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What States Are Doing To Stop Rural Money Drains

ARI SHAPIRO, HOST:

In the Christmas classic "It's A Wonderful Life," the young hero, George Bailey, is just dying to leave his hometown.

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JAMES STEWART: (As George Bailey) I'm shaking the dust of this crummy little town off my feet, and I'm going to see the world.

SHAPIRO: For generations, ambitious kids have left small towns for the big city. And when those kids inherit money, it leaves the small towns, too. Now some parts of rural Nebraska are figuring out how to keep a bit of that wealth at home. Frank Morris of member station KCUR reports.

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FRANK MORRIS, BYLINE: Royal, Neb., here is that dot on the vast corn and soybean fields blanketing the northeastern part of the state. Like a lot of remote towns, it's seen better days. And Colleen Murphey - weathered 57-year-old - says progress may soon finish Royal.

COLLEEN MURPHEY: Local people, my generation and older, are still trying to hold things together, but when the kids leave, you can't do anything about it.

MORRIS: And when the young people flee, family money follows. Over in O'Neill - a town of 3,600 in Holt County, Neb. - lawyer Jan Krotter Chvala has seen the same thing.

JAN KROTTER CHVALA: Most of the people come back for the funeral. They live somewhere else, and we basically stop at the bank on the way out of town and send the money away from here, never to be seen again.

MORRIS: We're talking about wealth built over generations suddenly gone. And Krotter Chvala says that for small towns, retaining at least some of that capital can be crucial.

CHVALA: Because once the transfer's done, if it moves out of here, you're going to snap your fingers, it's going to be done. It's going to be over. And all you're going to have is nobody in your churches and your schools. It's too late.

MORRIS: And she has a pressing question for people planning their estates.

CHVALA: What about making the community one of your heirs along with your children?

MORRIS: Foundations in Nebraska - they've been doing this purposefully for years, thanks to leadership from the Nebraska Community Foundation. Its president, Jeff Yost, says the state's charitable funds have been bracing for an enormous generational and geographical handover as baby boomers pass on.

JEFF YOST: In Nebraska, we estimate the transfer of wealth to be some $600 billion over the next 50 years, so it's huge money.

MORRIS: And that's just Nebraska. Dozens of community foundations have sprung up in tiny towns across the Midwest to try to capture some of this money. In Nebraska, small foundations have boosted their holdings by almost fivefold in the last decade, and that's making a big difference in places like Holt County.

UNIDENTIFIED WOMAN #1: Hey, Deb. Come on in.

MORRIS: The community foundation in O'Neill is throwing a coffee this morning as part of a fund raising effort it hopes will trigger a matching grant and roughly double the size of its permanent endowment.

UNIDENTIFIED WOMAN #2: We're happy to say today, we're at 96 percent of our $200,000 goal.

(APPLAUSE)

MORRIS: Foundations here are turning that money into all kinds of nice stuff for the community. This meeting is in a new building - a satellite campus for a regional community college built with help from foundation funding. Another foundation helped to bring wind energy, a movie theater and a brewery out here - not to mention saving an ethanol plant and all those jobs.

And the big payoff comes when places like Holt County, Neb., foster local businesses and amenities that attract families.

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MORRIS: Jonna Kohle lives in a new house with her husband and four daughters. Tonight, she's giving the baby a bath. Kohle grew up here, went away to school, became an optometrist and then moved back. And she says she sees more and more people her age doing the same thing - taking jobs here or working remotely.

JONNA KOHLE: I don't know the statistics, but I do feel things are turning around. I feel very optimistic and hopeful for the future of this area.

MORRIS: An area that is having some success in cracking the code on rural decline. For NPR News, I'm Frank Morris in Holt County, Neb.

(SOUNDBITE OF CASHMERE CAT'S "MIRROR MARU") Transcript provided by NPR, Copyright NPR.

Frank Morris has supervised the reporters in KCUR's newsroom since 1999. In addition to his managerial duties, Morris files regularly with National Public Radio. He’s covered everything from tornadoes to tax law for the network, in stories spanning eight states. His work has won dozens of awards, including four national Public Radio News Directors awards (PRNDIs) and several regional Edward R. Murrow awards. In 2012 he was honored to be named "Journalist of the Year" by the Heart of America Press Club.
Frank Morris