Bridges - Spring 2014

8/12/2019 Bridges - Spring 2014

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T H E F E D E R A L R E S E R V E B A N K o f S T . L O U I S | C E N T R A L T O A M E R I C A S E C O N O M Y

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Enrollment, Student Debtand LMI Communities

CDAC Member Spotlight:Weve Met the Solution,and It Is Us

West Tennessee Day Trippin:Rural Tourism Campaign BuildsRegional Partnershipsfor Community and EconomicDevelopment

By Leigh Phillips

In recent years, city governments havedeveloped new strategies to improve

the financial stability of low- andmoderate-income households. Te cityof San Francisco believes in the uniquecapacity of local government to buildeconomic fairness and inclusion, andthe city has been at the forefront of this

work over the past decade. Te SanFrancisco Office of Financial Empow-erment (SF OFE) was created to lever-age the power of city hall to increasefinancial securityand economicopportunityfor all San Franciscans.

Te United States has two financialsystems. In the firstthe financialmainstreamthe majority of peopleenjoy access to the types of financialproducts and services that help them

manage money, establish credit andbuild wealth: checking and savingsaccounts, credit cards, mortgages andprime-rate loans. Tis is a system that

Local Innovation, National Impact:

Engaging Municipal Government inFinancial EmpowermentLessons Learned from San Francisco

creates upward mobility and allowspeople to invest in themselves and

their families.But there is another systemthe

financial fringethat strips wealthfrom those who can least afford it.Tese households, disconnected fromthe financial mainstream, rely oncheck cashers, payday lenders, rent-to-own stores, pawnbrokers and auto-titlelenders. Tese products and services

charge exorbitant fees and can mirepeople in a cycle of debt. More impor-tantly, they do not encourage upwardeconomic mobility.

In the United States, more than 25percent of people rely on fringe finan-cial products. Tat number increasesto 50 percent of African-Americanhouseholds and more than 40 per-

cent of Hispanic households. Even inwealthy San Francisco, one in threechildren are born into families with nosavings or assets of any kind, and more

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In the United States, more than25 percent of people rely on

fringe financial products.

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Bridgesis a quarterly publication of the

Community Development Office of the

Federal Reserve Bank of St. Louis. It is

intended to inform bankers, community

development organizations, represen-

tatives of state and local governmentagencies and others in the Eighth District

about current issues and initiatives in

community and economic development.

The Eighth District includes the state of

Arkansas and parts of Illinois, Indiana,

Kentucky, Mississippi, Missouri and

Tennessee.

Yvonne Sparks

Community Development Officer

and Executive Editor

314-444-8650

Daniel Davis

Senior Community Development

Manager and Managing Editor

314-444-8308

Maureen Slaten

Senior Editor

314-444-8732

Community Development Staff

Little Rock: Drew Pack

501-324-8268

Louisville: Lisa Locke

502-568-9292

Faith Weekly

502-568-9216

Memphis: Kathy Moore Cowan

901-531-5110

Teresa Cheeks Wilson

901-531-5109

St. Louis: Jeanne Marra

314-444-6146

Chelsea Dyer

314-444-8308The views expressed in Bridgesare not

necessarily those of the Federal Reserve

Bank of St. Louis or the Federal Reserve

System. Material herein may be reprinted

or abstracted as long as Bridgesis cred-

ited. Please provide the editor with a copy

of any reprinted articles.

Free subscriptions are available by

calling 314-444-8761, by e-mail to

[email protected]

or online at www.stlouisfed.org/br/

subscribe.

Calendar

16 FedCommunities.org LaunchOnline

Sponsor:Federal Reserve SystemFedCommunities.org

19 New Urbanism for Smaller PlacesAudioconference

Sponsor:Federal Reserve Bank ofSt. Louiswww.stlouisfed.org/bsr/EI_CDAudioconference

25-26 SOCAP Health Conference: Creat-ing the Market that Values HealthNew York, N.Y.

Sponsors:SOCAP, The New YorkAcademy of Medicine, FederalReserve Bank of San Francisco, BuildHealthy Places Networkhttp://health.socialcapitalmarkets.net

J U N E

S E P T E M B E R

O C T O B E R

J U L Y

A U G U S T

22The Policy Landscape of Mis-sissippi: Promoting Change ToCreate Opportunities for Missis-sippiansIndianola, Miss.

Sponsor:Federal Reserve Bank ofSt. Louis

Contact:Teresa Cheeks Wilson [email protected] or901-531-5109

31Saving Your Small Town: Home-

grown Community and EconomicDevelopmentMarion, Ark.

