series of workshops in Nebraska last winter sponsored by the Center and funded by the North Central Risk Management Education Center.
Long Term Care defines the topic, presents statistics of nursing home stays, estimates costs of nursing home care, and discusses strategies for funding long term care, including an introduction to Medicaid.
Medicaid: Planning for Long Term Care in the Farm and Ranch Context describes Medicaid eligibility and estate planning tools that preserve Medicaid benefits. Particular attention is paid to Medicaid’s rules on income, sale of assets near the time of Medicaid enrollment, and limits on spousal impoverishment.
Ownership Structures for your Farm or Ranch: Some Basic Considerations describes the business legal structure of sole proprietorship, partnership, corporation, and Limited Liability Corporation (LLC). Each is discussed in terms of how it is owned, formed, and managed; how profits and losses are allocated and distributed; how ownership is transferred; and how it is ended.
Piercing the Corporate Veil: How Limited is the Liability of Doing Business as a Corporation? describes the reasons and instances when courts pierce the ‘corporate shield’ of incorporation to hold the business’ officers liable for debt. Particular attention is directed to instances involving child support or dishonest business transactions.
Joe and Dave are available for free consultation through Farm Legal and Financial Clinics funded by the Nebraska Department of Agriculture’s Farm Mediation program. The Nebraska Rural Response Hotline, 800.464.0258, schedules the clinics around the state.
The two experts cover only eastern Nebraska while other advisors serve other locations. Dave is also available through his University office at 402.472.0661.
To find out what help is available outside of eastern Nebraska and in other states, contact
Wyatt Fraas in the Center’s Hartington, Nebraska office, 402.254.6893 or
wyattf@cfra.org.
Ethanol & Crop Residue
In last month’s newsletter we raised the concern that removing crop residues for use in ethanol production could reduce soil organic matter levels.
Soil scientist Wally Wilhelm, with the USDA Agricultural Research Service laboratory in Lincoln, Nebraska, helped shed some light on the subject. He has reviewed years of research that touches on the question.
Wilhelm says that we don’t know with certainty how much residue could be removed without reducing soil organic matter levels, but based on the research, his best guess is that in most instances we would need to leave from one-half to two-thirds of crop residue to maintain soil organic matter levels.
Higher organic matter levels are associated with more productive soil and increased soil water holding capacity, which contributes to drought tolerance. In addition, increasing soil organic matter levels reduces atmospheric concentration of carbon dioxide – a “greenhouse gas” that contributes to global warming and climate change.
Young People Most Overlooked Population in Small Town Survival
How do we recognize children’s assets and enrich their futures and ours; a new series of articles will focus on answers
In community development, we recognize the importance of youth. Every town meeting acknowledges the critical role of youth, but they are often the most overlooked population in the equation of town survival.
In education, rural schools are frequently targeted for closure, as they are deemed inefficient or too expensive to run. Forty-nine percent of children in the U.S. attend rural schools, and statistics have proven that youth excel in small rural schools compared to their large urban counterparts. But this has not been enough to argue with economics.
Ironically, even though youth excel in these schools, statistics show rural school teachers are not as educated as their urban counterparts. There is less diversity, less experience, longer hours, less compensation, and a younger set of teachers. So why are they succeeding?
Another issue at the heart of our dilemma – rural young people are more likely to live in poverty than their urban counterparts. It takes 16 percent less on the average to live in rural areas than in urban areas, yet this does not make up the gap in actual dollars earned.
In 2000, median household income was $32,837 compared to $44,984 in metro areas, a 27 percent difference. The reality is unmet needs in families, with children going without adequate medical care, clothing, and nutritious food. When family income falls short, children’s basic needs are often neglected. Little Suzy won’t get the braces she needs or little Billy won’t get eyeglasses.
A key point in this discussion is that poor families in rural areas are often less likely to receive public assistance than those in urban areas. Isolation and the stigma of receiving handouts put these families at risk. Further, many distrust our government and other institutions designed to support them.
