Carolyn Justice: Hedge Fund Investments Are Critical for North Carolina’s Rural Counties

Recent discussions and legislative action among our nation’s policymakers have called attention to some of the most pressing needs our country faces. Still, as we’ve seen in the past, Washington’s attention is too often focused on our most urban and populated areas. Meanwhile, the nearly 47 million people living in our country’s rural counties need critical resources to help our communities grow, and our families thrive.  

One way to address the needs of rural America is to keep funding channels open for nonprofit organizations that serve as the backbone for rural, nonurbanized communities. And many would be surprised to learn that one of the most vital funding channels for nonprofits is investments in hedge funds.  

Nonprofits often operate in adverse funding environments, so many invest in hedge funds to round out their balance sheets and protect their financial security against long-term market risk. Hedge funds are sophisticated money managers, perfectly positioned to grow nonprofits’ investments over time and protect them from sudden downturns in the market. Our nation’s elected officials and Washington regulators need to understand and appreciate the relationship between hedge funds and their investors. If they don’t, misinformed public policy could shutter nonprofits nationwide, including those located right here in North Carolina. Suppose nonprofits are forced to close their doors. In that case, many rural communities will be left without critical resources and services that help support North Carolinians and ensure all of our communities and citizens have a chance at success.  

Fortunately, nonprofits like the Golden LEAF Foundation are there to ensure this doesn’t happen. The Golden LEAF Foundation supports economic opportunity in North Carolina’s rural counties and empowers residents. This nonprofit provides critical services to North Carolinians. Through its invaluable leadership in grantmaking and community-wide collaboration, the organization helps protect many of our state’s rural residents from experiencing economic disparity.  

The Golden LEAF Foundation invests over $300 million in hedge funds to carry out its mission. These investments provide diversification benefits that are important to the overall portfolio, especially in times of elevated volatility. Over time, realized investments from hedge funds  are distributed back to rural counties and the residents that depend on Golden LEAF projects, making those hedge funds integral to Golden LEAF’s operation. If ill-advised policies compromise that work, North Carolina’s rural residents will be left without the critical support Golden LEAF provides.  

Golden LEAF isn’t the only North Carolina- based nonprofit that invests in hedge funds. Novant Health, a nonprofit healthcare provider, invests $420 million in hedge funds. Novant Health’s returns keep medical facilities open, giving thousands access to critical health care in times of need. The Leon Levine Foundation, much like the Golden LEAF Foundation, also supports economic and philanthropic initiatives across our state. They have substantial investments in hedge funds, nearing $200 million, and the returns those investments generate help empower many North Carolinians, particularly those in Jewish communities. 

It’s encouraging to see our policymakers and elected officials focusing on helping our most vulnerable populations. However, as we look at solutions for issues that have long plagued our citizens, our leaders must not lose sight of rural Americans’ wellbeing. They need to recognize that much of the 47 million people living in rural counties depend on nonprofits and the investing strategies that keep them operational. Since many nonprofits invest directly in hedge funds, lawmakers cannot take punitive action against hedge funds without putting rural citizens at risk.   

Carolyn Justice is a former State Representative, former County Commission Chair in Pender County, past Board Member of the Golden LEAF Foundation, and former Vice Chairwoman of the North Carolina Republican Party.