Entrepreneurial Spirit by Initiative Foundation

FALL 2021

ECONOMY

Countdown to Careers— Career exploration programs showcase close-to-home opportunities. Pg. 8

COMMUNITY

Reinvent & Renew— Community, equity at the heart of Federal Reserve partnership. Pg. 12

GENEROSITY

Giving With a Kick— Couple who helped zoo purchase zebra starts fund to benefit community. Pg. 24

ENTREPRENEURIAL SPIRIT Lending program helps growing companies expand, exceed goals and create jobs. Pg. 16

GROWING COMPANIES ENHANCING COMMUNITIES Granite Partners is a private investment and holding company founded in 2002 in St. Cloud, Minnesota, with a mission to grow companies and create value for all stakeholders. As trusted partners, innovative leaders, and responsible stewards, we view all decisions through a 100-year sustainability lens, and we aspire to world-class wellbeing for all people in and around the Granite community.

Granite.com

Initiative Foundation FALL 2021

Contents FEATURES

DEPARTMENTS

Entrepreneurial Spirit

Lending program helps growing companies expand, exceed goals and create jobs.

Help Wanted: Child Care Providers

The Foundation at 35

The Need for Speed

Economy:

Countdown to Careers

Career exploration initiatives help high school students learn about close-to-home opportunities.

Helping to change the economic and charitable landscape of Central Minnesota since 1986.

Rural areas badly need broadband. So how can they get it?

Regional Highlights

Get the latest highlights from the 14-county area.

Area colleges offer low-cost, no-cost accelerated early childhood certificates.

Initiatives:

Community:

Reinvent & Renew

Initiative Foundation, regional partners explore strategies to grow the region’s economy with better support for historically underserved entrepreneurs.

Generosity:

Giving With a Kick

Couple who helped zoo purchase zebra starts fund to benefit community.

Home made:

GroShed

Emily-based company provides standalone thermal sheds that grow year-round vegetables.

Where’s IQ?

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Dear Friends, On a single day in early October, my work meetings included discussions of rural Minnesota food deserts, substance abuse, unemployment among formerly incarcerated individuals and the state of rural journalism, among other heavy topics. Would you be surprised if I told you it was one of the most uplifting days I’ve had this year? At Saint John’s University in Collegeville on Oct. 5, the Initiative Foundation and three of its sister foundations from around the state selected the 2022-23 cohort of Initiator Fellows—a diverse group of eight talented individuals who are using the power of business to take on a range of challenges. One by one, these leaders made their pitches. They didn’t stop at identifying problems to be lamented. They offered visions of a better future, and concrete plans to get there. From my conversations with others in the room, I learned I wasn’t the only one who walked out the door with an extra spring in my step. I left with a sense of gratitude in knowing these and other leaders are hard at work to improve the lives of Greater Minnesotans, and that our Initiators Fellowship will put some extra wind at their backs. Look for their stories in the spring 2022 edition of IQ Magazine. In the meantime, the pages of this edition feature plenty to be thankful for, too, including a cover story about business financing partners who are creating prosperity and Central Minnesota job opportunities that exceed expectations; an inside look at an innovative effort to address work force and child care issues; an uplifting story involving a local family’s generosity and a zebra named Lucy; and much more. Enjoy the magazine!

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Matt Varilek, PRESIDENT

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VOLUME 34, FALL 2021

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Visit greaterminnesota.net/fellows/2022-2023-fellows to learn more about the Fellows and their social enterprise ventures.

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Initiatives

WADENA TODD

CROW WING

MORRISON

MILLE LACS

PINE

BENTON STEARNS

SHERBURNE

ISANTI

CHISAGO

Regional Investment Highlights

CASS

KANABEC

WRIGHT

WESTERN MORRISON COUNTY | Health, Horticulture and Happy Times for Kiddos Children at In-Harmony Child Care in Pierz got their hands dirty this summer while learning about gardening, harvesting and healthy eating. Supported by a Minnesota Department of Education grant distributed by the Initiative Foundation, the children had supplies to plant, grow and harvest vegetables. Staff also led children through yoga exercises, all with a goal of providing wellness opportunities to children affected by pandemic-related interruptions.