Sponsor:Federal Reserve Bank ofSt. LouisContact:Teresa Cheeks Wilson [email protected] or901-531-5109

19 Saving Your Small Town: Home-grown Community and Economic

DevelopmentGreenwood, Miss.

Sponsor:Federal Reserve Bank ofSt. Louis

Contact:Teresa Cheeks Wilson [email protected] or901-531-5109

8A B S T R A C T S D U E !

Economic Mobility: Research &Ideas on Strengthening Families,Communities & the EconomyOnline

Sponsor:Federal Reserve SystemCommunity Development ResearchConferencehttp://www.stlouisfed.org/community_development/economic-mobility-conference-2015/

22-23 Shift Innovation: CommunityDevelopment ConferenceKansas City, Mo.

Sponsor:Federal Reserve Bank ofKansas Cityhttps://www.kansascityfed.org/events/eventDetail.cfm?event=8735CE5FCB1E7299D05A8ECE259340E0

15-17 E A R L Y - B I R D R A T ET H R O U G H J U L Y 1 8 !Transforming U.S. WorkforceDevelopment Policies for the 21stCenturyNew Brunswick, N.J.

Sponsors:Federal Reserve Banks ofAtlanta and Kansas City; John J. Hel-drich Center for Workforce Develop-ment, Rutgers University

http://www.frbatlanta.org/news/conferences/2014workforce.cfm

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4. Be prepared to pitch in andmake a long-term commitment

to the partnership.Many groupswill set up meetings to introducean idea to a policymaker but lack along-term strategy to get the workdone. Tere should be a specificask that includes what needs tohappen, how the city should beengaged and a plan to remain sup-portive to get there. When Bank

On San Francisco was launched,the city was approached by part-ners armed with research and asolid plan for implementation. Teinitial request was clearUse

S P A N N I N G

the RegionThe region served by the Federal Reserve Bank of St. Louis

encompasses all of Arkansas and parts of Illinois, Indiana,

Kentucky, Mississippi, Missouri and Tennessee.

Federal Reserve System LaunchesCommunity Development Gateway

Those who tap the St. Louis Fedsweb site for community developmentresources will now have a much broadersource to draw from. In June, the FederalReserve System launches the webportal FedCommunities.org, which willinclude research publications, multimediaresources and more.

Through this single web gateway,users can access hundreds of relevantcommunity development materialsfrom offices that span the entire Fed-eral Reserve Systemfrom Boston toSan Francisco, and every Fed office inbetween. Interested in audioconferenceson neighborhood stabilization? Or, dataon foreclosure mitigation? Users can findthis and more on the new site.

A robust search function will he lpusers locate resources across multiple

topics and media types. Regular userscan also sign up to receive notificationswhen new resources are added accord-ing to their preferences.

N O W A V A I L A B L E

Whether you are looking for research on aordablehousing, a podcast on workforce development, or

anything in between, youll find it here.

One portal.

Thirteen Federal Reserve sites.

Hundreds of communitydevelopment resources.

Federal Reserve community development resourcespromoting people, place, practice and small business

Featured on FedCommunities.orgis the new resource Federal ReserveCommunity Development Perspectives:

A summary of activities , insights, and

future opportunities. This interactive PDFshowcases the Feds recent communitydevelopment efforts to address barriersto economic growth, and promote fairand informed access to financial markets.The report includes brief summaries ofcommunity development work at the Fed,

organized into four topic areas: people,place, the policy and practice of com-munity development, and small business.

Within each of these topic areas, thereport includes background informa-tion that helps to provide context for thiswork, a sampling of key research, out-reach programs and other initiatives, aswell as some ideas on future challenges,needs and opportunities.

Be sure to check out these resourcesand share your comments via the Con-tact Us tool, located withinFedCommunities.org.

your influence to convene andnegotiate with the financial institu-tionsand the partners helpedevery step of the way.

Important and innovative workrarely happens alone. It takes com-munity collaboration, the alignmentof strong research and data, clearpriorities, the right partners with theright influence and a solid strategy forimplementation. When these piecescome together, the results can bepowerful.

Leigh Phillips is the director of theSan Francisco Office of FinancialEmpowerment.

Local Innovation>> continued from Page 3 ONLINE ONLY

From the Ozarks to the Delta:

A Historical Perspective of

Regional Poverty in Arkansas

Andrew A. Pack

4 | Bridges stlouisfed.org

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Enrollment, Student Debtand LMI CommunitiesBy Bryan Noeth

Acollege degree has becomeincreasingly necessary to enjoy a

middle-class lifestyle. However, highertuition rates and a poor labor markethave caused students to increasinglyfeel the burden of educational debt inrecent years. Lets take a look at thestudent debt characteristics of bor-

rowers in the four large metropolitanstatistical areas (MSA) in the FederalReserve Bank of St. Louis districtLittle Rock, Louisville, Memphis andSt. Louisfocusing on differencesbetween low- and moderate-income(LMI) and middle- and upper-income(MUI) areas.

