As part of the recently enacted TEFFI Act, the foundation will direct funding to support community development projects in Hesston, Kansas and other rural communities, colleges, and universities throughout the state.
DALLAS, April 14, 2022 − Beneficient, a technology-enabled platform providing exit opportunities and primary capital solutions and related trust and custody services to holders of alternative assets, announced funding of the Beneficient Heartland Foundation (the Foundation) formed on January 20, 2022.
Based in Hesston, Kansas, the Foundation held its first organizational meeting of community leaders on February 28, 2022. The Foundation’s mission focuses on reinvestment in rural Kansas communities, supporting universities and colleges based in Kansas, and funding initiatives identified in the Technology-Enabled Fiduciary Financial Institutions (TEFFI) Act.
The TEFFI Industry as an Innovative Mechanism for Community Reinvestment
The Foundation will direct funding through grants and provide support for growth and development projects. Benefits to identified communities will include job and income growth, main street revitalization, educational facility improvements, construction and development, healthcare facility enhancements, senior facility improvements, and support for post-secondary institutions.
Ben received a charter from the State of Kansas permitting it to commence operations as a regulated fiduciary under the TEFFI Act. As outlined in the TEFFI Act, a 2.5% financing fee is collected from TEFFI customers who finance their alternative assets via Kansas trusts. That fee is funded with either cash or income-producing assets, at the customer’s option, and is collected by the Kansas TEFFI Economic Growth Trust originally established on December 7, 2021.
Operating under the control of an Independent Trustee, the Kansas TEFFI Economic Growth Trust is managed for the exclusive benefit of the Kansas Department of Commerce, local community private foundations such as the Foundation, and charitable organizations serving the purposes outlined in the TEFFI legislation.
Charitable beneficiaries of the trust utilize the fees collected from TEFFI customers to facilitate contributions to rural Kansas communities and Kansas colleges and universities. The financing fees paid by TEFFI’s customers never become the property of the TEFFI, such as Ben, but remain at all times segregated for rural economic development, Kansas colleges and universities, and the Kansas Department of Commerce.
As a direct result of the business operations enabled by its charter, Ben was able to announce an initial $15.9 million community reinvestment to Kansas in January 2022. That contribution is allocated as follows:
- $2.7 million of cash segregated for the benefit of and to be received by the Kansas Department of Commerce during the week of April 18,
- $6.3 million of cash and assets segregated for the benefit of public charities dedicated to economic development within Hesston and Harvey County as outlined in the TEFFI legislation
- $6.9 million of cash and assets to the Foundation in Hesston, Kansas.
The first cash wire from the segregated accounts was received by Hesston’s Citizens State Bank, placing the Foundation as one of the top 10% depositors and enabling community reinvestment efforts to begin. With that work complete, the Foundation’s formal reinvestment planning is underway.
The Foundation’s initial focus will be on building a grocery market in Hesston’s Main Street shopping district. At the Foundation’s quarterly board meeting on April 13, 2022, the Foundation formed a board subcommittee to manage the grocery store discovery and planning process and has authorized a budget for property acquisition, concept planning and architectural renderings.
Cash allocated to the Kansas Department of Commerce will be used at the department’s discretion for development projects and for the promotion, facilitation, and growth of the TEFFI industry in Kansas.
Instrumental to the TEFFI legislation and the successful funding of the Foundation has been the hard work and support of legislators across the State and across the aisle and their recognition of the incredible opportunity TEFFI provides to Kansas. The expansion in more small rural communities across Kansas will require the continued cooperation and coordination of the Banking Commissioner, the Department of Commerce, and state-wide associations such as the Kansas Bankers Association, particularly those members who serve in senior capacities on the Kansas Banking Commission Board.
In this regard, Ben fully supports the directives of the TEFFI Joint Oversight Committee of the House and Senate for the Office of the State Banking Commissioner to expeditiously open the application process to other TEFFIs so additional rural communities can benefit from this innovative legislation. The initial statutory application fee paid by Ben was designed to enable the Department to quickly secure the necessary resources and to develop the TEFFI industry in Kansas. The sooner that occurs, the sooner rural Kansans will benefit.
The TEFFI Act has the opportunity to have a lasting financial impact for local rural communities in Kansas, starting with the revitalization of Hesston through plans to build a grocery store, a basic need that has been missing in this community for many years. Our efforts to be on the leading edge of banking and trust innovation will also ensure that our sons and daughters will have access to high-quality financial sector jobs in their Kansas hometowns, where they can continue to grow and give back to our local communities. With the initial committed funding now in hand at the Foundation, we will be meeting over the upcoming weeks to begin our grant making process, which is the exciting part of the TEFFI legislation.
David Kauffman, Mayor of Hesston
TEFFI
