Community Vitality Center Governance Board Meeting Minutes

Cardinal Room, ISU Memorial Union, Ames January 10, 2003

Present: Dan Brown, Beth Danowsky, Jane Halliburton, Mark Hamilton, Rick Morain, Art Neu (P.M.), David Osterberg, Steve Padgitt, Randy Pilkington, Guy Powell, Doyle Scott, Tim Shields, Carol Smith, Mark Edelman, Sandy Burke, Stan Johnson

Presenters: Maxine Moul, Rand Fisher, Steve Noah, Jude West

The meeting of the Community Vitality Center (CVC) Governance Board was called to order at 9:30 AM by Mark Hamilton, CVC Governance Board President. Hamilton asked those present to introduce themselves and then asked Mark Edelman to review the agenda.

Edelman reviewed the agenda and the budget time frame for getting the CVC second year proposal into the approval process of the USDA.

David Osterberg asked if the Board would be able to consider any of the projects that had been screened out. Hamilton replied that 6 projects had been eliminated by the Executive Committee prior to peer review and that the process could be discussed, but that it would be hard to go back to those that had not been peer reviewed. Osterberg replied that he had liked the project on buying food locally and that such a project would use resources from the community and would be inexpensive to fund. Hamilton said that some good projects had been screened out but there was hope that the agriculture industry or others would fund them. There had been recommendations to those projects about other places to seek funding. Stan Johnson commented that the project might go to value added agriculture, an ag marketing grant, or to other resources at ISU.

Hamilton asked for a motion on the agenda and it was moved by Beth Danowsky and seconded by Dan Brown to accept the agenda. All members voted “I”; none opposed. Agenda accepted as written. Hamilton asked if there were any comments or revisions for the minutes of the October 11, 2002 Governance Board meeting. Doyle Scott moved to accept the minutes as written. Seconded by Guy Powell. All members voted “I”; none opposed. Minutes of the October 11, 2002 Governance Board meeting were approved.

Hamilton said that there was much to be done today and that there may be a need to merge some of the projects together. There had been a lot of energy put into projects 3 and 9 and that some combined version might be included.

Edelman distributed expense vouchers for Board members’ expenses. Edelman reviewed the proposed budget. Of the $268,800 total allocation, $50,000 is needed for CVC activities as outlined. There are some start-up activities of last year that are not needed this year, but there is a new $10,000 allocation for communications that wasn’t in last year’s budget. That leaves $218,800 for project funding. The budget sheet shows the amount requested by each proposal and the director’s recommendation for funding and/or merger. There have been some small changes in some of the proposals, but none that would affect their order or status. The project reviewers were Eric Hoiberg, Tim Borich, and David Lyons. Thirteen project proposals were peer reviewed and 6 were screened out before peer review.

Osterberg asked why project 15 is now recommended to be included under project 1. Edelman said that it would not be included in the proposal that would go forward to the USDA, but it would be included as an idea and not in its current form. Danowsky asked why project 2 was left unranked by reviewer one. Edelman said that was the peer reviewer’s response. He then provided additional information regarding project 2 as requested at the October Board meeting which included a report on the previous 10 entrepreneurship forums held last fall. Project 6 also had some similar issues with regard to reviewer 1 and so the peer review ranking was left blank as well.

Edelman proceeded with a review of projects 3 and 9 because they related to the morning agenda presentation at 10:30. Danowsky asked if a proposal had been received from Usha Balakrishnan at the University of Iowa as Danowsky thought that Balakrishnan had submitted one. Edelman said that he had not received anything from her in response to the November 1st RFP but that he would visit with her to clarify this.

Brown suggested merging the notion of community to a larger entity and he didn’t see that in this project. Edelman said that there are regional collaborations and Johnson mentioned a 17 county dairy foundation around highway 20 counties. Steve Padgitt said that community foundations may differ and that the original foundations discussion was focused on smaller areas. Carol Smith said she has been in two situations with foundations that have a community focus. Rick Morain mentioned that Maxine has experience with regional issues. Brown was concerned that there was neglect of regional collaboration. Hamilton thought that the sentiment of philanthropy related to a localized community. Edelman thought these would be questions for today’s workshop on foundations.

