2008 Community Foundation and Philanthropic Academy February 4, 2008 Des Moines, Iowa

1. Philanthropic Strategies for Supporting Community Vitality and Entrepreneurship: An Example from Minnesota 2008 Community Foundation and Philanthropic Academy February 4, 2008Des Moines, Iowa

2. 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

3. 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

4. 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

5. 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

6. 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

7. West Central Initiative:What Did It Take? Two complementary programs:

8. West Central Initiative:What Did It Take?

9. 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

10. West Central Initiative: Results

11. 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

12. 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”

13. 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

14. 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….

15. 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 Isserman Economist, University of Illinois

16. 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

17. 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

18. The Point: Prosperity is a function of things that are mostly within local control. “Geography is not destiny” Andrew Isserman

19. Any questions? Nancy Straw, President West Central Initiative 218-739-2239 nancy@wcif.org