During the next few months, we will examine options and examples of what children in rural areas need, particularly those in poverty. How do we recognize their assets and find ways for them to flourish? Studies by the National Academy of Science show the more assets children possess, the greater the likelihood they will grow into successful and healthy adults.
The biggest key in this development is support of the community. We will look at rural communities and how they work with youth to overcome barriers associated with living in rural areas.
Contact: Michael L. Holton, michaellh@cfra.org
or 402.687.2103 x 1015 for information.
Symposium on Systems Research in Sustainable
Agriculture
Research that explores whole systems in agriculture and interactions between the social and natural sciences will be explored in a special symposium planned by the Committee on Organic and Sustainable Agriculture (COSA) and the Agronomy Society of America Division A-8.
Symposium themes emphasize:
- participatory approaches involving farmers and ranchers,
- research approaches that combine natural and social sciences, and
- efforts to develop multifunctional agricultural systems.
The symposium is also a tribute to Benjamin R. Stinner, former Kellogg Chair in Agroecosystem Management at Ohio State University and one of the pioneers of agroecosystem ecology.
Organizers are seeking invited speakers and volunteer papers and posters fitting the proposed themes. Anyone interested in participating as a speaker or poster presenter, please contact Patrick Bohlen at
hlen@archbold-station.org or 863.699.0242. Authors need to submit an online abstract by May
9.
To submit your idea, go to http://a-c-s.confex.com/a-c-s/2006am/index.htm
and choose A8 as the first choice Division of Interest, then follow the step-by-step submission process. For more information, contact Center staff member Kim
Leval, kimleval@qwest.net or 541.687.1490.
CORPORATE FARMING NOTES
Federal court decisions over anti-corporate farming laws have not deterred states in regulating industrial-style livestock production
>> Many so called “experts” have recently opined that the days of anti-corporate farming laws are numbered. This opinion stems from an over-simplified analysis of the fact that a federal judge struck down South Dakota’s anti-corporate farming law, commonly known as Amendment E, and that Nebraska is appealing a federal judge’s order striking down Initiative 300, the state’s constitutional prohibition of corporate farming.
But anti-corporate farming laws, ordinances, and related policies do not seem to be waning, numerically at least. In Pennsylvania, 12 townships and five counties passed anti-corporate farming legislation. In North Dakota, three counties recently adopted rigorous guidelines for industrial livestock facilities in response to efforts to site large operations there.
And while states such as Iowa and Illinois eliminated the rights of counties to use zoning to exercise some control over the type of livestock production in their jurisdiction, in other states like Nebraska and North Dakota, zoning is alive and well. In fact, it is on the increase in North Dakota.
In Missouri, local battles over industrial livestock operations continue to rage. Fourteen counties have passed ordinances restricting the expansion of industrial operations. Nine more counties are exploring similar ordinances.
In Macon County, Missouri, county commissioners approved a health ordinance in late December severely limiting siting of additional industrial operations in the county. Macon County Commissioner
Craig Jones said, “One thing that scares citizens to death is to be told that you’re going to be living 3,000 feet from one of these operations. I’ve lived here 50 years, and I don’t want to be run out by one of them.”
The response of certain agricultural interests was swift and severe, including suggestions that counties restricting livestock facilities might be denied investments in new ethanol and biodiesel plants and pressure on the Missouri Legislature to take away counties’ rights to zone livestock confinements.
“Farmers are not effete, tailpipe sniffers,” said Missouri Attorney General Jay
Nixon, supporter of the local ordinance effort. “When they complain, it’s real.”
Contact: John Crabtree, johnc@cfra.org
or 402.687.2103 x 1010 for more information.
National Rural Action Network Announces Advisory Appointments
The more people hear about the idea of a National Rural Action Network, the more the excitement grows! We’re completing appointments to the Advisory Committee.
Kathie Starkweather, the Center’s network director, expects to add 2 to 3 more key people. Advisory Committee members thus far:
John C. Allen, Ph.D., is Director of the Western Rural Development Center (WRDC) at Utah State University. John previously served as Director of the Center for Applied Rural Innovation at the University of Nebraska.
