Community Vitality Center

Meeting of the Governance Board

Gold Room, ISU Memorial Union, Ames, IA

October 10, 2003

Present: Mark Edelman, Burt Chojnowski, Jane Halliburton, Lars Peterson, Joan Phillips, Sue Cosner, Beth Danowsky, Carol Smith, Doyle Scott, Guy Powell, Jim Erb, Rand Fisher, David Osterberg, Dan Brown, Steve Padgitt, Stan Johnson, Mark Hamilton, Rick Morain, Sandy Burke, Laura Klesel, and Pat Stephenson.

The meeting of the Community Vitality Center (CVC) Governance Board was called to order at 10:10 A.M. by Board President Mark Hamilton. Hamilton asked those present to introduce themselves. Mark Edelman noted that the minutes of the previous meeting were sent by e-mail. Per Board procedure, no corrections or additions were requested during the two week comment period. Thus they have been posted on the CVC web site. Joan Phillips moved to approve the minutes of the June 27th meeting, Jim Erb seconded, minutes approved.

Director’s Report:

Mark Edelman reported that the CVC received final USDA approval on it’s year 2 Center Grant submitted in February. Approximately $70-$80,000 is currently retained by USDA pending approval of subcontract that will be submitted later after Year 2 community demonstration projects have been selected. Rest of the funds are here at ISU. Edelman noted that CVC has received preliminary approval from Congressional appropriation for Year 3 funding.

Mark Hamilton reported on discussions that provided Rich Bender of Senator Harkin’s Office with a briefing of CVC projects and two major initiatives: The Entrepreneurship projects and the Community Foundation Initiative. Hamilton expressed thanks on behalf of the CVC board for the Senator’s support.

Administrative Report:

Stan Johnson reported that Extension and Experimentation budgets do not benefit from rising student tuition dollars. Therefore these portions of the university budget have experienced larger budget reductions from public funds. He then discussed the activities of Extension advisory and support groups. is group if they are so inclined. Need between $1 and $1.5 million from Legislature. He mentioned a changing emphasis in that Extension needs to become a more grassroots organization, coming from the people of Iowa. Extension will soon announce broadband communication services that supports educational video conferencing to all 99 counties.

Hamilton asked about status of overhead funding and space. Johnson indicated no change from internal discussions and suggested that external discussions may help move the talks forward. Edelman indicated during year 1 the overhead was 0, for year 2 it was 13 percent and it is scheduled to increase to 26 percent for year 3. Edelman indicated that UNI charges 13.5% for this class of projects.

Board Member Reports:

Mark Edelman distributed copies of the August September Iowa Commerce Magazine of the Association of Business and Industry. The magazine features an article by Rand Fisher, Iowa Area Development Group that introduces the Community Vitality Center and its vision.

David Osterberg distributed three studies commissioned by the Iowa Policy Project on Renewable and Wind Energy. One was co-authored by the Community Vitality Center Director. Osterberg indicated that the full reports are available on IPP website: www.iowapolicyproject.org

Dan Brown, USDA Rural Development State Director mentioned that funds remained available nationally for renewable energy projects.

Stan Johnson also mentioned that ISU (CIRAS) has received money for biorenewable energy. ISU involved in 3 of 19 awards given across the country. He suggested that CIRAS come to a future CVC Board meeting to present information on their programs.

Carol Smith gave a report on the planning for the October 21 Sirolli workshop in Audubon. This is a 5-county workshop that includes local development corporations, extension and the faith community as local sponsors. It is one of six CVC sponsored Community entrepreneurship development pilot projects. The registration was at currently at 70 people and the expectation was for 100-150 people to attend.

Burt Chojnowski, gave an update on Fairfield Entrepreneurs Association (FEA) activities at the Iowa Venture Capital Conference and a recent presentation over the ICN to community leaders. The Venture Capital Conference was on October 2nd in Des Moines. There were 600 attendees. In addition, Chojnowski reported on the CVC entrepreneur mentoring project and that he expects to schedule meetings in November with other communities that have expressed interest in developing entrepreneurial programs similar to Fairfield. Beth Danowsky, Executive Director of the Iowa Rural Development Council, talked about the positive energy that the Fairfield model created.

Edelman mentioned that a third CVC community pilot entrepreneurship development project is called the Northwest Iowa Regional Entrepreneurial Conference and is scheduled on Nov. 4th at NWI Community College in Sheldon. This project is being planned by local development groups, Extension, SBDC, and Community College. The program will feature Joann Stockdale, President of Northern Iowa Diecasting, Inc and SBA Iowa Small Business Person of the Year and National Runner-up.

