working with communities to create opportunities philanthropic strategies for supporting community...
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Working with communities to create opportunities
Philanthropic Strategies for Supporting Community Vitality
and Entrepreneurship: An Example from Minnesota
2008 Community Foundation and Philanthropic Academy
February 4, 2008Des Moines, Iowa
Getting Started?
Identify opportunities in your area or county using all available data and resources
Assess what organizations are already doing in your area and across the state
Form collaborative relationships
Seed the startup of other organizations
Leverage resources
West Central Initiative: Context
8,615 sq miles, 125 x 85 miles, 9 counties, 83 communities
Population of 212,000
Lakes area, prairie and river valley
Rural small towns – largest is 33,000
“Minnesota Nice” prevails: teamwork and cooperation are part of culture
West Central Initiative: Context WCI is the only economic development organization
serving this specific region
501(c)(3) org, public charity
13-member Board of Directors and EDD Board
Work to build unrestricted endowment as a permanent resource for the region
We help communities plan and control their destiny
Local ownership of issues: solutions come from the area, from the people impacted
Grew up in relative isolation from other foundations
West Central Initiative: Challenges
1986 – rural economy struggling, people exiting farming, few jobs available, people leaving the region
Goal: equip people for the long term by providing resources through low interest loans and free technical assistance to business, and helping with basic needs
Then in 1992: learned that the job shortage we were currently facing would soon become a worker shortage – time to consider new approaches
West Central Initiative: Catalyst
For Revolving Loan Fund in 1986:
Needed more diversified economic base and more jobs
Manufacturing jobs paid higher wages and often matched skills of those seeking work
Businesses needed “gap” financing source
For Workforce 2020 in 1992:
Region had the lowest wages in Minnesota
Out-migration and aging population leading to labor shortages
Struggling industry - traditional rural low-wage business strategy fell prey to global competition
West Central Initiative:What Did It Take?
Revolving Loan Fund Workforce 2020
Goal: Increase number and quality of available jobs
Goal: “Improving Employment” by addressing workforce shortages & improving the value of work
Help businesses become stronger financially, become “bankable”
Invest in world-class training for workers, maximize their productivity and value
Create self-employment opportunities with microloans
Build capacity in area colleges to train people in high-demand skills
A “gap” lending program initially targeted to primary sector, later expanded to other sectors
An industry-driven incumbent workforce training program, funded by WCI and partners
Two complementary programs:
West Central Initiative:What Did It Take?
Revolving Loan Fund Workforce 2020
Partners: Businesses BanksSBDCs Economic Developers
Partners: Businesses MTI Technical Colleges, other training providers
About $9 million, started with $2 million, sources: Federal, State, local, foundations, donations, banks, communities
About 2 FTE
SBDC & SBM partnerships
Other gap lenders, e.g. SBA 504
Board committed $1 million in grant funds over four years, later up to $400,000 per year
About ½ FTE
Business match
MTI partnership
West Central Initiative: Results
Overall results for the region: No net loss of manufacturing jobs during recent recession
Decades of out-migration reversed, population growing by about 1% per year
Twice as many youth choose to remain or return later
Wages were last place among Minnesota’s 10 regions, now seventh
Globally competitive: companies bringing business back from Asia
Between 2001-2006, Minnesota lost 12.2% of its manufacturing jobs; our region experiences a 1.4% gain in manufacturing employment
West Central Initiative: Results
Revolving Loan Fund Workforce 2020
Over 5,500 jobs created/retained
Approved over 780 loans
Over $31 million in lending
Leveraged more than $140
million in other financing
Charge off rate 5.9% since inception
About 6 of every 10 manufacturing workers in region have been retrained (8,000 duplicated count)
Increases in manufacturing wage scales
Companies work hard to avoid layoffs and retain workers
West Central Initiative: Results
Three Examples:
Shoremaster, Inc.: Using workforce training to remediate a troubled economic development investment
Sunrise Machine & Tool: Substituting training for capital investment to strengthen a company
Rapat Corporation: Fully integrating economic and workforce development to rapidly realize maximized gains
West Central Initiative:Practical Lessons
Workforce development and economic development work best when addressed together
Small amounts can make a big difference for companies
Bringing cultural gap between businesses, government and educational institutions
Partnership-driven model requires much more time
Keeping up with growing demand—”Success Breeds Success”
West Central Initiative: Roles for Philanthropy and Government
Philanthropy can provide support for identification of economic and workforce issues and solutions at the local level and connections to data and research sources
Government can provide data and allow more flexibility in uses of funds for programs such as worker training or economic development lending
Getting Started?
Identify opportunities in your area or county using all available data and resources
Assess what organizations are already doing in your area and across the state
Form collaborative relationships
Seed the startup of other organizations
Leverage resources
Consider how you define prosperity….
What Does It Mean To Be Prosperous?
Isserman’s Four Measures of Prosperity:
Good housing
Jobs
Low poverty
Good education
“Prosperous counties are places with affordable and well-maintained housing; a well-educated
population; plenty of work; and few poor families.”
Andrew IssermanEconomist, University of Illinois
What Does It Mean To Be Prosperous?
Isserman lists 289 counties that meet his criteria
48 are in Iowa
Another 129 are in states bordering Iowa
187 of the 289 counties—nearly 65%—are in the heart of the Plains
These communities are not: all on four-lane highways or close to direct airline
service
tourist or retirement areas, recreational areas or even very high in natural amenities like lakes or mountains
What Does It Mean To Be Prosperous?
Jobs: “The prosperous counties have a more vigorous private sector, with more jobs per capita” and fewer transfer payments, Isserman wrote
Education: Adults in prosperous places have more education
Social: there are more places for people to meet
They grow more slowly than other communities on average
They are homogenous
from www.dailyyonder.com/rural-americas-most-prosperous-counties
The Point:
Prosperity is a function of things that are mostly
within local control.
“Geography is not destiny”
Andrew Isserman
Working with communities to create opportunities
Any questions?
Nancy Straw, PresidentWest Central Initiative