North Carolina Fund

North Carolina Fund
Name	North Carolina Fund
Founded	1963
Founder	Terry Sanford
Location	North Carolina
Key people	John Ehle, George Esser
Focus	Poverty reduction, Community development
Dissolved	1968

North Carolina Fund The North Carolina Fund was a pioneering, privately endowed anti-poverty organization established in 1963 by Governor Terry Sanford. It served as a state-level model for the federal War on Poverty and was instrumental in developing community action programs that empowered poor African Americans and white residents to challenge local power structures. The Fund's work, which emphasized grassroots participation and economic opportunity, became a significant, though often contentious, force for social change within the broader Civil Rights Movement in the American South.

Background and Establishment

The North Carolina Fund was created during a period of national economic growth that masked persistent, deep-seated poverty, particularly in the rural Southern United States. Governor Terry Sanford, a progressive Southern Democrat, was motivated by moral conviction and a pragmatic desire to modernize the state's economy. In 1963, he persuaded the North Carolina General Assembly to charter the Fund as a nonprofit corporation and secured a $7 million endowment from the Ford Foundation, the Z. Smith Reynolds Foundation, and other private donors. This private funding allowed the Fund to operate with a degree of independence from state politics. Sanford appointed a board of directors and hired George Esser, a seasoned administrator, as its executive director. The Fund's establishment preceded President Lyndon B. Johnson's declaration of the national War on Poverty, making North Carolina a laboratory for anti-poverty strategies.

Goals and Programs

The Fund's primary goal was to attack the root causes of poverty through innovation and local empowerment. Its mission was articulated as expanding opportunities for education, employment, and community development. Key programs included the Community Action Program (CAP) model, which required "maximum feasible participation" of the poor in planning and administering services. The Fund also launched the North Carolina Volunteers program, a precursor to AmeriCorps VISTA, which placed college students and graduates in poor communities to tutor children and organize residents. Other initiatives focused on adult education, job training, and securing federal grants for Head Start programs. The Fund operated as a catalyst and grant-making body, providing seed money and technical support to local projects across the state.

Community Action and Local Initiatives

The Fund's most transformative work occurred through its support of local community action agencies (CAAs). It provided critical startup grants and guidance to nascent organizations, many in predominantly Black communities. Notable examples include the United Organizations for Community Improvement in Durham and the Craven Operation Progress in New Bern. These agencies tackled issues like substandard housing, voter registration, and police brutality. They created cooperative businesses, established day care centers, and offered legal aid. By insisting that the poor themselves help run these programs, the Fund fostered new generations of African-American leaders and organizers who directly challenged the traditional, white-dominated political and economic order in their towns and counties.

Relationship to the War on Poverty

The North Carolina Fund is widely regarded as a direct prototype for the federal Economic Opportunity Act of 1964, which created the Office of Economic Opportunity (OEO). Fund staff, including George Esser and planner John Ehle, consulted extensively with Sargent Shriver and the Johnson administration in designing the national Community Action Program. The Fund's experiments proved the viability of the community action approach. Subsequently, the Fund became a primary conduit for federal OEO dollars into North Carolina, managing and coordinating grants to local CAAs. This relationship amplified the Fund's impact but also entangled it in the growing national political controversies surrounding the War on Poverty.

Impact on Civil Rights in North Carolina

The Fund had a profound, if indirect, impact on the Civil Rights Movement in North Carolina. By funding and legitimizing Black-led community organizations, it provided an institutional framework for pursuing economic justice alongside the fight against legal segregation. The process of community organizing increased political consciousness and mobilization among the poor, complementing the work of established groups like the NAACP and the Student Nonviolent Coordinating Committee (SNCC). Training in grant-writing, administration, and public speaking empowered residents to advocate for themselves, shifting the dynamic of local power. While not a protest organization, the Fund created the infrastructure that enabled sustained challenges to economic inequality and systemic racism.

Controversies and Political Opposition

The Fund's emphasis on empowering the poor inevitably sparked intense political backlash. Conservative Democrats and Republicans in the North Carolina General Assembly, led by figures like I. Beverly Lake Sr., accused it of fostering class conflict and racial agitation. Critics denounced the community action model as a threat to states' rights and local government control, coining the derisive term "federal bypass" for its channeling of money to grassroots groups. The Fund was attacked as a haven for outside agitators and radicalism. By 1967, the state legislature launched investigations and ultimately refused to provide any public funding, forcing the organization to rely solely on private foundations and federal grants, which were also diminishing.

Legacy and Dissolution

The North Carolina Fund officially closed its doors in 1968, its private endowment exhausted and political support evaporated. However, its legacy endured. Many of the local community action agencies it established, such as the Durham County Cooperative Extension, survived and continued operating. The Fund demonstrated that grassroots anti-poverty strategies could work, influencing subsequent state and federal policy. It also launched the careers of numerous leaders in public service, philanthropy, and community organizing. Historians view the Fund as a bold experiment that exposed the deep connections between poverty and racial discrimination, and highlighted the fierce resistance that arises when marginalized communities are given the tools to gain political power and economic self-sufficiency.

Category:Anti-poverty organizations in the United States Category:History of North Carolina Category:Civil rights movement in North Carolina Category:Organizations established in 1963 Category:Organizations disestablished in 1968