Community Vitality Center

Meeting of the Governance Board
Graceland University, Lamoni, Iowa
April 21, 2005

Present: Beth Danowsky, Jim Erb, Lars Peterson, Kevin Prine, Ed Raber, Severin Roberts, Manuel Silva, Carol Smith, Nancy Van Milligan, Mike Wells, Maureen Collins-Williams (substituting for Randy Pilkington), Mark Edelman, Sandy Burke

The meeting of the Community Vitality Center (CVC) Governance Board was called to order at 9:30 A.M. by Jim Erb, CVC Governance Board Vice Chair.

Mark Edelman thanked Kevin Prine for hosting the Board meeting at Graceland University. Prine gave an overview of Graceland University, the Decatur County area, and the Entrepreneurship Roundtable that would be held in the afternoon. Mike Wells added that Graceland had been willing to partner on programs and projects with school districts in the area.

Erb asked for reports. Edelman reviewed the status of the USDA Grant. It was submitted on time with the philanthropy section written for $50,000 focusing on technical assistance. The form for delivery of the technical assistance will be determined at a later Board meeting as the specific needs are prioritized. Edelman noted that Mark Hamilton was in Washington, D.C. with an Extension Leadership that was making visits to Iowa Congressional Delegation members.

Edelman reported that CVC was represented on the Review Committee for the Endow Iowa $25,000 Matching Grant Program along with the Farm Bureau, Iowa Association of Business and Industry, Iowa State Association of Counties, Iowa Nonprofit Resource Center, and Iowa Council of Foundations. Eighteen applications had been received and six matching grant awards were announced. The continuation of the Endow Iowa program will depend on approval by the Legislature. Most of the applications, with the exception of the Southeast river counties, came from the northern 2/3 of the state. Since these grant applications needed a $25,000 match, some of the southern Iowa counties with fewer resources may have had more difficulty in applying. He suggested that CVC may want to consider targeting some technical assistance to the lower income counties. Van Milligan thought that another factor in the current round of grant applications was a greater readiness of the community foundations in the northern area of the state.

Sandy Burke gave an update on the Rural Migration Study. A first draft of the questionnaire is nearing completion and will then be sent to those who had agreed to serve as a review committee. The next step after the questionnaire will be the selection of the communities or counties to participate in the survey. It is anticipated that the names and addresses of the respondents to be included will be obtained from Experian, a database and marketing company. There will be review of the questionnaire by each local community before it is sent.

Manual Silva commented about the Endow Iowa grants. He thought that some of the smaller counties simply did not have as many leaders ready and willing to work on endowments. He also thought that the attitudes and perspectives of the leaders were important for generating interest in applying for a grant. Beth Danowsky added that in her home of Keokuk County many thought they were disadvantaged and that they were truly amazed by the wealth transfer information. Carol Smith said that with the wealth transfer study, people now see themselves as having something. Silva added that with the wealth study people not only saw how much they had, but also saw how much less they had than some other counties. There were further comments by Erb, Danowsky, Smith, Van Milligan, and Edelman about the legislative proposals for providing more tax credits and also the Congress changing the federal estate tax.

Edelman indicated there were 114 people pre-registered for the Philanthropy Academy and with walk-ins there would probably be around 130. With just a few minor changes, the program was as previously promoted. The IDED Philanthropy Working Group requested CVC to include some questions on technical assistance needs on the academy evaluation form.

Edelman said that the statewide networks of information brought together and shared at the Working Group meeting indicated that all counties except for five or six have developed plans for applying for the gambling distribution status. He noted that none of the community foundations were as yet officially certified by the National Council of Foundations. It could be that some counties might have chosen to affiliate with a foundation that doesn't meet the national standards, which means that they may have to re-affiliate with a different qualified community foundation that is approved by the National Council. Van Milligan said that she thought there would be an extension of the due date and also a second application period in August.

Edelman noted that Stan Johnson, Vice-Provost for Extension had announced his retirement. Johnson has been instrumental in the development of the CVC. Johnson has indicated that he plans to stay until next Fall.