Michael D. Wisdom is Executive Director of the San Luis Valley Development Resources Group, Inc. (SLVDRG) located in Colorado. Michael believes in developing existing human capital within an environment, and prefers sustainable and compatible jobs created on value-added principles.
Patty Clark is Director, Ag Marketing Division and Community Development Division, Kansas Department of Commerce. She served as Director of the Public Policy Division of the Kansas Farm Bureau and is a partner in a third generation family farming and ranching operation in southeast Kansas.
Jim French is a fifth-generation farmer and rancher in Reno County, Kansas. He is Lead Field Organizer for Oxfam America and worked as a communications specialist and policy analyst for the Kansas Rural Center.
Ralph Paige is Executive Director for the Federation of Southern Cooperatives/Land Assistance Fund. He has dedicated his life’s work to proving that cooperatives can be used to enhance incomes and improve quality of life for black family farmers and rural low-income families.
Scott Fry, Idaho, is a former field organizer for the Dakota Resource Council. He grew up on a family owned cow-calf operation in Idaho.
Jim Kleinschmit is Rural Communities Program Director for the Institute for Agriculture and Trade Policy (IATP) in Minneapolis, Minnesota. Jim grew up working with his family on their sustainable farm in Northeast Nebraska.
Andrea Colnes is Policy Director for the Northern Forest Center (Vermont, New Hampshire, New York, and Maine). She served as Executive Director of the Northern Forest Alliance and was a founder and board member of “Americans for Our Heritage and Recreation.”
Kay Decker, Ph.D., is founder and Director of Freedom West Community Development Corporation, a nonprofit focused on rural community development in northwest Oklahoma. Kay also chairs the Social Sciences Department at Northwest Oklahoma State University in Alva, Oklahoma.
Mark Trechock is Director of the North Dakota Resource Council, a nonprofit, grassroots activist organization.
Contact: Kathie Starkweather, kathies@cfra.org
or 402.687.2103 x 1014.
New Book Portrays Quest for Profitable Beef Markets
Jan and Will Holder took the reins of the family’s ranch in 1992. As profits eluded them, they realized, “No matter how hard we worked, the ranch was never going to make it on its own. The beef industry had changed. How could we possibly compete?”
How to Direct Market Your Beef, the newest title from the Sustainable Agriculture Network (SAN), tells how the Holders launched a profitable, grass-based beef operation focused on direct-market sales. The 96-page book includes information about processing, labeling, packaging, sales outlets, and marketing basics.
Features on other successful agricultural entrepreneurs are included as well. The author, a former public relations expert, takes a light-hearted, humorous approach to describing their experiences. Yet others can learn from what worked and what didn’t.
How to Direct Market Your Beef is one in a series of resources available through SAN, the outreach arm of SARE, a national sustainable agriculture competitive grants program. For more information about grants and other resources available through SARE, visit
www.sare.org. You can download a complete free copy of How to Direct Market Your Beef at
www.sare.org/publications/beef.htm. To order print copies ($14.95 plus $5.95 s/h) visit
www.sare.org/WebStore or call 301.374.9696.
Organic Food and Farming Statistics
The Midwest needs more organic producers. That was the call issued last month by leaders in the organic farming community at the 17th annual Upper Midwest Organic Farming Conference. The Midwest Organic and Sustainable Education Service (MOSES) shared the following organic farming facts from their conference.
Consumer Demand
- The Organic Trade Association estimates that U.S. consumer demand for organic food has been growing at 20 percent per year for the last 15 years.
- A Consumer Reports survey in 2005 showed that nearly two-thirds of U.S. consumers bought organic products in the last year.
- A Whole Foods Market national survey completed in August 2005 found that 65 percent of Americans had tried organic foods and beverages, up from 54 percent in surveys conducted in 2003 and 2004.
- The Nutrition Business Journal projects U.S. organic food sales will continue to grow at 10-15 percent per year ($2 billion additional sales per year) from 2006 to 2010.
On-Farm Financial Benefits
- The base pay for organic milk is $20 to $23 per hundredweight vs. $13 to 15 per hundredweight for non-organic milk, or about 50 percent higher.
