How do redistributive institutions transform the relationship between resource extraction and regional development in high-income democracies? Large energy projects are now widely expected to deliver tangible benefits to affected communities, and benefit-sharing institutions have emerged as a preferred mechanism to channel these gains. Yet because these benefits are funded through non-tax, windfall revenues that political economy theories associate with rent-seeking and distorted spending, it is unclear whether such institutions truly foster development or simply repackage familiar pathologies. This paper examines the Columbia Basin Trust (CBT), created in 1995 to compensate communities affected by the Columbia River Treaty in British Columbia, Canada. Using the synthetic control method, we estimate that windfalls distributed by the CBT generate a small but positive cumulative effect on local economic development, roughly adding an additional year of growth over a decade. Additionally, analysis of grant allocations suggests that politically experienced and long-tenured directors do not systematically steer funds toward their home regions, indicating limited pork-barrel behaviour. Taken together, these results suggest that while standard political economy accounts of unearned income may be too pessimistic, benefit sharing is no panacea for growth.