The Golden LEAF Foundation and North Carolina

Thank you for joining us this Saturday morning. Today we’re diving into one of the most impactful North Carolina organizations of the past 25 years: Goldean LEAF (“LEAF” stands for long-term economic advancement foundation)
The nonprofit has largely flown under the radar for the past decade. That lack of public attention or controversy should be seen for what it is: evidence the group is doing its job, and doing it well.

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Finances and Structure

In 1998, nearly every state in the country signed a master settlement agreement (MSA) with the four biggest cigarette companies. The MSA outlined payment terms for the companies to compensate the public for harms caused by smoking. The terms require cigarette companies to make annual payments to states in perpetuity.

But the net effect of the settlement was higher cigarette prices as companies just passed on the cost to consumers. Indeed, higher prices were a main goal of the architects of the settlement. The Federal Trade Commission wrote in 1997, “The proposed settlement contemplates that these industry payments will be ‘passed through’ to consumers, which will result in higher cigarette prices, and presumably in turn, a reduction in youth smoking.”

The year after the settlement was inked, North Carolina lawmakers created a nonprofit corporation – which would become Golden LEAF – to accept, manage, and disburse 50% of the proceeds from North Carolina’s share of the tobacco settlement. The originating statute directs Golden LEAF to act “for the public charitable purposes of providing economic impact assistance to economically affected or tobacco dependent regions of North Carolina.”

The Foundation is managed by 15 directors, appointed in equal share by the governor, Speaker of the House, and Senate leader. 

From 1998 to 2013, North Carolina received more than $2.2 billion from tobacco companies (and their consumers) per the MSA. In 2013, policymakers repealed the law directing half of annual settlement funds to Golden LEAF.

“Subsequently, the North Carolina General Assembly enacted legislation which provides for the appropriation of tobacco settlement funds to the Foundation each year,” Golden LEAF explained in its annual financial report. Recall that in 2013, the state was still struggling to recover its finances after the 2008-09 financial crisis.

From 2017 to 2024, the legislature allocated $17.5 million per year to Golden LEAF. This year, Golden LEAF’s appropriation increased to $25 million.

But Golden LEAF distributes far more than that each year because it has built up a substantial endowment that earns investment income, which the Foundation deploys in grantmaking activity. As of June 2024, the Foundation’s assets total $1.4 billion, even as the organization has distributed $1.3 billion in grants since its creation. The organization’s assets increased by $112 million over the prior year.

Grantmaking
Golden LEAF divides its grantmaking activity into four categories:

• Open grants of up to $500,000 to government entities and 501(c)(3) nonprofits;
• Community-based grants of up to $1.5 million to government entities or 501(c)(3) nonprofits for projects “targeted toward investments in the building blocks of economic growth,” including job creation, agriculture, and workforce preparedness;
• Economic catalyst grants to economic development entities for projects “in which a company will commit to create a specific number of full-time jobs in a tobacco-dependent or economically distressed area”; and
• SITE Program grants to help counties prepare large industrial sites to accommodate major employers.

Because of its long track record and impeccable reputation, Golden LEAF has been entrusted to support some of North Carolina’s most impactful initiatives. In 2021, for example, Golden LEAF awarded $40 million to support Toyota’s massive battery manufacturing facility in Randolph County.

The list of Golden LEAF-backed initiatives is long and diverse. In just the past two years, the nonprofit deployed $13 million for a biologics training center at Wilson Community College; $1 million for sewer infrastructure to service a large industrial tract in Randolph County; $250,000 for a flood mitigation project in Pittsboro; $1 million to support a public safety training facility at Brunswick Community College; and the list goes on. Just weeks ago, Golden LEAF authorized a $7.5 million grant to assist small business owners looking to recover after Hurricane Helene.

Golden LEAF is a case study in a well-managed and well-financed endowment to support the public good. Its impacts reach all over rural and developing parts of North Carolina. The organization is properly viewed as proof positive that politically-appointed and publicly-backed nonprofits can and often do function efficiently and as promised.