TODD COUNTY | Help Wanted: Uncovering Hidden Talent The workforce shortage is expected to last at least a decade. To fill job openings, Long Prairie’s Community Growth Fund hosted a webinar on creating felon-friendly workplaces. The effort was supported through a Department of Corrections partnership and a grant from the Initiative Foundation. Staff from CareerForce, Rural Minnesota Concentrated Employment Program and Twin Cities Rise, Inc., served as presenters. The event has spurred interest in future sessions on tapping other under-utilized workers to meet the needs of employers. MORRISON: Children grew vegetables in an on-site garden at In-Harmony Child Care in Pierz.

NORTHERN

WADENA COUNTY | Grant Keeps Grocery, Thrift Store Doors Swinging in Verndale When the freezers go out at the only grocery store in town, quick action is needed. Supported by an Initiative Foundation grant, partially funded by the Minnesota Council on Foundations and its Disaster Relief Fund, Grocery & Treasures, Too in Verndale was able to fix its freezers so residents could continue to shop locally. The combined grocery and thrift store is operated by the Wadena County Developmental Achievement Center, which employs those with developmental disabilities.

CASS COUNTY | Year-Round Outdoor Learning Abounds in Pillager Pillager students can step out of the classroom and into the woods, thanks to grant support from the Pillager Education Foundation, an Initiative Foundation Partner Fund. The grant helped the school better utilize 40 acres and includes a trail loop and canoe launch; cleared areas for wildlife observation; and the purchase of cross-country skis, snowshoes, drones, camera equipment and spotting scopes. The improvements enhance outdoor learning opportunities for the forest, science and digital arts programs.

CROW WING COUNTY | WonderTrek Children’s Museum Hits the Road Staff from WonderTrek, an emerging children’s museum serving Wadena, Cass, Crow Wing, Morrison and Todd counties, spent spring and summer hosting more than 100 hands-on educational events, from painting classes to fort design and outdoor survival. The Initiative Foundation joined Sourcewell and other local funders to support early planning for the museum. Visit wondertrekmuseum.org to see future events.

MILLE LACS COUNTY | Health System Distributes COVID-19 Safety Kits When COVID-19 vaccines became available, Mille Lacs Health System patients were snapping up appointments as quickly as they opened. The health system used the opportunity to promote continued best practices by distributing COVID-19 safety kits. The kits, supported by an Initiative Foundation grant, included a box of masks, educational materials and a mask hanger for home or the car. Kits also were donated to local food shelves.

6 Initiative Foundation ifound.org

“ Higher Works Collaborative is proud to be in partnership with the Initiative Foundation. Together we will continue to be a resource to all who aspire to fix a need in the community.” – Buddy King

Higher Works Collaborative chief operating officer, Enterprise Academy partner

SOUTHERN BENTON COUNTY | Savvy Teens Equipped for Bright Business Futures More than a dozen St. Cloud-area high schoolers gathered in June to learn finance and business skills at the first Savvy Teens Seminar, supported by St. Cloud’s American Association of University Women and an Initiative Foundation grant. Participants heard from accomplished local women on financial management, goal-setting, career assessment and more, all with a goal of introducing young women to career options and the tools to be successful.

SHERBURNE COUNTY | Compliance on the Menu for St. Cloud Restaurants To help Somali-owned restaurants meet Minnesota food-safety requirements and have a Certified Food Protection Manager on duty, staff with the Initiative Foundation’s Enterprise Academy during the past year hosted two St. Cloud trainings. As a result, 27 restaurant workers passed the exam, resulting in more than 20 restaurants complying with the requirement.

STEARNS COUNTY | Robotics Program Makes Pandemic Pivot, Drives Forward Robots could help solve Central Minnesota’s workforce shortage, but not in the way you might think. The students behind the robots are the answer. Supported by an Initiative Foundation grant, the Central Minnesota VEX Robotics program was able to continue teaching students science, technology, engineering and math concepts throughout the pandemic. Organizers used the grant to create a virtual competition platform and secure donor support for future expansion.