Credit Panel based on Equifax creditreports. Tis individual-level dataallows for rich geographical analysis ofstudent loans. It tracks the liabilities ofa random sample of the United Statespopulation over time.

Much of the difference in studentdebt levels between LMI and MUIcensus tracts may be due to the dif-ferences in educational levels. Figure1 shows the percentage of those aged25 to 44living in any of the fourSt. Louis Fed MSAswith variouslevels of educational attainment. Ofnote, people living in LMI tracts areless likely to have attended a postsec-ondary institution. Further, of those

the LMI and MUI tracts. More inter-estingly, borrowers in LMI tracts tendto have lower levels of debt than thosein MUI tracts. Tis difference is argu-ably uniform across the four MSAs.Tis may seem counterintuitive.Borrowers from LMI tracts likely hadfewer resources to attend college so

would need to take on more debt and,by definition, likely have less incometo make repayments. However, thereare several reasons why debt levelsmight be lower.

Part of this result is likely due tothe institutions attended by studentsfrom LMI tracts and the level of edu-cation they seek. In LMI tracts, manychoose community colleges with lowertuition levels. Conditional on having a

degree, a higher percentage of studentshave an associates degree. Tis effectmay be attenuated by the fact that bor-rowers from LMI tracts are also morelikely than those from MUI tractsto go to more expensive for-profitschools. (See IHEP 2011 or DemingGoldin and Katz 2011.) Additionally,

TABLE 1

Average Debt per Borrower Ages 2544

MSAIncomeTract

Q4 2005 Q4 2013 ChangePercentage

Increase

LittleRock

LMI $15,459 $29,427 $13,968 90%

MUI $20,201 $32,906 $12,704 63%

LouisvilleLMI $14,595 $25,366 $10,772 74%

MUI $17,215 $30,172 $12,956 75%

Memphis

LMI $15,426 $27,474 $12,048 78%

MUI $21,141 $34,527 $13,385 63%

St. LouisLMI $15,133 $29,172 $14,039 93%

MUI $19,782 $31,742 $11,960 60%

Consistently, borrowers from LMI tractshave much higher levels of delinquency than

borrowers from MUI tracts.

One way to analyze how LMIcommunities are faring with respectto educational attainment and debtfinancing is to geographically parti-

tion the population based on income.Using standard practice, census tracts1are classified as LMI if the medianincome within the census tract wasbelow 80 percent of the MSA medianincome. If the tract median income

was greater than or equal to 80 percentof the area median income, it was clas-sified as MUI.

Income data is based on the five-year 2009 American CommunitySurvey estimates.2Regional data onstudent debt was obtained using theFederal Reserve Bank of New York

who attended college at some point,those living in LMI tracts are lesslikely to have finished college andmore likely to have attained two-year

degrees than those living in MUItracts. Tese discrepancies will haveimplications for debt levels of those

who borrow for education.able 1 shows the average student

debt across the four metropolitan areasin the fourth quarter of 2005 and thefourth quarter of 2013. Te percent-age growth in debt per borrower has

been larger in all LMI tracts exceptLouisville. Tis might be becauseLMI tracts were starting from a lowerbase. Te growth in debtin absolutetermswas relatively similar across

>> continued on Page 6

SOURCE: FRBNY Credit Panel / Equifax based on authors calculations

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0%

5%

10%

15%

20%

25%

30%

35%

40%

Lessthan

highschool

Highschool

Some

college

Associates

degree

Bachelors

degree

Graduate

degree

0%

5%

10%

15%

20%

25%

30%

35%

40%

Lessthan

highschool

Highschool

Some

college

Associates

degree

Bachelors

degree

Graduate

degree

Lessthan

highschool

Highschool

Some

college

Associates

degree

Bachelors

degree

Graduate

degree

0%

5%

10%

15%

20%

25%

30%

35%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Lessthan

highschool

Highschool

Some

college

Associates

degree

Bachelors

degree

Graduate

degree

I I I I

I I

Middle orupper income

Low ormoderate income

KEY

FIGURE 1

Educational Attainment by Census Tract Classification in 2012, Ages 2544

Litt le RockNorth Litt le Rock, AR Louisvil le, KYIN

Memphis, TNMSAR St. Louis, MOIL

since borrowers from LMI tracts areless likely to finish college, they maynot take on as much debt if they arenot financing as much education.However, this is likely a net negativefor repayment since they dont earn the

wage premium that comes with gradu-ation. Conversely, a higher percent-age of students in MUI tracts attendprivate institutions and are more likelyto attain bachelors and even graduatedegrees. While these degrees demandhigher wages, they tend to have highereducational costs.