- Farmers raising organic corn and soybeans sell their product at two to three times the price of their conventional counterparts. On February 15, Cashton Farm Supply (WI) was paying $5/bushel for organic corn, three times more than they were paying for non-organic corn ($1.73). Organic soybeans were being sold there for $12 per bushel, more than twice the price of non-organic beans ($5.19).
- The net income in 2004 for organic farmers in Wisconsin was 25 percent higher than non-organic farmers.
Wisconsin, Iowa, and Minnesota Comparisons
- Nationally, Wisconsin is #1 in organic dairy farms, #1 in organic livestock, and #2 in organic corn.
- Minnesota is #1 in organic corn and soybeans produced; Iowa is #3 in organic corn and #2 in organic soybeans.
Source: Compiled by Doug Nopar, MOSES, 507.450.7458,
www.mosesorganic.org
Join the Organic Farming Conversation in Lincoln, Nebraska
On April 20, the University of Nebraska Press will hold a free, public literary salon about the recent book
Good Growing: Why Organic Farming Works by Leslie A. Duram. The Press expects a lively and engaging session.
“With its comprehensive view of the status of farming and its compelling portraits of organic farmers, Good Growing describes a course of action to improve the health of agriculture in our day.
“Salon co-hosts Chuck Hassebrook, University of Nebraska regent and the Center’s executive director, and
Jim Bender, Nebraska organic farmer and author of Future Harvest: Pesticide-free Farming, will lead a lively discussion of the book and issues related to organic farming.
“All participants will have the opportunity to engage with the co-hosts and one another in what is sure to be a spirited conversation. Organic refreshments will be served.”
The salon will be held from 5:30 to 6:30 p.m. at the Lincoln Woman’s Club, 407 S 14th Street. Off-street parking is available behind the building and in the adjoining church lot. For more information, contact
Erika Kuebler Rippeteau, 402.472.1660 or erippeteau1@unl.edu.
Fey Honored with Agriculture Stewardship Award
Center for Rural Affairs board member Lowell Fey received the Nebraska Sustainable Agriculture Society’s 2006 Agriculture Stewardship Award at the Rural Advantage/Healthy Farms Conference. An atomic physicist retired from a long career with the National Bureau of Standards, Lowell is a longtime member of NSAS.
Born in Otoe County and raised near Unadilla, Nebraska, Lowell remembers helping his grandfather, father, and uncle to farm. He has been disturbed to see current agriculture so far removed from the diversified farming that he remembers from his childhood.
Several years ago, Lowell became owner of Orchard Hill Farm, a property that has been in his family for nearly 105 years. He is developing a diversified whole farm plan for the property and is excited about the potential for a small, organic dairy operation.
Currently, Lowell and the farm’s resident farmer, Chuck Porter, are looking into the viability of the dairy (cattle and goat), a cheese-making venture, and an on-farm bakery (using grains from the farm).
If feasible, these operations will join with the market garden that Porter has already established on the farm. Lowell has committed to developing Orchard Hill Farm into a model for sustainable agriculture so others can learn and see the value of sustainable agriculture stewardship.
NSAS is a nonprofit member organization with a mission to promote agriculture and food systems that build healthy land, people, communities, and quality of life, for present and future generations. Find out more at their website,
www.nebsusag.org .
Source: Thanks to NSAS for contributing this article about Lowell Fey.
Farmers’ Markets Promotion Program Grant Funds
USDA’s Agricultural Marketing Service (AMS) announced availability of $1 million in competitive grants for the new Farmers’ Market Promotion Program (FMPP). The program increases domestic consumption of agricultural commodities by expanding direct producer-to-consumer marketing opportunities.
Eligible applicants include: Agriculture cooperatives; local governments; nonprofit corporations; public benefit corporations; economic development corporations; regional farmers’ market authorities; and tribal governments. Individual agricultural producers, including farmers and farmers’ market venders, roadside stand operators, community supported agriculture participants, and other individual direct marketers are not eligible to apply.