Tim Shields asked if the CVC’s role would be exclusively on entrepreneurship or if other aspects of communities and quality of life would be included and did the CVC decide what the role should be. Edelman said that a first decision would be whether to support an initiative for foundations and a second issue would be to look just at entrepreneurship or to leave it unspecified. Morain mentioned that we have a two year commitment on entrepreneurship and wondered if this project was shaped for entrepreneurship. He thought there could be a unique role for the CVC to bring some focus on entrepreneurship. Hamilton said that there was a shortage of financial capital for everything. Johnson thought that venture capital to fund a startup company was very difficult to find but a foundation for community efforts had a very different focus. Shields suggested that both were needed and gave the example of Lisbon bringing in artists to perform. Shields also said that we don’t have $300,000 to throw at this.

Hamilton commented that a lot of energy from a number of organizations had been put into the effort on foundations. He suggested the CVC take its money and find the synergies and help coordinate this and encourage the energy to come together. Shields said that we could be the dynamic that creates the synergy but another question is of the relationship of these together and to other larger entities. Edelman didn’t see the CVC developing a great expertise in this area, but rather would create a collaboration among the partners or create a more targeted effort.

Maxine Moul from the Nebraska Community Foundation was introduced and she talked about the development and functioning of the Nebraska Community Foundation (NCF). She handed out material and answered questions about the NCF organization. Powell commented that there may be several foundations within a county and more organizations were going that direction. Shields thought there was activity in Iowa’s metros but little beyond the interstate towns. Moul said that the wealth peaks were based on demographics and that the NCF helped people to find a vehicle for what they wanted to do. She said that IRS statistics on charitable giving can be done by county. Moul also said that a foundation might move into the area of funding entrepreneurship but that there needed to be care not to violate IRS regulations about philanthropy. Hamilton asked if University fund raising would be a competitor and Moul said that the NCF has a non-compete philosophy and policy and did promotions that raise philanthropic giving for everyone.

Rand Fisher from the Iowa Area Development Group (IADG) was introduced and he handed out materials and talked about his group’s work and the role of philanthropy in communities. Fisher answered questions from the Board.

Steve Noah, Director of Development for Extension with the ISU Foundation was introduced and he told of his experiences with the Jasper County/Newton Community Foundation. He told of the ISU Foundation initiative to establish local accounts for each county and answered questions from the Board.

Jude West from the University of Iowa Nonprofit Institute was introduced and spoke about the Institute’s efforts to build statewide awareness of the nonprofit sector. They have a web site which lists nonprofits. His group has concerns about what is being done in rural Iowa for nonprofits and service delivery. West answered questions from the Board.

West was able to provide a copy of the information submitted by Usha Balakrishnan at the University of Iowa on behalf of the Iowa Nonprofit Institute. It had been distributed at a joint meeting involving IDED, University of Iowa, and ISU. At the time, Edelman thought it was an educational project that was moving forward under the Nonprofit Resource Center leadership and it was unclear that it was a proposal to be held and considered in the next round of CVC projects. Copies of the information were made and distributed to the Board and it was treated as proposal number 20.

Shields commented that lack of leadership in many communities is a true issue and said that it may be a generational thing. Johnson thought there was lot of room for various types of foundations. Moul said that the NCF could not serve all of Nebraska’s communities and only worked with those who came to them. Noah talked about the management of assets in a foundation and spreading risk across various areas. Hamilton said that there was a potential for funding this in the CVC budget. Moul advised having patience and that it took 5-6 years before the NCF saw real growth and impact in communities.

Moul said that the transfer of wealth study came from a Boston consultant. She said that the NCF would be willing to share the methodology. She thought it was important to put a face to the wealth and show what a county or community transfer of wealth would be like. The local level focus was very important.

Morain mentioned the possibility of some sort of affiliation with the NCF. Moul said that some foundation boards could get overwhelmed. She recommended being very careful with the initial board, that there be real diversity in terms of geography, gender, minorities, a broad base of industries, and a broad base of contacts.

Scott asked if there had been any stemming of out-migration as a result of the NCF efforts. Moul replied that, compared with the 1990 Census figures, the 2000 Census showed population stabilization if not growth.