Another potential driver of thisseemingly contradictory result isthat while students from less affluentbackgrounds may have fewer resources

for education, colleges charge differ-ent prices based on income. In whatis called price discrimination, collegessubsidize students from lower-incomefamilies with financial aid. Hence, theactual price of education tends to dif-fer by family income. (See Wolla, 2014for more on this phenomenon.)

Finally, students are tracked only

afterthey incur debt. Perhaps studentssort where they live after college basedon some factor in common with theirlevel of student debt. For example,

maybe those with graduate degreeswho likely have the highest levels ofdebtmove to high-income areasafter graduation. Along the same line,perhaps borrowers who perceive lowerfuture income, on average, do not

incur as much debt.Te fact that LMI tracts have lower

per-borrower balances of student debtdoes not necessarily mean that theydont have trouble making payments.Since borrowers from LMI tracts tendto have lower income, they may haveproblems paying back seemingly rea-sonable levels of debt. Figure 2 shows

the delinquency rates in the four MSAsfor both LMI and MUI tracts. Consis-tently, borrowers from LMI tracts havemuch higher levels of delinquency thanborrowers from MUI tracts. Tis wastrue even before the recession. At theend of 2005, borrowers in LMI tractshad much higher delinquency ratesthan those in MUI tracts. Te growth

in delinquency has been substantialacross cities and income classifications,increasing an average of 5.8 percentagepoints across both.

Delinquencies are a concernbecause of the negative effects they canhave on borrowers (e.g., lower creditscores, reduced access to future credit,wage garnishments, etc.). Further, thismeans that a large portion of borrow-ers either are not receiving the incomethey anticipated from their training,are underestimating their debt burden,or a combination of both.

So far, we have only discussedthose who have borrowed for school.Another point of interest is thepercentage of individuals who hadstudent debt on their credit report.

Between 2005 and 2013, this per-centage increased across all of theMSAs, but did not differ significantlyacross income classification. Tis is

Enrollment, Student Debt,and LMI Communities>> continued from Page 5

SOURCE: American

Community Survey


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a significant result given that thoseliving in LMI census tracts are muchless likely to have attended college.

In conclusion, LMI communitiesare feeling the effects of the increas-ing reliance on student debt. Lower

income makes repayment of loansmore difficult, even though borrowersdebt burdens may be lower. Popularpress stories abound with anecdotesabout borrowers with six-figure debts.

While these borrowers do meritconcern, they only represent approxi-mately four percent of borrowers. (SeeDai 2013.) It might be fruitful for

policymakers to also focus on borrow-ers with seemingly manageable levelsof debt who might still have problemsmaking payments.

Bryan Noeth is a policy analyst for theCenter for Household Financial Stability atthe Federal Reserve Bank of St. Louis.

R E F E R E N C E S

Brown, Meta; Haughwout, Andrew; Lee,

Donghoon; Mabutas, Maricar; and van der

Klaauw, Wilbert. (2012). Grading Student

Loans. Liberty Street Economics Blog,

March 5.

HeardH A V E Y O U

Call for Papers

The Community AffairsOfficers of the Federal

Reserve System invitepaper submissions forthe ninth biennial FederalReserve System Com-munity DevelopmentResearch Conference, aunique event that aims tobridge the gap betweenresearch, policy and prac-tice on key issues facingthe country. High-quality

and emerging research ispresented in a dialoguewith policymakers andcommunity practitio-ners who can utilize thelessons gleaned fromresearch. The 2015 con-ference seeks to inform arobust public conversation about economic mobility.

Learn more about the conference and submit your paper/abstract here: www.stlouisfed.org/economicmobility2015.

New Research Broadens Understanding ofMicrobusiness Financial Vulnerability

CFED has released anew study on microbusi-ness financial capability,In Search of Solid Ground:Understanding theFinancial Vulnerabilitiesof Microbusinesses. Withsupport from Master-Cards Center for InclusiveGrowth, CFED launchedthe study in 2013, gather-ing online surveys from716 microbusiness ownersfrom 43 states and con-ducting phone interviewswith 214 owners from two target marketsMiami andMinneapolis. The findings reveal that microbusiness own-ers business and personal finances are often inextricablytied, and that they are dealing with significant financialvulnerabilities that reach far beyond access to credit.Download the full paper or the brief at http://cfed.org/knowledge_center/resource_directory/.