The maximum grant amount is $75,000 and applications are due May 1, 2006. Please contact
Traci Bruckner or Mike Heavrin at the Center for Rural Affairs for more information, 402.687.2100 or
tracib@cfra.org or mikeh@cfra.org.
Recipe of the Month: Toasted
Coconut Cake
We are happy to introduce a new section to the newsletter this month featuring a seasonal recipe. “Sister Janice” is our Administration and Organizational Development Director
Barbara Chamness’s sister, who lives in Dallas, Texas. Barbara is a fabulous cook, and we hope you enjoy her offering.
You can tell her first-hand about your results at 402.687.2103 x 1009. Also please share your own recipes for upcoming editions of the newsletter. Call us at 402.687.2100 or email recipes to
info@cfra.org. Happy Eating!
Sister Janice’s Famous Toasted Coconut Cake for Easter
1 (18.25 oz.) package white cake mix without pudding
1 (3 1/2 oz.) package vanilla instant pudding mix
1 1/3 cups of water
1/4 cup vegetable oil
4 eggs
1 1/3 cups flaked coconut
1 cup chopped pecans or walnuts
Combine cake mix, pudding mix, water, oil, and eggs; beat 4 minutes at medium speed of an electric mixer. Stir in coconut and pecans.
Pour batter into 3 greased and floured 9-inch round cake pans. Bake at 350 degrees for 17 to 20 minutes or until a wooden pick inserted in center comes out clean. Cool in pans 10 minutes; remove layer from pans, and let cool completely. Spread Coconut Cream Cheese Frosting between layers and on top and sides of cake. Sprinkle top with 1/2 cup toasted coconut reserved from frosting recipe. Yield: one 3-layer cake.
Coconut Cream Cheese Frosting
Buy two different brands of cream cheese icing. Mix together
2 tablespoons butter or margarine
2 ˝ cups flaked coconut
Melt 2 tablespoons butter in a large skillet; stir in coconut. Cook, stirring constantly, over medium heat until golden brown.
Combine cream cheese icing with 2 cups of toasted coconut; reserve 1/2 cup of coconut for garnish. Yield: enough frosting for 3 layer cake. Sprinkle with remaining coconut. Note: Refrigerate cake several hours or overnight for easier slicing.
Value Added Agriculture: Doing It Right for Rural Communities
Policymakers must commit to a balanced approach with value added development for it to really increase rural citizens’ prosperity
Valued added agriculture can help create a better future for Rural America – if it is done right and as part of a larger development strategy. But to capture its full potential, we need to ask some core questions.
Who Will Own It? Profits flow to owners. Locally-owned initiatives are better for communities than absentee ownership. We expect pharmaceutical crop production will mostly be on company-owned farms, where the company minimizes liability by ensuring security standards are met. That does not offer much benefit to rural communities.
The ownership question is also important in wind power and biofuels. Government maximizes community benefits by creating incentives for local ownership.
Will It Become a Cheap Commodity? Many farmers want to move beyond production of cheap commodities. Ethanol plants can help by raising the local basis for commodity prices, but corn or switchgrass sold to an ethanol plant is still a commodity and still pretty cheap. And ethanol itself can become a cheap commodity.
Farmers can move beyond commodity production by adding value on their farm through application of knowledge and management. Premiums for organic grains and natural hogs have been more durable than premiums for white corn because it takes a higher level of management to produce natural products. Anyone can plant a different seed, but complex new management systems keep out competitors and protect premiums.
Will the Benefits be Equitably Shared? Broadening the middle class strengthens communities. As more people gain genuine opportunity, they gain a stake. They are able to put down roots and become contributing community members.
The wage structure of ethanol plants has been beneficial, in that regard. Even the lowest paying jobs in ethanol plants have been good jobs that generally pay higher than much of the local pay scale. They’ve helped build a middle class.
It’s also important to broaden opportunities for ownership. If the investment requirements limit ownership to the very wealthy members of a community, the project will contribute less to community vitality than value added initiatives with low capital costs that broaden ownership opportunities. For example, modest capital costs for natural pork production enable beginning farmers to get started as owners. That is good for communities.