Erb asked for discussion on the business items. Edelman reviewed the alternatives for the philanthropy technical assistance from the proposals at the last Board meeting. The CVC Executive Committee had looked at the proposals and had suggested some guidance. The Iowa Council of Foundations (ICOF) had requested $40,000 to administer the technical assistance for the CVC. Edelman met with the ICOF and talked about the CVC mission and focuses and had suggested that the CVC and ICOF collaborate on the technical assistance. However, the ICOF Executive Committee decided that they were not interested in a partnership at this time.

The CVC Executive Committee suggested to hold on the allocation of the philanthropy funds until after the May 1st HF2302 application deadline and until the Legislature adjourns to see if any funding is allocated to the ICOF for technical assistance and to further identify technical assistance needs of local affiliates.

Edelman continued regarding the CVC technical assistance alternatives. One suggestion is to take the $40,000 and distribute it $1000 each to all the nonmetro counties that apply for technical assistance to be leveraged with local funds. One thought was that this would generate local connections to the CVC and provide a means of gaining reports of best practices and success stories. A contrasting view was that this may distribute the funds too thinly. A third views as that CVC instead might provide a flexible dollar amount and target more resources to counties with fewer resources. Another suggestion was to begin a reporting system to assess what counties are doing. There is still some interest in exploring the website proposal and that templates might be useful if the qualified foundations were not providing these.

Tentatively, out of the $50,000 allocated for philanthropy, $10,000 was set aside for philanthropy coordination and educational activities, leaving $40,000 for local technical assistance projects and initiatives.

Erb thought that it was premature at this time to identify a specific project or approach for funding. With the activity going on in the state, it was important to get more input on how to best spend the $40,000. Silva added that the counties identified for Enterprise Zone qualifications were distributed across the state, not just in southern Iowa. He thought it might be useful to use such a targeted approach to identify the counties and areas for the philanthropy funding. Erb added that eventually all the counties in the state will be covered with a foundation or as an affiliate.

Van Milligan asked what the CVC's goal or mission on philanthropy has been and how it developed. Edelman said that the Board noted that 2 years ago there was little philanthropy activity in nonmetro Iowa. After hearing information about the Nebraska Foundation, the Board wanted to develop such an initiative in Iowa. The first steps involved drafting of a statewide private sector philanthropy development plan and the commissioning of a transfer of wealth study and survey of existing community foundations. As the plan was being implemented, the first proposals were coming out of the legislature and CVC learned of the ICOF efforts to use public sector dollars to incent philanthropy statewide. When the legislation was approved, the CVC Board decided to work with the policy that had been passed to assist in maximizing the benefits for Iowa and nonmetro counties in particular.

Erb noted the CVC had a niche in reemphasizing the transfer of wealth in that long term that represents the greater potential for communities than does the incentives. He thought that the transfer piece was being neglected currently because people are trying to position themselves for receiving the gambling revenues, but that wealth transfer was the longer-term part of philanthropy and could generate the greatest lasting results. Roberts added that now more is known about best practices than two years ago. Smith said she could see our niche to be around the wealth transfer piece, but there was also a need for capacity building, objective information, and technical assistance and this is part of CVC's role. Erb was concerned about targeting just a few counties as being too narrow politically.

Van Milligan reviewed some of her activities with rural areas. She said that some of the community foundations could do training and capacity building across the state. The Iowa Council was planning to allocate some funds for developing statewide awareness and the ability to build endowments. Smith commented that the local effort was critical and that she would prefer to see a toolbox rather than a curriculum. Smith added that the CVC had started out with entrepreneurship but then moved to the philanthropy issue as well as a way to get more resources to facilitate entrepreneurship.

Erb related the idea of a Decorah businessman who suggested creating an endowment for business plan competitions and entrepreneurship as a way to continually fund such activities. Smith said that this was the role of civil society and reducing dependence on government. Van Milligan added that if a community has an endowment then they have something of their own.

Prine suggested putting the toolbox on a DVD, perhaps spending $30,000 on the toolbox and $10,000 on getting the DVD promoted and spread. Roberts suggested using the web because then things could be updated as needed. Smith added that there was a need to talk to people in order to turn data and information into knowledge.