FIGURE 2

Delinquency Rate by Census TractClassification in Q4 2013

Middle or upper income

Low or moderate income

KEY

0%

5%

10%

15%

20%

25%

LittleRock

Louisville Memphis St. Louis

Dai, Emily. (2013). Student Loan Delinquencies

Surge. Inside the Vault, Spring.

Deming, David J.; Goldin, Claudia; and Katz,

Lawrence F. (2011). The For-Profit Post-

secondary School Sector: Nimble Critters

or Agile Predators? NBER Working Paper

17710, December.

Institute for Higher Education Policy. (2011).

Initial College Attendance of Low-Income

Young Adults. Portraits, June.

Wolla, Scott A. (2014). The Rising Cost of

College: Tuition, Financial Aid, and Price

Discrimination. Page One Economics

Newsletter, January.

E N D N O T E S

1 Census tracts are geographical areas that

usually contain around 4,000 people.

2 A single year (2009) was used for severalreasons. First, there was a revision to the

tracts in 2010, making geographical match-

ing based on later tract definitions difficult.

Second, using one year allows for the same

tracts to be tracked over time. Third, ACS

estimates are not available prior to 2009,

making earlier income estimation difficult.

3 There is evidence that the delinquency rate

is underestimated because many students

may enter deferral or forbearance. (See

Brown et al 2012.)

4 This result becomes a bit murkier whenpartitioning on age. No clear trend emerges

across MSAs with respect to age.

SOURCE: FRBNY Credit Panel / Equifax based

on authors calculations


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CDAC SPOTLIGHT

Weve Met the Solution, and It Is UsBy Brian Fogle

The challenges for rural Americahave been debated for decades.

Te unending urbanization of thecountry continues at the expenseof smaller, nonmetropolitan com-munities. According to recent U.S.Department of Agriculture (USDA)data, population in these countieshas diminished to about 46 million

Americans15 percent of the totalpopulation spread across 72 percent

of the land area. Te trend continues,with net population loss of 44,000 inthe two years since the 2010 census.Te Great Recession had a greaterimpact on rural areas, with more

job loss, more income decline and alarger increase in poverty rates thanurban areas experienced. Even the

agricultural boom of the past few yearsshows signs of slowing now, with farmincomes predicted to decline in 2014.

Te reasons for this long, slowdownturn are as numerous as thesolutions proposed over the pasthalf century. Small manufacturingdeclines, agricultural efficiencies,population mobility and lower educa-

tional attainment all contribute to thenegative trends. Most certainly, publicpolicy isnt consistent or sufficient tomeet the challenges, which is no small

wonder given the urban representa-tion of our policymakers. Rural

America continues to struggle to finda national voice.

Solutions to address these chal-lenges are mixed, at best. As ournation struggles to find resources foreducation, infrastructure and socialneeds, our rural areas tend to suffereven moreoften in silence. For toolong, many rural leaders have lookedto state capitals or Washington, D.C.,for answers. Instead, they could belooking right in their own communi-ties, where many answers may lie.

wo of these possible answersinclude local asset development tobuild community resources andstrengthening public education,because schools are anchors of ruralcommunities. Te CommunityFoundation of the Ozarks (CFO) isfocusing on both of these potentialsolutions.

Te CFO was founded in Spring-field, Mo., in 1973; the first ruralaffiliate was added in 1993. oday, theorganizations network of 44 commu-nity affiliates extends from the Missis-

sippi River in the east to the Kansasstate line in the west, the MissouriRiver in the north to the Arkansas

state line in the south. Tese ruralassets comprise about 45 percent ofCFOs more than $250-million assetbase. Te organization has a dedicateddepartment whose members travel theOzarks working with local foundationboards to build philanthropic assetsand improve the quality of life.

Certainly, the Ozarks is a region

better known for its culture of inde-pendence than its wealth. A number ofOzarks counties share traits similar toAppalachia and the Mississippi Delta,both areas of persistent poverty. Terealso is a long legacy of being tied tothe land and a pride in the communi-ties they call home. It is those positiveattributes that CFO tries to build on.After two decades of working in therural Ozarks, the CFO has built aknowledge base regarding what reso-nates in these communities and howthe areas limited resources can be usedfor the greatest impact.

