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OPINION: Spending Endowment Funds

By Woody White, posted Sep 29, 2023
Woody White
Editor’s note: Woody White was appointed this month to the 13-member New Hanover Community Endowment. White, a local attorney and UNC System Board of Governors member, is a former county commissioner. While serving on the New Hanover County Board of Commissioners, White voted in 2020 for the endowment’s creation as part of the county’s agreement to sell New Hanover Regional Medical Center to Novant Health.
 
Money is the root of all evil.
Money does not solve every problem.
Money won’t make you happy.
 
Depending on context, one might convincingly argue the above statements are all true. But in the context of my eight years as a local government official, I learned that money spent to improve our schools, hire more police officers or shore up our beaches was not evil, solved a lot of problems and actually made us happier. Many others around the state and nation wish they had what we have – the New Hanover Community Endowment, a perpetual endowment of over $1.25 billion – to be used for making our community smarter, healthier, stronger and safer. 
 
For the last 30 months, attending dozens of meetings, the current members of the New Hanover Community Endowment have undertaken yeoman’s work of planting the organizational root system and because of their Herculean efforts, the Endowment is poised to make the big and transformational impacts we envisioned when it was created.
 
They have been deliberate in their decision-making over this time by establishing the investment structure for the money, adopting important grant-writing rules relied upon by front-line nonprofit organizations and have made prudent decisions to get us where we are today. But now it is time for all of us to take the Endowment to the next level.
 
But what, exactly, does that look like?
 
When we authored the documents that created the Endowment – known primarily as “Exhibit C” (click here for pertinent language) to the Asset Purchase Agreement – specific authority was granted for writing grants to local nonprofits who work, tirelessly, to meet basic needs in our community.
 
But we also knew that, for tax purposes, as well as the lack of capacity to deliver, our nonprofit family was not well-positioned to oversee the year-after-year throw-off of millions of dollars that prudent investments would yield, and that is why we wrote into Exhibit C, the ability – really, the mandate – for the Endowment to partner with those who hold other levers in our community, like the University, Community College, the public school system, County and municipalities, and others, all of whom have tremendous capacity, to get things done.  
 
Let me give you a couple of examples of how this would work: 
 
What if we decided tomorrow morning to tackle these two problems?  
 
• Our public schools lack adequate athletic facilities to accommodate the many boys and girls who swim, run track, play soccer, football, basketball, tennis, etc. Some of their teams struggle to find practice space. Twenty-three years into the 21st century, when you tour some of these facilities, you may think you have been transported back to the 1980s. We could solve this problem by entering a Memorandum of Understanding with the school system to design, build and run a multi-acre, state-of-the-art sports complex that would change the lives of thousands of school kids who play sports. The Endowment enters the agreement, writes the check and boom! – capacity. Lives changed.
 
• Our emergency rooms are overrun with mental health, substance abuse and homeless populations to a point where dealing with the dozens who show up daily with nonmedical problems interfere with the real medical emergencies that arrive at the front door. New Hanover County still holds $50 million in escrow for mental health and substance abuse and also has funding from the opioid settlement. In a nanosecond, the Endowment could partner with New Hanover County and Novant Health, and solve two problems at once, by vertically integrating the resources needed to adequately treat those who suffer from mental health, substance abuse and homelessness, and in the process clear out the emergency rooms, drastically improving response times and outcomes.    
 
There are dozens of examples like these two, and the list goes on and on. I am not suggesting that money should be spent just for the sake of spending. I offer these two examples, instead, to illuminate the pathway to how the Endowment can leverage its resources and community partners to solve a whole host of problems our community faces.
 
But wait! There is more to all of this.
 
On the same day the Endowment was created, New Hanover County created a $300 million “Revenue Stabilization Fund” (click here to read that part of the agreement). That money, today, is earning north of 4% annually, with the interest deposited directly into the County checking account. The primary purpose in our creation of this Fund was to begin the journey over the course of five to 10 years, for New Hanover County to reach another milestone that no other county in North Carolina has; retiring voter-approved debt and weening ourselves off the bond market.
 
Borrowing money at historically low-interest rates, which New Hanover County did for decades, was not a bad modality to manage our growth, and it did a lot of good. But we knew that interest rates were going up and intended for the Stabilization Fund, through skilled management of cash within the organic growth of our tax base, to keep our tax rates “stable,” over time. 
 
Why was this important to us?
 
Just as it is in your family budget, if you have less or no debt, you have more money to save or spend. And in New Hanover County’s case, presently with more than $350 million of voter-approved indebtedness, it would realize an additional $50 plus million dollars PER YEAR loosened up within the existing county budget, to keep our tax base “stable” for those on fixed incomes and also to serve as an incentive to business growth for companies looking to expand or relocate to the lowest-taxed, business-friendliest community in the state of North Carolina.
 
This may all sound “pie-in-the-sky,” but it is not. If we join together, pursue and achieve what we originally intended when this Endowment was created, which is a strategic alignment with county government priorities, the possibilities of what can be accomplished are endless. And 100 years from now, when we are all dead and gone, billions of dollars will still be in the bank, helping to make our community smarter, healthier, stronger and safer for those who come after us.
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