U.S. Endowment for Forestry and Communities
Social Innovation Fund 2012
The U.S. Endowment for Forestry and Communities, Inc. (the Endowment -- www.usendowment.org) is a not-for-profit 501(c) 3 public, charitable, grantmaking foundation. The Endowment was established September 21, 2006, at the request of the governments of the United States and Canada in accordance with the terms of the Softwood Lumber Agreement 2006 between the two countries and was granted a one-time, $200 million perpetual endowment. The Endowment has and continues to serve as an intermediary organization in collaboration with a range of partners including federal agencies (e.g. USDA Forest Service; USDA Natural Resources Conservation Service), private foundations (e.g. Gaylord and Dorothy Donnelley Foundation; Knobloch Family Foundation), and for-profit corporations (e.g. Duke Energy).
Social Innovation Fund classification: Issue-Based and Economic Opportunity focused.
Project Summary: The Endowment proposes to replicate a project under development in a majority African-American county in a rural part of Georgia. There we are operating as proxy for the community are investing in a community-scale wood-to-energy facility using program related investment and an equity contribution that will yield a co-owned facility expected to return up-to 40% of annual profits over the initial 20-year life of the power purchase agreement to be reinvested in social change within the host county. If successfully deployed there and in other forest-rich, persistent poverty rural areas of the nation, this project will create a new paradigm for public/private collaboration whereby a modest front-end investment by the community or philanthropy will leverage perhaps 20 times the private capital and will generate significant resources over sustained periods of time to be directed to community needs. As initial project investments are repaid in these additional pilots, the Endowment will use funds to seed a revolving "Rural Benefit Investment Fund" to further replicate the projects on an on-going basis, thus adding sustainability to the new mechanism.
Funding Request: The Endowment requests $5 million over a four year period; $4.5 million will be used for grants to sub-grantees with the remaining $500,000 devoted to technical assistance and evaluation. The Endowment will cover all its own administrative costs which will serve as additional match of more than $500,000 above and beyond the cash match. Thus, all $5 million requested from the Social Innovation Fund will be used for project, technical assistance, and evaluation purposes; none will be used for the Endowment's administrative expenses.
Matching Funds: A 1:1 cash match, $5 million will be provided by the Endowment. A 1:1 match will be required on all funds granted to sub-grantees.
Targeted Communities: Forested rural communities of a USDA Economic Research Service (ERS) non-metro classification 4 or above that are poor or persistently poor under USDA definitions or that have recently increased poverty due to negative employment and income impacts related to changes in forest-related economic sectors.
Key measureable outcomes: In each sub-grantee county (2-3 additional counties beyond the pilot):
1. At least 15% of families with incomes <200% of poverty are participating in programs that will significantly increase family economic assets over 10 years.
2. Create 50-75 family-supporting jobs related to the wood-energy sector from each project.
3. At least $20-40 million new wood-to-energy sector business investment over the 4 years of the program across the 2-3 new projects.