Nearly six years ago, the RuralSchools Partnership was launched inconjunction with the Rural Schooland Community rust based in Wash-

ington, D.C. Te CFO recognizedthe strong tie between the health andpride of the local school system andthe vibrancy of the community. ownsdecline when school systems consoli-date and children have to travel hoursby bus each day to a different com-munity. School activities bring ruralcommunities together. Te CFOs

position is that strengthening localschools will contribute to a more viablecommunity. Efforts were focused onhelping districts create local schoolfoundations to build alternative

The United States will

experience the largest transferof wealth in history over the

next several decades.


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CDAC MEMBER SPOTLIGHT: BRIAN FOGLE

Brian Fogleis president of Com-munity Foundation of the Ozarks (CFO).Prior to joining CFO, he spent 30 yearsin banking in Springfield.

Fogle has been active in numerouscivic and nonprofit groups. He currentlychairs the Good Community Commit-tee and is on the board of the Spring-field Area Chamber of Commerce, theEvery Child Promise, Mercy Health

SystemsSpringfield, the Urban Districts Alliance andSpringfield Business Development Corp. He has receivedthe O. Franklin Kenworthy Leadership Award, the NationalCommunity Leadership Award and the Springfieldian

Award, as well as an honorary doctorate of humane letters

from Drury University.Fogle was appointed by Missouri Gov. Jay Nixon to the

Coordinating Board for Higher Education in 2012, and is amember of the Community Development Advisory Council(CDAC) for the Federal Reserve Bank of St. Louis. He is anative of Aurora, Mo., and received bachelors and mas-ters degrees in banking and finance from the University ofMississippi.

CDAC members are experts in community and economicdevelopment and financial education. They complement the

information developed through outreach by the DistrictsCommunity Development staff and suggest ways that theBank might support local efforts. A list of current members isavailable at www.stlouisfed.org/community_development.

financial assets; promoting place-based learning through leadership andgrants; and training a new generationof rural teachers through the nation-ally recognized Ozarks eacher Corpsscholarship program. Approximately

110 school districts now work with theCFO in some capacity.

Te organizations most recenteffort to build rural community assetsmay turn out to be CFOs most impor-tant work so far. In 2013, the Allianceof Missouri Community Foundationsused member funds and a generousUSDA grant to engage the Nebraska-

based Center for Rural Entrepreneur-ship to conduct a statewide, county-by-county ransfer of Wealth (OW)study. Although other states havesuccessfully used such studies, it wasinitially found to be cost-prohibitiveto commission one just for the CFOsservice area. By pooling matchingfunds for the USDA grant, valuable

information is now available to everyMissouri community foundation.Te United States will experience

the largest transfer of wealth in historyover the next several decades. OWoccurs when people pass along theirassets upon their demise to their heirs.Te implications for rural communi-ties are significant, as children havebecome the largest export for many

small towns. When they leave, theirfamilies wealth typically follows.

Without deliberate and thoughtfulestate planning, small towns can losegenerations of legacy in a relativelyshort amount of time.

Te OW data is based on 2010household net worth provided by theFederal Reserve Board and the Survey

of Consumer Finance Report, anduses census data to e stimate popula-tion growth, age and trends. Teresults are compelling.

Over the next 50 years, OW inthe U.S. is estimated to be $75 tril-lion. During a 10-year timeframe, theestimate is $6.2 trillion. For Missouri,the OW is $1.5 trillion and $135 bil-lion for similar time periods. For the

Ozarks region, that equates to $565billion and $47 billion.

Te key for rural areas, then, is tocapture some of that OW to benefitthe community through planned giv-ing. Te Alliance of Missouri Com-munity Foundations advocates Te5% Solution, which encourages resi-dents to consider leaving five percent

of their estate for charitable purposes.If just five percent of the OW canbe captured, it could be transforma-tive. In Missouri, the five-percentcapture would be $75 billion over 50years, $6.7 billion in 10 years. Teseare philanthropic resources that canbe used for education, the arts, socialservices or numerous other quality-of-

life issues.Te impact is even more evidentat a countywide level. For example,consider Carter County in south-central Missouri. Its estimatedper-household net worth in 2010 was$126,000, which is 42 percent belowthe statewide average. otal charitablecontributions for that county in 2012

were just over $508,000, according to

IRS statistics. Te five-percent captureof the 10-year OW would total about$5.8 million, or roughly $580,000annually. Tat would more thandoublethe available resources to tacklecountywide issues in Carter County.Tese are local resources for localpeople to address local issuescanthere be any more effective solution

than that?Te next several decades are going

to be critical for rural areas. Tosewho thoughtfully and deliberately cap-

ture the OW for their communitieswill do better than those who see suchresources leave their regions, neverto return. Each day the discussion of

this issue with residents is delayed,professional estate advisors and com-munity leaders risk more wealth goingelsewhere.