Danowsky said that it would be useful to pause and look at what was needed once the affiliates got past the deadline date and to see what the Academy evaluations suggest. If the CVC waited until the next year then there could be $80,000 to allocate and perhaps something bigger could be done. Erb said that the legislature's allocation would be settled by summer and that what the CVC would decide to do would depend on what the legislature does.

Van Milligan asked what the CVC could do to make it possible for community foundations to fund entrepreneurship initiatives because the foundations were limited by IRS regulations about what funds can be used for and eligibility of recipients. There are difficulties in granting funds to entities that are not 501c3 nonprofits. Edelman said that the CVC is a Regents center and thus the CVC was piggybacked on the University's classification. Van Milligan said that she was seeing some of the grant making initiatives focusing on football uniforms and defibrillators and not focused on broader based economic development. Edelman said that this issue should be handled by determining countywide needs and priorities and if board don't focus on what their needs assessments say, then they may open themselves to criticism. Smith added that part of the issue is to get people to understand the difference between philanthropy and charity.

Erb's observations suggested that there were three entities (charities, quality of life, and economic development) taking the lead in organizing the counties for the gambling funds. Edelman suggested there may be some merit to focus on the linkages between the themes of entrepreneurship and philanthropy. Maureen added that a balanced approach seemed to be useful in counties they had worked in. Raber commented that you can see the tangible effects of earlier entrepreneurship in the donations and buildings made to the community. Maureen said that buildings are named for early and current entrepreneurs. Edelman said that the dual relationship between entrepreneurship and philanthropy may be the CVC's niche. Peterson added that this would be a unique niche because no one else was doing it.

The final issue on the agenda was portability of endowment funds as a potential issue for affiliates. The CVC had been a supporter of portability in the Endow Iowa Administrative Rules Hearings, but there were varying definitions and ways of doing portability. Erb said that the various agreements between qualified foundations and affiliates may not be using the same language for the portability provisions. Erb added that the CVC Board had likely assumed that the portability provisions would be the same and apply to all funds deposited from a community affiliate, but in some agreements the non state incented funds can't be taken out unless the group was forming their own qualified foundation. Erb wanted the Board to understand that there may not be universal portability as had been originally defined, understood, or assumed.

Danowsky said that IDED did not enter into the language of the agreements because that is between the affiliate and the qualified foundation. Silva added that the CVC was not responsible for the agreements. Van Milligan said that a foundation had to be independent and autonomous in order to become qualified but that there were intricate legal issues on the contracts and agreements. She added that the agreements with the Dubuque Foundation say that the funds are permanent except those related to public incentives.

Erb said that he brought this issue to the Board's attention because the portability that is there for the state programs may not be there for other fund accounts from community affiliates and some affiliates may become dissatisfied when they learn that portability may not be as had been assumed. Erb suggested that the buyer beware. Edelman added that the CVC wouldn't want to be promoting something that would lead to dissent in unintended ways. Erb said that his primary concern was that someone with the CVC making general comments on the portability issue that weren't correct. Silva said that this was a matter of due diligence and that those making the agreements had to do their homework. Burke suggested that there be an emphasis that the agreements were not identical and that they needed to be reviewed carefully and that there was no general template. Edelman added CVC has always suggested that an affiliate have a local attorney review the affiliation agreements before they are signed. Erb thought that attorneys that may not work in this topical area might not always know what to look at in the agreements.

Raber asked how it would work if another group wanted to affiliate with the affiliate. Van Milligan said that another group couldn't affiliate with the affiliate itself and that the other group would have to make an agreement with the parent qualified community foundation. Edelman said that perhaps the portability issue could be a table topic at tomorrow's philanthropy academy. Smith added that would make the portability issue one topic among many. Danowsky said that how this was handled would be important because many counties were already affiliated and it would raise negative issues that were already decided. Van Milligan added that a community foundation can't have that sort of portability and that it was a legal issue. Danowsky added that it would raise suspicion about the Iowa Council of Foundations. Edelman said that there was no real need to bring up the issue unless asked by a member of the audience. Erb said that overall, only the HF2302 and Endow Iowa grants were the only funds that were fully portable and that other funds were probably not portable.

The meeting was adjourned at 11:55 A.M.