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Friday, October 18, 2019  Spokane, Washington  Est. May 19, 1883
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News >  Spokane

Spokane is worth $293 billion; what if a sliver went to charitable giving?

UPDATED: Mon., Oct. 7, 2019, 10:50 p.m.

For Henry Treede Jr., it was important to ensure his donation of more than 1,200 acres of farmland in Fairfield would contribute to the region for generations.

Treede, who had no children, set aside the wheat fields to be held in a trust to support his wife, Alma, before he died in 1984.

After Alma’s death in 1999, the trust was distributed to the Innovia Foundation to manage as a separate charitable organization under the condition the land be farmed for 20 years and proceeds given to nonprofits of Treede’s choosing, such as Whitworth University, Salvation Army and Volunteers of America.

As nonprofits like the Innovia Foundation aim to invest in their surrounding communities, the wealth transfer from one generation to the next could transform the impact of giving back, according to a report by the Center for Rural Entrepreneurship and LOCUS Impact Investing, a social enterprise that works with foundations on how local investments lead to prosperous communities.

It’s anticipated that more than $9 trillion will transfer from one generation to the next in 10 years, making it the largest household wealth transfer in U.S. history, according to the report, which was published by The Chronicle of Philanthropy.

Within Innovia’s 20-county service area spanning Eastern Washington and North Idaho, an estimated $42 billion is anticipated to be transferred between generations over the next decade. If just 5% of that wealth transfer was re-invested into local community organizations, said Innovia CEO Shelly O’Quinn, it would generate more than $2 billion that could be distributed to new endowments.

“It would result in $120 million a year in annual grant making,” O’Quinn said. “The impact alone – $120 million a year in areas people care about – would have a transformational impact in the community.”

Innovia partnered with LOCUS to conduct a transfer of wealth study on the region in May and received the results last week. The findings were announced Monday at the organization’s annual reception at the Spokane Convention Center.

“Over time, the farms we build, the businesses we build, the homes we own are going to pass from our hands to the next generation,” Deborah Markley, senior vice president of LOCUS Impact Investing and co-founder of the Center for Rural Entrepreneurship, said at the event. “We may sell them, we may transfer the business, but that process is happening and what we wanted to do with the transfer of wealth analysis is really help communities understand the potential behind it.”

The Innovia Foundation manages more than 500 funds and has donated more than $70 million in grants

to organizations.

Innovia also announced a campaign at its annual reception to partner with the community to capture 5% of the region’s estimated wealth transfer to improve economic opportunity and quality of life for the area.

To determine the economic impact a wealth transfer could have in a decade in the region, Innovia partnered with LOCUS to examine population changes in the area, baby boomer retirement, gentrification, closely held family businesses and the impacts of Native American tribes, mining, agriculture, forestry and tourism, said Aaron McMurray, Innovia’s chief strategy officer.

The organization also worked with a technical advisory committee that included economic development experts, economists, wealth advisers and estate planners.

LOCUS, which has also examined seven other areas in the country in addition to Innovia’s 20-county service area, found the Spokane County average household transfer of wealth over 10 years is more than $100,000. That amount is comparable to Kitsap’s estimated transfer of wealth of more than $115,000 per household.

“If you think about the wealth in the Puget Sound area, it’s encouraging we have a similar opportunity here,” McMurray said.

The 20-county area served by Innovia has an average $73,000-per-household wealth transfer in the next 10 years, which also exceeds the national average.

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Although numbers illustrate the impact a 5% transfer of wealth can have on a region, it’s the call to action behind those figures that has moved foundations and residents to transform their communities, Markley said.

“It’s equally about possibility and hope for communities as it is about numbers,” she said.

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