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Publication Date

September 2005


Aaron McKethan, Michael A. Stegman


The Rockefeller Foundation

This paper examines the feasibility of tapping North Carolina’s unclaimed property, or “escheats” fund, as a potential source of patient capital for business development in the state. Improving capital access, especially access to equity, has become an increasingly important component of economic development policy because of the growing recognition that small business drives our entrepreneurial economy. Half of all U.S. non-farm private output and employment was generated by small firms, those with 500 or fewer employees, in 2003.

Many state used public pension funds as the source of capital for companies with job-creation potential. But N.C. N.C. Treasurer Richard Moore did not believe that choice to be fiscally prudent or palatable among the constituency of retirees who had seen other states’ public pension funds head down this path before, and sometimes with disastrous consequences.

Moore instead targeted the state’s $600 million unclaimed and abandoned property, or escheat, fund as his capital source of preference.

With a successful legislative campaign behind him that allows up to 20 percent of the Escheat Fund surplus to be invested in private equity, this case study of North Carolina’s experience should be useful to other states whose pension funds remain out of reach as a source of economic development capital.


Topics(s): Community Development Finance, Financial Inclusion