Smith said that the largest nonprofits available in rural areas were the churches and asked what linkages the NCF had with faith based organizations. Moul replied that the NCF board had made a conscious decision not to serve religious organizations. Fisher said he would not want to leave out churches. Hamilton said that there was a lack of a research base and facts and that the CVC could have a role in this. Hamilton noted that is was time to pause for lunch.

After lunch, Hamilton then asked the Board about how to proceed with proposals 3, 9 and 20. Shields commented that the three proposals represented areas of interest to the Board with regard to foundations. Perhaps it should be thrown back to the proposers and perhaps add some more money to it. Osterberg said that proposal 3 was wider and proposals 9 and 20 were more specific. Proposal 3 also had some expected outcomes but Osterberg thought there was too much money allocated ($15,000) for the wealth analysis. Hamilton said that in talking with Moul at lunch that she estimated it would cost more like $5,000 to $10,000.

Danowsky said that she would go on record supporting some funds for this from IDED. Danowsky did not like the idea of limiting the focus just to 3 or 4 communities, she suggested putting it into an education campaign, and she liked proposal 9 because it was broader. Hamilton mentioned having a printed product for each county.

Randy Pilkington said that a combination of 3 and 9 looked best. He suggested taking the next 3 months to put together a model of community foundations for Iowa and use the model from other states such as Nebraska and South Dakota. This could really change rural Iowa and we could sort out community betterment and entrepreneurship. We could make this a large priority but not put all the money out there now.

Brown made a general comment for discussion about the 20 proposals. He said that when there was money to dole out, one usually exempted oneself. He said he was bothered by funding $150,000 to be used among “us” and that there could be the possible perception of impropriety. Padgitt noted that one of the reviewers had made this same comment as well. Edelman said that proposal 3 was developed at the request of the Board in their October meeting and it did not specify who does the work. He said that perhaps one of the groups presenting here today could actually do it under contract. He added that we were looking for some organization to carry out getting the 5 or 6 groups together and to see how they could collaborate. It was a starting point and not the foundation program itself. Edelman said he did not see the foundation program as something that the CVC would do itself.

Smith said that there was a real need in Iowa for a “convener,” a group that brings things together. Perhaps the CVC could be viewed as a convener rather than a funder. Pilkington said that the CVC and Edelman would be the ones to do this. Hamilton said that he could see Brown’s point, but that several on the Board went to an introductory meeting on foundations and were interested in such a project. Danowsky said she had a conversation with Lars Peterson after the last CVC meeting and that he did a lot with a small budget. She wondered if some of the pieces of the foundation proposal could go over to them. Danowsky said she remained concerned about awarding $150,000 to the CVC. Edelman pointed out that the SBDC was a co-lead on $100,000 of that total.

Hamilton remarked that we could take proposals 3 and 9 and say that this is what we are trying to accomplish and turn it over perhaps to Rand Fisher. Shields commented that on their own alone the individual groups had not created anything as wonderful as what we heard today from Nebraska and that we should bring these together in collaboration. Hamilton said that we could create a board. Pilkington’s thoughts were that we needed a convener, Edelman or someone appointed, to fund these 3 organizations to work together to organize this umbrella organization. Brown said that approach would be cleaner. He continued that those of us know where proposal 3 came from but that competition was there.

Hamilton asked about why the CVC would fund proposal 20 from the University of Iowa. Shields said that it focused on leadership development and that was needed out there. Danowsky asked if we were now considering proposals 3, 9, and 20 as collaborators with the IADG as the lead. Johnson suggested that the CVC ask the leaders of these 3 proposals who were here today that if they are funded would they put together what they could do. He added that maybe Extension could put some funds into it as well. He also said that Rand Fisher had money from the Rural Electric Cooperatives and maybe they should put some funds into this to help us get a foundation established. Johnson added that from the conversation around the table, the CVC wants to see a statewide organization broader than anything submitted in the 3 proposals. Shields asked informally for a show of hands for how many wanted to see us create something like or better than what Nebraska has and all raised their hands.