Is It One Piece of a Bigger Puzzle? Most important, value added agriculture must be just one part of a broader approach to rural revitalization aimed at making our communities more attractive places to live, engaging youth, developing new leaders, and fostering small business development.
Policymakers must commit to a balanced approach to rural revitalization. As part of that, value added agriculture done right can make a worthy contribution. But if policymakers allow it to crowd out all other investments in our future, we will fall short.
Agree or disagree? Send your opinions or comments to Chuck Hassebrook, 402.687.2103 x 1018 or
chuckh@cfra.org.
FEATURE ARTICLES:
The Case for a New Farm Bill: Reverse Misguided Federal Policies
The next farm bill offers America a choice. We can continue the misplaced federal priorities that are destroying rural communities, or we can invest in creating a future in Rural America. The debate is starting.
If rural people and their representatives lead, we can create a better rural future. Practical strategies will work to revitalize 21st century rural communities. But local initiative must be matched by federal policies that support rural revitalization rather than hinder it.
The current farm bill is fundamentally flawed. Under its terms, the bigger the farm, the more money it gets. That creates three perverse consequences:
- The farm program subsidizes mega farms to drive smaller operations out of business by bidding land away from them.
- Because large, aggressively expanding farms get more money for every acre they add, they bid every nickel of farm payments into higher rents and land prices. Thus the farm program does nothing to improve income of farm operators, except on land they previously owned. It just passes more money through their pockets. The higher land costs close the doors of opportunity to beginning farmers.
- Because so much is wasted on subsidizing mega farms to drive their neighbors out of business, little money is left to invest in initiatives that create a future in rural America and protect the land and water.
Cuts in rural development and conservation programs since passage of the previous farm bill illustrate the last flaw. Those cuts have closed the Conservation Security Program, which pays farmers according to how well they protect the environment, to watersheds comprising 83 percent of the nation’s producers. It was supposed to be open to all the nation’s good agricultural stewards. Moreover, at the current rate it will take 36 years for the program to be opened to farmers and ranchers in all watersheds.
Worse still, ninety percent of the new money promised for rural development by the last farm bill has since been cut in order to meet budget targets while keeping mega farm payments intact.
But we do not have to choose between having effective farm programs and effective rural development programs. We just need a reasonable balance between spending on immediate income support and investment in our future. And it can be accomplished through sensible reforms that make farm programs work better.
The single most effective thing Congress could do to strengthen family farms is to close payment limitation loopholes and stop subsidizing mega farms to drive smaller farms out of
business.
A more effective payment cap that cut farm program costs by just eight percent would free up funds to more than double overall spending on rural development and finance a ten-fold increase in support for rural small business development. It would provide rural people the support they need to shape their own destiny and restore vitality to their communities.
The key is to invest in the entrepreneurial initiative of rural people. Businesses with five or fewer employees account for most of the employment growth in rural farm counties. Yet the federal government invests little in rural small business development. The next farm bill could change that.
The farm bill should also support community initiative. Communities that nurture new leaders, engage their youth, support entrepreneurship, and invest their own resources in community development will find a way to thrive. The federal government should invest matching funds.
The next farm bill should also foster agricultural entrepreneurship. Over half of consumers say they will pay a premium for food produced by environmentally responsible small and mid-size farms. Consumers trust small farmers over corporate farms by more than 2:1 to produce safe food responsibly.
These new markets could revitalize family farms and launch a new generation of beginner farmers – if the federal government helps by investing in market development, cooperative development, research on innovative practices that fit consumer demand, and training and capitalizing beginning farmers.
Finally, the next farm bill should reward farmers and ranchers who go the extra mile to protect our natural resources. Past farm bills have penalized them for replacing program crops with resource conserving crops.
The debate now starting over the next farm bill offers us the opportunity to take control of our destiny and chart a different course. If we continue the current misguided federal policies, we’ll continue rural decline. But it does not have to be that way.
The new farm bill will be largely written by members of Congress from rural states – members we can influence. It is our opportunity to shape our destiny.
