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Turning over the Golden Leaf?

Post on March 10, 2009 by 2 Comments »

Golden Leaf Foundation President Dan Gerlach has his work cut out for him. House Minority Leader Paul Stam said this morning that he wants to redirect the foundation’s $80 million annual payment from the national tobacco settlement to the state’s General Fund.

And it’s not just Stam on Golden Leaf’s case. Democratic Senator Dan Clodfelter has introduced legislation that would suspend the payments to the foundation for three years and send the money to the General Fund to help address the state budget shortfall.

Golden Leaf makes  economic development grants to local agencies and nonprofits in counties that were dependent on the tobacco industry for jobs and economic activity.

Stam and Clodfelter point out that redirecting the money would not prevent the foundation from making grants using its prinicpal that totalled more than $700 million in the summer of 2008.

Clodfelter’s bill includes a lot of “whereas clauses” to support his proposal, the last of one which may be the toughest for Golden Leaf supporters to counter.

…in the view of the severe budget shortfalls now existing…the contribution of $70 million annually…should be of lesser priority that it has been in past years.”

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Comments (Closed):2

  1. Breathe EZ
    March 10, 2009 at 4:14 pm

    wasnt that money originally intended to go for tobacco control when it was handed out in the 1990s?

  2. Dan Gerlach
    March 10, 2009 at 9:14 pm

    The part of the citation for which Chris uses ellipsis (the …) reads “to increase the corpus of the Foundation.” In other words, Sen. Clodfelter’s bill argues that tough budget and fiscal times require that the money be put to work, rather than be added to the Foundation’s endowment.

    Fair point. But the Foundation is already putting all that money to work. Last week, the Golden LEAF Board authorized a budget for 2009-10 that used all of the incoming payments for that year for our grant programs to help Tier 1 (the most economically distressed) counties, to provide access to capital for small businesses, and to provide support for new and growing economic sectors such as local food systems, aerospace jobs, and the green economy. We cut our administrative budget, and are actively working with other funders to make our dollars go farther.

    The Golden LEAF was created to help communities that have suffered the most and the longest. Economic struggles are not new to the people we serve, and cutting the payments to the Golden LEAF would force us to cut our grantsmaking budget by two-thirds. And, by the way, the principal of our Foundation, like that of other foundations and everyone else, has fallen since the June 2008 figure cited above

    I know how hard it is to balance the state’s budget in tough times. But cutting funds that could help the places that need it the most is not the place to start.