Johnson said that the 3 proposals would now see that the CVC was interested. Pilkington added that we have the opportunity to get these groups to collaborate. Powell commented that Moul had the support of the Nebraska governor to get this going and he asked if we would have to get the Governor in on this. Shields said it might be best to have a solution to the issues before bringing it to them. Brown added that it takes some time to get things onto the government time line. Johnson said that his inclination would be to have a plan to take to the Governor. Shields recalled that Moul had said there had been some initial resistance to such a Nebraska foundation. Johnson added to show that the peak of transfer of wealth in rural areas was going to be ahead of the urban areas. Hamilton asked if all were in agreement to come up with $10,000 to put the research packages together. Stan suggested asking Moul for the template.

Smith asked to have it restated what was now suggested. Pilkington said there should be a phase 1 part to gather the data first. It would include the transfer of wealth study, looking into other states foundation programs, and getting an idea of how many Iowa foundations there already are. Pilkington went on to say that then there would need to be a determination of what the structure of the governing board should be. He suggested to fund phase 1 and the come back and fund phase 2. Danowsky commented that Fisher had gathered lots of wealth data but had not done the wealth study. Pilkington said that we should put this together and bring the 3 groups together.

Johnson added the suggestion that after the 3 proposal groups work together there should be a “road map” about how to do this in Iowa. We would want them to come back and talk about how to do it and then have it created in, say, two years. Osterberg added that another reason to have it work in this way was that what they would create together would less likely to be in the way of what they were already doing. Morain said that we should have a presence at these group’s meetings. Smith said we should be the convener, the one setting the goals. Johnson said to take the 3 proposals and bring the leaders of the proposals together with a subcommittee of the Board. Osterberg said that then with the second step we would have the money to go on. Shields mentioned the wealth transfer study. Sandy Burke said that it was likely based on secondary data. Brown mentioned the Census of Agriculture.

Edelman said that the two phase part of the program was fine. There had been general agreement on the Board so far for $10,000 for the research part and asked if that would then mean $30,000 to kick off phase 2. Shields asked Edelman what he would recommend and Edelman said $50,000. Pilkington said that we were not only talking about the wealth study but also more than that with finding out about foundation programs. Johnson said that proposals 3 and 9 each had significant money requested for a demonstration project and that it would seem that we are not ready for that part yet.

Pilkington suggested to reserve $50,000. Padgitt said that we want this to get underway and to set aside some contingency money and asked if there is enough for phase 1. Edelman said the research projects are for funding immediately. Hamilton asked how long would it take to get the data and the study. Replies from Shields, Osterberg, and Pilkington were semester, 3 months, 6 months. Brown said that would mean that there could be more at the June 20th board meeting. Edelman said that there could be contingency money to get started and then reimburse them.

Johnson said to set aside up to $50,000 and spend as much as needed to get the 3 proposals together, direct the appropriate base line studies, and then provide a plan on how to get to the creation of a foundation organization. Osterberg said he would argue against $50,000 because if all the $50,000 is spent then the demonstration would not have any funding. Scott suggested giving them $20,000 and then when we come back in 3 months in April we can get an interim report. and see how much is needed. Pilkington asked what was needed for filing with the USDA. Morain noted that Fisher’s article talks about what they did and that Moul had said that $5,000-$10,000 would likely fund the wealth study. Edelman said that the proposal to the USDA would have to show setting aside $50,000 and there would not be any additional funds for this year. Shields said then that we would be convening the 3 groups, telling them what we wanted to accomplish, and setting aside $50,000.

Brown moved to accept what Johnson had outlined that $50,000 be set aside and spend as much as needed to get the 3 proposals together, direct the appropriate base line studies, and then provide a plan on how to get to the creation of a foundation organization. Pilkington seconded Brown’s motion, Danowsky called the question, and the Board voted “I”, none opposed. Motion carried. Pilkington, Shields, and Edelman were to be the convening committee for this combined proposal of 3, 9, and 20.

Edelman asked how to proceed with the remaining proposals. Jane Halliburton suggested following the priorities of the peer reviewers. Hamilton said that there was sort of a flow to the other proposals.

Edelman said that proposal 2 was to fund some level of community conversations on entrepreneurship and that the previous conversations demonstrated that communities were not necessarily in sync with what was available for entrepreneurship. Edelman said that proposal 1 was for demonstrations that would build on the previous set of community conversations and that proposal 12 was focused on technical assistance available for entrepreneurship developed by the Rural Business Accelerator Program (RBAP). Pilkington said that the 3 proposals were complementary rather than competing and that he would support all 3 although he had originally been reluctant to fund the forums. Edelman said that he wasn’t recommending funding proposal 2 but recommended considering it as one of the 10 mini projects under proposal 1 and also would suggest cutting the funding request of proposal 1.