Board President Hamilton offered to move up several things on agenda to accommodate those who needed to leave early.

Community Philanthropy Initiative

Transfer of Wealth Study:

Sandy Burke talked about transfer of wealth study and the alternative methods being considered.

• The Nebraska study was based on a Boston College study of national wealth transfer for the next 50 years.
• Using preliminary data, Iowa will likely have 1 ½ to 2 times the wealth compared to Nebraska during the next 50 years.
• Due to demographics, rural counties will have a greater proportion of wealth transfer during the next 20 years compared to the metropolitan counties.
• Iowa has county information on fees for estates that may used to estimate estate values for validating the county estimates.
• Iowa’s study will need to be completed by March

Jim Erb noted that the survey needed to be directed to the county-level, need statistics that work in the counties, not state level. Urged Sandy to keep in touch with the Minnesota Community Foundation as a model.

Stan Johnson’s observation of model—50% of Iowa farmland is not owned by the people who operate the farm, or maybe even live in Iowa. Means the income goes outside the state.

Market value vs. assessed value difference brought out by Jane Halliburton. Timeframe of March might be subject to confusion because property tax assessments are released at that time. The difference between market value and assessed value should be stressed.

What does wealth look like in “your” county? Rand Fisher thought the Nebraska study showed this very well.

Community Foundation Survey Process & Draft:

Mark Edelman discussed the draft Community Foundation Survey and encouraged comments from Board for improvement. The purpose of the survey is to help identify training and assistance needs as well as to identify successes and barriers facing community foundations. The survey process is to be designed to cover existing community foundations and there is a need to make contact with an appropriate network of community leaders for communities that do not have a community foundation. The CVC plans to work with the Iowa Nonprofit Resource Center at the University of Iowa to implement the survey process.

It was suggested that the survey be sent to community librarians. Mr. Fisher, talked about redundancy in giving—is there computer software to track this. Needed a question in survey as to how long they might be involved.

Carol Smith suggested a sample of limited interviews in the survey. Sandy mentioned that there are very few communities with foundations for raising funds. Joan Phillips said that Manning had 4 foundations but they don’t know what resources are out there to help these foundations with raising money.

Board Comments on Proposed Endow Iowa Administrative Rules.

Edelman distributed draft copies of the Proposed CVC Board Comments. Edelman stated that the current version included revisions suggested by the CVC Philanthropy Task Force.

• Rand Fisher made comments regarding the need for local community foundation affiliates to be guaranteed portability of assets without penalty.

Recess for Lunch

Mark Edelman asked for additional comments on proposed endow rules. Asked for motion regarding portability be added to comments. Guy Powell moved and Rick Morain second, motion passed.

Rand Fisher made comment that administration rules can’t rewrite the legislation. He expressed hope that legislation might be first step in having the state embrace endowment incentives rather than creation of period of greater urban/rural tension.

Rick Morain suggested that the comments were consistent with the analysis from last Spring’s report and meetings and may help to generate some change.

Stan Johnson said a compromise could be made by softening the language but still raising issues.

Beth Danowsky asked whether there would be a way to extend ourselves as assistance and say since this legislation passed this way, is there a way for us to make it work under the Endow Iowa umbrella?

Beth Danowsky made a motion to maintain the examples of concerns, adjust and soften the recommendations regarding ethics and constitutionality and then to go with it; Burt Chojnowski seconded, motion carried.

Burt Chojnowski also mentioned that the Iowa Venture Capital Investment Board he sits on might be able to provide some oversight on managing tax credits.

Nationally Certified Community Foundation Status.

Mark Edelman indicated that 10 Iowa foundations had approved letters of intent to become nationally certified by the National Council on Foundations standards. This is required to be a depository community foundation for matching grants and tax credited permanent endowments under the new Endow Iowa law.

When asked if we are going to help any entity who asks or is the CVC going to sponsor a certified community foundation? Edelman suggested that the service bureau concept that the CVC Board approved in June would not be aligned with any one community foundation, would provide research based information as well and neutral third party expertise, and could collaborate with a variety of entities.

Carol Smith commented of building networks, instead of creation of an umbrella for rural foundations.

Rick Morain said Nebraska benefits from professionalism of managing funds. A network provides connection.

Edelman indicated the service bureau as currently conceived in the initiative approved by the Board in June would not necessarily employ a professional fund manager, but would be able to assemble a panel of professional fund managers that would be relevant for the particular circumstances and preferences of the community.