We should continue to have ameaningful dialogue on how best topreserve all that is good about rural

America, and develop better publicpolicy and resources to help communi-

ties and regions remain viable. How-ever, we must capture those resourcesthat are right under our noses, anduse them wisely to help ourselves. Tefuture depends on us.


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West Tennessee Day TrippinRural Tourism Campaign Builds Regional Partnershipsfor Community and Economic Development

to foster community and economicdevelopment. Award of the grant madeMAAG the states regional tour-ism organization for Shelby, Fayette,ipton and Lauderdale counties insouthernmost West ennessee.

Te first order of business was toassemble a regional ourism AdvisoryBoard (AB), made up of county-appointed representatives includingstaff from the local convention andvisitors bureau, chamber of com-merce and economic developmentorganizations, as well as representa-tives from local sites, attractions andbusinesses. Next up? Come up with agood plan for promoting the region.ourism netted $16.6 billion in

revenue through direct expendituresin ennessee in 2012; so, the abilityto maintain and grow the industry isessential to the states economy.

From the start, MAAGs AB hadthe foresight to recognize that justdeveloping another brochure was notthe way to stand out. Tey wantedto develop a sustainable brand for

the region that would be recogniz-able and viable for many years. WhileMemphis is the regions primaryattraction (visitors from across theglobe come each year to visit Grace-land, Beale Street and events likethe World Championship BarbecueCooking Contest), the AB wantedto find a way to capture the attention

of visitors, extend stays in Memphisand spread the economic benefits oftourism throughout the region.

With this goal in mind, the Westennessee Day rippin marketing

campaign was born. Te campaignaims to support small and emerg-ing local businesses and encourageentrepreneurship in rural counties byincreasing both visitor trips and travel-generated revenue to these countiesthrough the promotion of day tripsoriginating from Memphis.

Supported through funding fromthe DD and MAAGs membergovernments, the West ennessee Dayrippin video series was officiallylaunched in February 2013. Tesebroadcast-quality ads highlight uniqueplaces and events within the MAAGregion and utilize online media andvideo, the fastest-growing direct mar-keting delivery method. Each of the

four videos highlights a single countyand features the mayors of Shelby, Fay-ette and Lauderdale counties and theexecutive director of the Covington-ipton County Chamber. Te videosare currently televised through publicbroadcasting and local communityaccess stations in Memphis, and canbe seen as public service announce-

ments within the Flinn Broadcast-ing Corp. network that crosses stateboundaries. Te videos are promotedthrough both print and online mediapromotions, including MAAGs website, Youube channel and socialmedia. Tey are also featured on theweb sites of the regional chambers andlocal businesses.

Developed on a shoestring budgetand as a result of outstanding part-nership and participation extendingacross county lines, the West ennes-see Day rippin video series brought

By Maggie Johnson and Gina M. Tynan

These days, American travelersare an astute crowd. Tey seek

authentic experiences and want tolearn new things when they travel,including how they can preserve andprotect the local history and culture ofthe destinations visited. With the use

of web sites and social media to plantheir trips, travelers explore what canbe found outside of theme parks andname-brand tourist destinations.

Over the last 10 years, the marketfor this kind of heritage tourism, orgeotourism, has grown substantially

Over the last 10 years, the market

for geotourism has grownsubstantially and appears to be

here to stay.

and appears to be here to stay. It also hastremendous potential to put dollars inthe pockets of small businesses through-out rural America. In West ennessee,one regional partnership has found a

way to tap into this geotourist marketto reap community and economicdevelopment benefits for distressed ruralcounties through a program called Westennessee Day rippin.

In late 2011, the ennesseeDepartment of ourist Development(DD) awarded Memphis Area

Association of Governments (MAAG)a five-year, $159,250 ourism Endow-ment Grant to develop and implementa regional tourism promotion plan


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international attention to the regionand has received several awards,including the Academy of Interactive& Visual Arts 2013 Communica-tor Award of Distinction for onlinevideo selections promoting travel, theBronze elly Award for outstandingachievement in online video and theInnovation Award from the National

Association of Development Organiza-

tions (NADO), which acknowledgescreative approaches to regional com-munity and economic developmentthroughout the nation.