Pilkington pointed out that proposal 1 was done by the SBDC, proposal 2 by the Iowa Peace Institute, and proposal 3 by the RBAP. Hamilton said that the proposal 2 forum conversations were important as the first steps of the 3 phase process. Padgitt said that proposal 2 should be merged because two of the reviewers gave it a “do not fund” recommendation.

Edelman recommended that there still be 10 community forums but that they should be done in a less expensive manner and to allocate $10,000 instead of $20,000. Some of the other proposals could fit into demonstration projects under proposal 1, especially 16. Proposals 8, 13, 14, and 18 all had elements of entrepreneurship. Halliburton added that the peer reviewers had recommended 1 and 12 and adding 2 to them. Edelman recommended that proposal 1 could be cut by $30,000. Smith said she liked the sequence of the forums followed by taking a look at the pilots and providing technical access for those pilots that want to go further.

Shields moved to adopt proposal 1 as amended, to include proposal 2 as a subset with reduced funding, and to include 12 as recommended. Morain seconded the motion. The funding would be $90,000 for proposal 1, $10,000 for proposal 2, and $45,000 for proposal 12 for a total of $145,000.

Osterberg said he wanted to divide the projects and that it was too much money for proposal 1. Edelman said that the $90,000 would allow 9 demonstrations in proposal 1 plus the community entrepreneurship forums. The demonstrations would be coming from the forums and the other proposals that have entrepreneurial ideas. Smith asked if that meant reopening the request for demonstrations. Edelman said yes that would mean reopening the demonstrations and soliciting other demonstration proposals. Hamilton asked how would the demonstrations be selected. Edelman said by the project teams.

Osterberg said that maybe some of the funds should be held back for those who want to go another step. He wondered if there was a need for 10 more of what had already been funded. Hamilton said that there might be growth and noted that in the Mainstreet program there were only 3 communities in the first year but by the second year it was hard to get in. Smith asked whether they were talking about pilot projects or conversations. Edelman said pilot projects as there were currently funds set aside for 6 pilot projects from the first round of funding and that this would be another round of pilots from the second year of funding. He thought that leaving $50,000 unallocated would raise questions with the USDA. Brown added that, yes, it would be a problem as that would be about 20% of the CVC’s allocation.

Morain noted that this would be the second year of entrepreneurship funding. Padgitt asked if there actually were proposals for demonstrations. Edelman said that he already had 2 proposals to be funded under the first year budget and that there would be more by the February 1st deadline. Hamilton asked if there might be a reason to drop back to 6 pilots as funded in the first year budget. Edelman said that the 10 first year communities were eligible for the pilot project funds from the first year.

Hamilton suggested going through the proposals and seeing how much money was left. Morain withdrew his second to Shields’ motion and Shields withdrew his motion which was on the floor.

Osterberg moved to accept proposal 12 as fully funded and Shields seconded. Edelman requested authority to work on the suggestions that came back from the reviewers to work with the proposer on budget details. Danowsky asked Pilkington to comment on proposal 12. Pilkington said that RBAP needed to get this funded in order to take their program to the next level. He said that there had been lots of response from communities that could implement this. Brown called the question. The Board voted “I”, none opposed to accept Osterberg’s motion to fully fund proposal 12.

Edelman reviewed proposal 4 that focused on the factors and strategies in rural county migration. He said he recommended a cut in the funding request to $23,800 as it would rely some on center staff. However, he envisioned that additional funds were needed and could potentially be found from other sources. Morain noted that reviewer 2 said not to fund proposal 4 and he asked Burke if there were other studies that had already done this. Burke replied that there were general studies but not at the localized Iowa level proposed in 4 nor were there any that focused on what local leaders might do to slow the out-migration. Brown said that other proposers were not able to answer questions about proposals or defend them and he said that is was not appropriate for Burke to comment.