We will present our detailed proposals for the 2007 farm bill in the next three months, including the Rural Development, Research, and Conservation Titles.
HomeTown Competitiveness: A Come Back/Give Back Approach
Maybe you’ve heard of the HomeTown Competitiveness Program (HTC) in your corner of the world lately. HTC provides an approach that goes beyond the traditional vision of economic development by presenting a come back/give back approach to rural community building.
Combining decades of experience in rural development, four Nebraska-based organizations, including the Heartland Center for Leadership Development, the Nebraska Community Foundation, the Center for Rural Entrepreneurship, and the Center for Rural Affairs, and several other partners, are focusing on four strategies that are essential and workable in most rural communities, yet are usually underdeveloped.
HomeTown Competitiveness (HTC) encourages communities to take immediate action in four strategic areas:
- Mobilize Local Leaders
- Capture Wealth Transfer
- Energize Entrepreneurship
- Attract Young People
HTC is drawing significant attention in Nebraska and nationally because rural leaders and practitioners recognize that even the most distressed community has each of the necessary elements to launch an HTC approach. What differentiates HTC from many other development efforts is that it focuses primarily on internal resources and assets. The goal is to assess where a community is, here and now, and to build on the current capacity of each of the four elements.
When a community engages in the HTC process, a steering committee of willing volunteers is established who will direct and organize the action plans for the community around the four strategic areas. Community task forces are formed to employ efforts to implement strategies to meet goals established for each area.
We believe the HTC approach offers hope for communities being swept away by change: change that has caused severe out-migration, growing levels of poverty, and the flight of youth. By targeting leadership and community capacity building with focused entrepreneurship efforts, and encouraging local philanthropy to support ongoing economic and community capacity building, communities can build for themselves a successful and healthy future.
1. Mobilizing Local Leaders
For small towns to compete in the 21st century they must tap into everyone’s potential knowledge, talent, and aspirations. The Heartland Center for Leadership Development rejects the outdated notion of relying on “the usual suspects” to get things done. Rural communities must be intentional about recruiting and nurturing an increasing number of women, minorities, and young people into decision-making roles. They need continuing leadership training programs, because today’s leadership must constantly reinvent itself to reflect the challenges of a changing global environment.
2. Capturing Wealth Transfer
The Nebraska Community Foundation has completed wealth transfer analysis for each of Nebraska’s 93 counties. Rural residents do not always recognize local wealth because so much of it is held through land ownership. Most people are at first shocked, and then highly motivated, once they understand the enormous amount of local wealth that will likely transfer to heirs who have migrated out of the area.
In rural Nebraska alone, more than $94 billion is at stake over the next few decades. Both the power and the will to use these assets will no longer be tied to the community unless planned gifts are cultivated now. Using this data, HTC targets conversion of at least 5 percent of local wealth transfer into charitable assets endowed in community foundations to fund future community and economic development efforts.
3. Energizing Entrepreneurship
Far too many rural communities continue to invest resources in economic development for job creation and business development that exports, rather than builds, local wealth. The Center for Rural Entrepreneurship and its partners such as our REAP program, encourage communities to become actively involved in nurturing local enterprise in three areas: 1) saving Main Street and other key businesses through planned ownership succession, 2) creating new wealth and good jobs by helping entrepreneurial companies that have the potential to break-through to a broader product line and/or a larger market, and 3) using local charitable assets to support entrepreneurship.
4. Attracting Young People
It is not just the call of the city that impels them; it is also the lack of opportunity and encouragement to “come back” that drives young people away from their hometowns. HTC has developed a formula that small towns can use in their efforts to halt this trend. Using existing data on population change, the formula provides small towns with realistic goals for youth attraction.
HTC teaches people how to target youths for attraction, create career opportunities through business transfer and entrepreneurial support, and nurture a sense of ownership and vested interest in the community’s future leaders.
You can find more about HTC at www.htcnebraska.org
. Glennis McClure, REAP co-director, and Chuck Hassebrook, the Center’s executive director, currently serve on the HTC Management Team. Michael
Holton, ROSP director, is a community development specialist for the Center and for
HTC.
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