Sandy Burke indicated that Minnesota developed a regional community foundation concept in contrast to the Nebraska approach of having one statewide community foundation.

Beth Danowsky asked if the service bureau was to help local leaders by identifying and examing options, but not provide a fund manager? Mark Edelman said yes, the service bureau would be more educational and technical assistance oriented and could tap the appropriate expertise from community foundations and other resources depending upon the nature of the local problem being addressed.

Stan Johnson pointed out how ISU Foundation has expertise that might be helpful. For example they are the fund manager for the 4-H Foundation.

Rand Fisher suggested that creating a few real success stories might be more beneficial than anything. The Service Bureau would really need to grab a hold of a few community projects and really help them.

Johnson said it might be helpful to do some education programs to communities in helping them to raise money. He said, creating a better giving culture in Iowa will help all foundations.

Mark Hamilton asked if there was a need to provide pilot assistance projects to help any rural oriented community foundation to become nationally certified since nearly all of those that have expressed interest in national certification are based in urban centers? Edelman suggested that two possibilities include the Iowa Area Development Group and the Grow Iowa Foundation. The first is forming a new foundation, the second has a foundation that has existed for about ten years but has focused on housing and assistance to small business startups rather than community projects and endowments.

Mark Hamilton questioned if we would become so fragmented that it accomplish nothing. Beth Danowsky didn’t think it had to, used Fairfield as an example. She thinks even if you do just go with 2 pilots, it will generate more discussion from other communities and grow state-wide eventually. Burt Chojnowski agreed with starting small at grassroots and growing to statewide if opportunity presents itself.

Guy Powell asked whether there were any communities in Iowa that currently do a good job in philanthropy without the Endow Iowa incentives? Edelman responded that Manning was probably the example that has received the most notoriety.

Joan Phillips asked if Iowa Area Development Group would be receptive to university Foundation expertise and assistance? Rand Fisher, IADG, said at this point his group has had some discussions with the Greater Kansas City Community Foundation and is open to exploring any powerful partnership, including a potential collaboration with the ISU and U of I Foundation.

Rick Morain asked is it the Board’s concept was to create one or more powerful partnership? Burt Chojnowski wanted CVC to work both from the top down and bottom up. Rick wanted to have a target date set on our direction as to whether or not we want to create a state-wide initiative. David Osterberg said we need to vote on it by next meeting in January since that is the meeting in which we make budget commitments for the following year. Guy Powell said being from SW Iowa he wanted to see us still work from the bottom up, not just from the top down. A consensus of board discussion suggested that the philanthropy initiative should have a goal of having one or more vehicles on line for use by rural communities by July 1st when the Endow Iowa incentives become available.

Discussion of Entrepreneurship Project Implementation:

Edelman reported that the Entrepreneurship Initiative approved by the Board in June is being refined and currently embodies a concept that would have four levels of offerings.

1. Level 1 offerings—Community Forums and Speakers Bureau to stimulate vision
2. Level 2 offerings—Community pilot demonstrations to develop entrepreneurs
3. Level 3 offerings—Technical assistance providers help communities & entrepreneurs
4. Level 4 offerings—Statewide community-entrepreneurship networking activities

Edelman indicated that the CVC board will need to decide in January how much to allocate to each level. Hamilton asked Burt Chojnowski for assistance in how funds could best be used. He asked if we want to continue with initial pilot projects or go with new ones. Burt said he needed more time to review this and would get back to Mark E. on this. Lars Peterson said he sees the role of the CVC to help change the community culture so that it is more conducive for entrepreneurship, and to continue to develop entrepreneurship in partnership with others.

Suggestions for guidance would be welcomed by Mark Edelman regarding the concept or ideas for creating greater impact. Lars said he would like to see Extension and SBDC work together to involve librarians and others to help entrepreneurs.

Monthly Newsletter Plan Discussion

Mark Edelman called attention to the Newsletter plan and invited board members to offer suggestions of contact groups for the initial newsletter emailing list.

Year 3 Project Development Options.

Edelman discussed the blue sheet that outlined 3 alternative approaches for Year 3 project development.

Guy Powell moved that CVC adopt Option B. Second by David Osterberg with reservation. After some discussion, the original motion and second was withdrawn. Powell then moved to adopt Option C and fall back on B if necessary, Osterberg seconded, motion carried.

Next meeting is January 9th (Friday). Site not yet determined.

Major initiatives entrepreneurship and community foundations will be most of discussion in January.

David Osterberg moved that the meeting be adjourned, Burt Chojnowski second, motion carried.

Meeting Adjourned at 3:00 P.M.