Hamilton said that the amount of population churn into and out of counties was amazing and that most communities don’t recognize that. Smith said that the migration study would add depth to the work that the CVC was asking of the foundation effort. Halliburton said that while the focus was on rural in the proposal she asked how it would be decided which would be considered rural. She said that in Washington D.C. all of Iowa was considered to be rural. Edelman said that different sets of counties would be used. Hamilton added that one of the goals of the CVC was to stabilize population. Halliburton said that some urban cities were losing population. Padgitt said that the migration study would give local folks some ideas of what they might do to stem the flow of out-migration. He added that there might be ways to choose what leaders should do and that the proposal’s budget was appropriate given the challenges. Smith commented on the support letter written by Cornelia Flora and that she had noted a need for local outcomes and that the proposal would likely lead to new findings in this regard. Edelman said that the project would be looking for actionable outcomes. Pilkington said that there wasn’t any mention of new Iowans in it and suggested someone like Mark Grey be included. Osterberg moved to fund proposal 4 at the level of $23,800. The motion was seconded by Scott and the Board voted “I”, none opposed. The motion carried and proposal 4 was approved.

Brown said that there now was $100,000 left on the table. Shields said that we had exhausted the projects which the director had recommended. Pilkington said that proposal 6 was about delineating trade areas. Edelman said that perhaps Dave Swenson was also doing something on this. Johnson confirmed that Swenson was working on this topic.

Danowsky said that she would move to allocate $60,000 to proposal 1 with 2 included and allocate the other $40,000 at the next meeting to demonstration projects. Osterberg seconded. the motion. Johnson suggested allocating all the $100,000 now to proposals 1 and 2 and go ahead with $60,000 as suggested but set aside $40,000 to be held and redirected at a later time. Brown added that Congress expects funds to be spent. Powell called the question and the Board voted “I”, none opposed and the motion to allocate the remaining $100,000 to proposal 1 with 2 included passed.

Johnson said he had some concerns that the SBDC would be the lead agency for proposal 1. Padgitt expressed concern that the money should not look like an “inside job.” Hamilton asked if there were any other comments on the proposals and there were none. Edelman said there needed to be a motion approving the whole budget. Shields moved to approve the whole budget, Halliburton seconded, and Danowsky called the question. The Board voted “I”, none opposed and the budget was approved.

Hamilton discussed the three media proposals that had been submitted and said he thought the Zimmerman (B) and Audino (C) proposals were most on target. Edelman said that he was not sure the Board could make a decision today. He suggested that he, Hamilton, and another person or two from the Board interview the people with the proposals. Edelman asked the Board to review the proposals by next Friday (Jan. 17) and email any comment or concerns to him as they would try to do the interviews next Friday. Johnson said that the Dunshee firm was already under a large contract. Danowsky suggested interviewing all 3 even if there were some concerns about one of them.

Edelman said that the next Board meeting was scheduled for April 25th and that date was selected based on the funding schedule. There were date conflicts for Board members and the date was changed to Thursday, April 24th. Edelman said that the focus of the next Board meeting would be on project reports from the first year group. Shields also asked for a discussion on looking for other funds for the CVC.

Hamilton distributed a form for Board members to give their preferences for their term time. Edelman said that Dan Offenberger had resigned from the Board and that President Torgerson from Luther College may also resign. The Board terms should be such that one-third finish each year. There would need to be 6-7 Board members with a two year term and 6-7 with a three year term. There would still be possibilities for members to serve a second term. Hamilton said that the Board still was short on private sector people. Edelman said there were some others who were interested in being on the Board and that he wanted to develop and go through a nominating process.

Edelman said that the final report on the entrepreneurship forums would be out in the next few weeks. The rural development ICN and education project had been completed. The county recorders project was coming along and that report was being written. Padgitt said that there needed to be diversity on the Board and diversity among who was funded. Johnson said that Extension was in the process of working with students here on campus on a fixing up the community blitz during spring break. If the CVC would like to have a way to be involved he would send around the information.

Hamilton asked about the status of the CVC web site. Edelman said that a draft web site would be ready soon. The address is: www.cvcia.org. Halliburton said she was having trouble opening attachments.

Shields said that he appreciated all the work that had been done on the proposals by the Executive Committee and by Edelman.

Osterberg moved to adjourn the meeting. Seconded by Pilkington and the Board voted “I”, none opposed and the meeting was adjourned.