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The past year should have destroyed any illusions that government support will renew Indiana’s disinvested communities. The combination of federal agency chaos, major program cuts and a $1.5 billion reduction in property tax revenue to cities over the next three years (caused by Indiana Senate Enrolled Act 1) will significantly reduce public funding for even basic services.
These factors will leave little funding to address big community challenges like housing shortages, disinvested downtowns and deteriorating amenities such as public arts, parks and trails. Research from economists such as Ball State University’s Michael Hicks has demonstrated that local quality of life will increasingly determine future community economic strength. Given reductions in public funding, our towns and neighborhoods will depend on local leaders mobilizing local resources and partners to implement renewal strategies.
Thankfully, Indiana has a robust network of local foundations that are moving the needle on quality-of-life transformation. Indiana is the only state where all counties—92 of them here—are served by their own community foundations. These foundations have cumulative assets of approximately $7 billion, in large part due to eight rounds of grant and capacity building support from the Indianapolis-based Lilly Endowment starting in the 1990s. Each of these community foundations is led by an independent board of local representatives who choose how to invest their assets and where to give grants drawn from their investment returns.
While community foundations traditionally give modest grants to local causes like university scholarships and after-school programs, they have recently begun to deliver creative local solutions to big challenges. The Unity Foundation of LaPorte County is leveraging a recent Lilly Endowment grant of $3.6 million to support the construction of several affordable housing projects, upgrading local permitting systems to speed up approvals and creating incentives for the renovation and construction of homes. Other community foundations are leveraging similar grants to enhance parks, expand child care options and build skills training programs to connect residents with living-wage job pathways.
While community foundations typically invest their assets in Wall Street stocks and funds, a growing number are expanding their impact by investing their capital into local economic development. The Wayne County Foundation is leading the way in this work with a multimillion-dollar investment in the purchase of deteriorated downtown Richmond properties by a revitalization trust, systematically restoring them to excellent condition and use. The Sagamore Institute’s Building Better Communities initiative—of which my Interurban project is a member—is providing technical support for this work to the Wayne County Foundation and seven other institutions across the state that are collectively pursuing more than $50 million in redevelopment financing.
Ambitious community foundation investments like these also could unlock support for local efforts from almost $5 billion in projected 2025 grantmaking by Indiana’s robust array of private foundations. The Lilly Endowment is the nation’s largest private foundation, with $80 billion in assets and projected 2025 grantmaking of $3.6 billion. Indiana is also home to 1,341 additional foundations, with 2023 assets of $15.7 billion and annual giving exceeding $1 billion.
One of the greatest challenges faced by foundation leaders is finding projects and programs that both align with their missions and generate significant impact. Hoosier cities and towns are beginning to invest their local philanthropic assets into transformative changes in their communities that could attract and maximize the grant investments of Indiana’s larger foundations.
Indiana communities have the resources to more than offset federal and state funding cuts if local leaders invest in transformative projects that maximize the benefit of our abundant philanthropic resources.•
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Bill Taft is director of Interurban at Indianapolis-based Sagamore Institute. Send comments to [email protected].
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