Organization of the AB has alsoprovided an outlet for tourism andeconomic development profession-als to share ideas, leverage fundingopportunities and cooperate in new

ways that reduce competition amongsites and share the benefits of increasedregional visitor counts. One exampleof this is the West ennessee Heritageand Roots Day rippin Bus ours,

which took place in February 2014.Tese tours were cooperatively devel-oped with MAAG, Heritage ours andthe National Civil Rights Museum in

Memphis, the Alex Haley Museumand Interpretive Center in Henning,enn., and the chambers of commercein rural ipton and Lauderdale coun-ties. Te tours highlighted the cultural

and literary heritage of West ennes-see as part of the regions celebrationof Black History Month. Originatingin Memphis (Shelby County), the bustrips took visitors to important sites in

African-American history, with stopsin Henning and the Ripley HistoricDowntown District in LauderdaleCounty, and an outing on the Coving-ton own Square in ipton County.

During the month of February, theAlex Haley Museum and InterpretiveCenter saw a 70 percent increase invisitation, which continues to rise.

With the success of the West en-nessee Heritage and Roots Day rip-pin Bus ours, MA AG and Heritageours partnered again to develop threenew West ennessee themed tours:

Antebellum Homes, Civil War, andBlues and Roots. Again, these toursbegin in Memphis and take visitors toLaGrange (a large collection of antebel-lum architecture), Fort Pillow andRandolph (two important Civil Warsites), and the Alex Haley site along

with the stomping grounds of the bluesin Covington.

More than 25 distinctive attractionsand events are currently featured in theWest ennessee Day rippin videos,representing more than 80 regional

jobs. Retailers across the region and

at the Fort Pillow State Historic Parkhave documented a rise in visitors sinceimplementation of the West ennesseeDay rippin campaign.

Based on its successes to date,MAAG was awarded additional grants($20,000 each) from the DDand the U.S. Dept. of Agricultureto expand the program. In 2014,the campaign increased its print and

online media marketing, developedand produced new and updated con-tent for its video series, and launcheda dedicated West ennessee Day rip-pin web site to promote tourism andto sustain the brand as a recognizableregional marketing campaign. Withthe additional funds, MAAG was ableto place ads at the Memphis-Shelby

County International Airportthefirst time these rural communitieshave been featured there. Te adscan also be seen in several magazines(Group ours, American Roads, Mem-phis Downtowner, Vacations) and atthe Memphis area visitors centers.

Maggie Johnson is the current programdeveloper and historic preservation plan-

ner for Memphis Area Association of Gov-ernments (MAAG). Gina M. Tynan, AICP, isthe former program developer and historicpreservation planner for MAAG.

Just some of the places you can visit while Day Trippin: The Alex Haley Museum and Interpretive Center in Henning; the historic site of the Civil War Battle of Fort Pillow in Lau-

derdale County; Immanuel Episcopal Church in LaGrange, Fayette County, first established as a mission in 1832.


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PRSRT STDU.S. POSTAGE

PAID

ST. LOUIS, MOPERMIT NO. 444

New Informational Podcasts

8 From the EighthPodcast

8 From the Eighthis a podcast seriesfrom the Community Developmentdepartment at the St. Louis Fed. Throughinterviews with experts (consisting ofeight questions), listeners learn aboutcurrent community development chal-lengesand successesin the EighthDistrict, helping them to understand boththe problems and the solutions. Podcastscover a variety of topics, including inno-vative strategies and emerging trendsrelated to community development.

Womens Business Center of NorthAlabama: Joanne Randolph

http://www.stlouisfed.org/community_development/multimedia/audio/8-From-the-Eighth/womens-business-center-north-alabama.cfm

Economic DevelopmentPodcasts

Experts from industry and academiaprovide their thoughts on workforcedevelopment, entrepreneurship and

employee training in these podcasts. Help for Difficult to Employ

Populations: Colocating Jobs and

Training Opportunities

Can business models be designed tosupport low-income populations byproviding jobs, necessary training andother support services? Carla Javitsand Jason Trimiew (Roberts Enter-prise Development Fund) discuss theirproposal for viable businesses that

also include a workforce developmentcomponent.

Evolution of the Ecosystem: State

Workforce Development Agencies

State workforce development agen-

cies are crucial in deploying federalfunding related to job training andplacement. Rich Hobbie (National

Association of State Workforce

Agencies) and Burt Barnow (GeorgeWashington University) explore howthese agencies are evolving as fund-ing streams change.

Economic Gardening: A Home-

grown Approach to Growth

How effective are economic develop-ment strategies that seek to growlocal entrepreneurship and small busi-nesses? Todd Johnson (Gallup) andDell Gines (Kansas City Fed) explore

the successes and challenges associ-ated with this approach.

To view transcripts or play the audioMP3 files, visit www.frbatlanta.org/podcasts/economicdevelopment/.

Resources

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Bridges - Spring 2014

Documents

Transcript of Bridges - Spring 2014