$5 million will be awarded from tobacco settlement

By David Rice

August 16, 2000 Web posted at: 11:00 AM EDT (1500 GMT)

RALEIGH, North Carolina (Winston-Salem Journal) -- Requests for as much as $5 million in grants from the foundation that will receive half of North Carolina's tobacco settlement must be submitted by Oct. 16, and the first round of grants will be announced in December, the foundation announced yesterday.

Individuals need not apply.

''We don't have any idea yet of the volume of applications, but my guess is there will be quite a few,'' said William Friday, the former president of the University of North Carolina system who serves as chairman of the Golden LEAF Foundation's board.

''There's nothing else like it in government that I know about.''

The General Assembly voted last year to direct half of North Carolina's $4.6 billion settlement with the cigarette industry to the Golden LEAF Foundation to help tobacco-dependent communities in the state.

The remainder of the settlement money will be divided between a trust fund for farmers and tobacco workers and a trust fund for health programs.

The foundation intends to build principal and make grants only out of its investment income, Friday said.

Assuming a 7 percent return and the payout of all investment income, Golden LEAF is projected to accumulate $3 billion over 25 years and make $2.35 billion in grants.

William Clarke, the chairman of the board's investment committee, said that as of July 25 the foundation had $94.8 million and had invested its money in North Carolina financial institutions, earning $2.5 million in interest.

''By the end of this year, we hope to have around $100 million, before we give away $5 million of it,'' Clarke said.

Although the foundation could give all $5 million to one agency, Friday said that the intent is to spread the money around.

''What we're really trying to do is stimulate community interest as far and as wide as we can,'' he said.

Cecil Sewell, the chief executive of Centura Bank and chairman of the board's program committee, said that the foundation particularly hopes to make a difference in rural North Carolina as tobacco continues its decline.

''I don't believe that we could sit back and watch two North Carolinas develop any more than we could not have NAFTA and have a Third World country sitting on our border in the shape of Mexico,'' Sewell said.

Grants will be made to community groups, nonprofit agencies and government units, and the money will not take the place of government money, Sewell said.

''We did not want to replace or supplant existing funds,'' he said.

''We wanted to leverage them -- let the Golden LEAF funds be the ones that make a difference.''

The grant money could go to a community college for scholarships for retraining of farmers, plant or warehouse workers, or even for the children of flood victims who couldn't afford to return to school after Hurricane Floyd, Friday said.

''How many children didn't return from the floods?'' he asked. ''This is an enormous waste of talent.''

Under its articles of incorporation, the foundation can make grants in any of seven areas: education assistance, job training and employment assistance, scientific research, economic hardship assistance, public works and industrial recruitment, health and human services, or community assistance.

The foundation doesn't have a staff.

Grant requests will be reviewed initially by independent reviewers before the foundation board goes through the applications.

Libba Evans of Winston-Salem, the chairwoman of the board's personnel committee, said that the board hopes to name an executive director by October.

Grants could be spread over up to three years, but an organization would have to reapply after that, said Ron Johnson, a vice president at Research Triangle Institute, which is working with the foundation to develop the grant-review process.

The foundation will not make grants to individuals in the first round, Johnson said.

That restriction raised questions about how, for example, a tobacco farmer who wants to diversify into grapes or hydroponic tomatoes might get help with the new venture.

David Kyger, an attorney for the foundation at Smith Helms Mullis & Moore in Greensboro, said that because the foundation's money is public money, it must go for a public purpose under the state constitution.

Friday and other board members said that farmers can still organize and ask their cooperatives, local extension-service offices or county economic-development offices to make applications to the foundation on their behalf.

Billy Ray Hall, the director of the N.C. Rural Economic Development Center and a member of the foundation board, said that farmers won't be cut out of the process.

In board members' discussions with farmers, Hall said, ''The first issue is, 'How do we stay on the farm -- how do we aggregate ourselves and do marketing? How do we form co-ops?' They want to know if they can apply for this money. The simple answer is 'Yes.' ''

Friday agreed.

''This is the most important part of it -- keeping the farm population productive. Because we all depend on it,'' he said.

Information and grant applications are available by calling (877) 225-8362 (toll-free) or (919) 541-6401, by downloading the program announcement at www.goldenleaf.org or by sending e-mail to info@goldenleaf.org.

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