On November 16, 1994, Montana Governor Marc Racicot invited representatives of national, regional and local philanthropic foundations, nonprofit agencies, private business, as well as active community volunteers who share a concern for the financial future of Montana to his home to explore the potential of endowed philanthropy to provide a secure future for Montana. (Endowed philanthropy simply means using endowments to support charitable purposes.)

The Conversation represented a conscious and deliberate effort to break Montana's pattern of fatalism established by decades of isolation, anticipation of failure, and history of victimization. The Governor chose to focus on endowed philanthropy because it appears to offer a tangible, practical, and achievable means for Montana to control its own destiny while renewing a spirit of giving and sense of community.

Participants at that first Conversation on Endowed Philanthropy agreed that endowed philanthropy provides an increasingly important vehicle to help Montana communities achieve the financial security to devise and implement their own best strategies and solutions. At the end of the Conversation, the Governor appointed a Task Force on Endowed Philanthropy whose role is to:

1. Provide the leadership for a thorough examination of options and recommendation of the proper roles for the State of Montana in promoting and encouraging endowed philanthropy.
2. Deliberate, prioritize, and help implement the best options for Montana.
3. Communicate its progress and findings to the Governor and to the people of Montana.
4. Establish a time line and assign responsibilities for accomplishing its work.

The Case for Endowed Philanthropy

Montana's present-day economy holds grim reminders of a history shaped by dependence and extraction, beginning with the itinerant fur trappers and gold miners and continuing through the more ambitious Silver Barons and Copper Kings who prospered personally from Montana's wealth of mineral resources. For the most part, these entrepreneurs did not consider Montana home -- they were here only to seek their fortunes and go home. Historically, the fortunes they amassed in Montana were exported out-of-state, where they generously endowed universities and museums and symphonies from coast to coast.

Deprived of its inheritance, Montana envies the heirs of the state's abundance. While wealth extracted from our state continues to enrich Minneapolis, Philadelphia, Baltimore, San Francisco, Boston, Atlanta and every other sentimental home of the early entrepreneurs, Montana, with so little wealth to call its own, is still struggling to establish a foundation for economic security. Montana has few major corporation headquarters, no well-established corporate endowments, no major private foundations, and no critical mass of population to provide adequate funds through charitable giving or taxes to meet our ever-increasing needs.

With few Montana-based major corporations or foundations, Montana must turn to individuals and government to help provide philanthropic resources for the future of the state. Meanwhile, government at all levels continues to shift responsibility back to local communities without providing tools to help communities assume control. Year after year, Montana's government agencies and numerous nonprofit agencies attempt to accomplish more and more with less and less. All too often, local charitable organizations and government agencies find themselves ill-equipped to respond to the extensive and varied needs of Montana's diverse communities.

Elsewhere in the United States, communities can look to local philanthropic institutions to help fill the gaps created as government at all levels shifts responsibility to local communities. But, Montana's philanthropic infrastructure is both under-developed and under-prepared to help.

Although Montanans are generous in many ways, among the fifty states, Montana ranks at or near the bottom with regard to per capita charitable giving, number of foundations, size of foundations, and value of foundation gifts granted and received. Montana is home to less than three-hundredths of one percent of all U.S. foundations. It ranks 48th in the nation in foundation assets and 49th in foundation giving. While individual Montanans and Montana businesses give generously for immediate needs, Montana lacks the permanent endowments, common in most other states, that can provide a perpetual funding stream for charitable purposes and create a cushion against catastrophe.

Montana's Endowed Philanthropy Task Force is promoting endowments as a way to build wealth for the state's future and help communities to maintain Montana values. Endowments provide a safety net of funds that can fill gaps as governments at all levels transfer more and more responsibility to local communities. Endowments can enable Montanans to take control of the future of their communities by creating permanent savings accounts that can be used for a wide variety of charitable purposes. Endowments continue to regularly generate money that communities and nonprofit organizations otherwise would not have money that might be used for scholarships, internships, special training, library books, research, day care, or any other charitable need or opportunity.

Endowments also can benefit donors. Donors can use endowed philanthropy to provide for their family and friends, receive maximum tax benefits, maximize contributions to charity or to the local community, extend involvement with the organizations and causes the donor cares about, and legally limit the amount of an estate that goes to the government. Endowments are good for the state; good for local communities; good for nonprofit organizations; and good for the individuals that contribute to and benefit from them.