BENTON: St. Cloud-area young women attended the Savvy Teens Seminar in June.

WRIGHT COUNTY | Training Series Meets Need for Child Care Providers Fifty-six child care providers received CPR and first-aid training with support from Wright County Economic Development Partnership and a Minnesota Department of Education grant distributed by the Initiative Foundation. In a recent survey, Wright County child care providers cited a lack of in-person training as a barrier to completing licensing requirements. Sessions will continue with the goal of training 100 providers by December 2021.

EASTERN

CHISAGO COUNTY | Rise Helps Break Down Employment Barriers For those experiencing homelessness, a recent release from incarceration or mental and physical disabilities, entering the workforce takes a few extra steps. Rise, Inc., provides solutions to challenges for anyone with barriers to employment. Visit rise.org to learn how this Initiative Foundation- and Partner Fund-supported organization unlocks potential and opens doors to success for people with disabilities and other challenges.

ISANTI COUNTY | Schlagel Endowment Boosts Local Nonprofits The John & Bonnie Schlagel Endowment, a Partner Fund of the Initiative Foundation, recently provided a $35,000 boost to 14 nonprofits. Local students will have a jump start with college financing thanks to donations to the Pine Technical & Community College Foundation and the Cambridge-Isanti Dollars for Scholars. A Place For You and New Pathways, serving those experiencing homelessness in Pine City and Cambridge, also received grants. Thanks to the Schlagels for their big support of those in need!

KANABEC COUNTY | Counties, Tribal Nation Pave Way on Broadband For nearly 20 years, the Blandin Foundation has been committed to helping rural communities connect to broadband resources. Because many East Central Minnesota households do not have access to broadband internet, a group from Kanabec and Pine counties and the Mille Lacs Tribal Economy worked with the Blandin Foundation’s Community Broadband Resources Program to learn how to acquire and deploy federal and state broadband funds. Several Initiative Foundation-funded broadband feasibility studies are in process.

ISANTI: The Pine Technical & Community College Foundation received a John & Bonnie Schlagel Endowment grant.

PINE COUNTY | East Central Minnesota Industrial Sites on Display Site selectors and business owners got a birds-eye view of East Central Minnesota during a spring virtual familiarization tour, backed by an Initiative Foundation grant. The tour displayed business parks and industrial sites in the GPS 45:93 region of Pine, Kanabec, Chisago and Isanti counties and the sovereign territory of the Mille Lacs Band of Ojibwe. Attendees agree the proximity to the Twin Cities and the transportation and real estate opportunities at seven shovel-ready sites make the region wellpositioned for growth. FALL 2021

economy

ON TRACK: Brandon Kempenich’s internship with DeZURIK has him on track to reach his goal of becoming a mechanical engineer.

Countdown to Careers Career exploration initiatives help high school students land internships, apprenticeships and learn about close-to-home opportunities By Bob McClintick

As a boy, Brandon Kempenich had an insatiable appetite for all things mechanical. He didn’t just squeeze the trigger on his remote-controlled car to watch it zoom and veer and careen. He tore the car down. Ripped the engine out. Changed the gearing. He tinkered to learn, understand and enhance its performance. And his NERF blasters, well, the off-the-shelf product just wouldn’t do. Kempenich would disassemble his toy guns, harvest the springs and stack them into a single blaster to make it shoot softtipped darts harder, farther. Kempenich channeled his engineering enthusiasm into junior high and high school robotics, where he explored computer-aided design, 3-D printing and learned about plasma cutting and laser engraving. Today, the 2021 Sartell High School graduate is enrolled in a two-year program with the Center for Manufacturing and Applied Engineering at St. Cloud Technical and Community College. His goal is to become a mechanical engineer, and his current educational pathway, coupled with an internship at DeZURIK, an Initiative Foundation Community Builders Circle member, has him well on his way.

“I applied for the DeZURIK internship because I knew I was staying close to home for my schooling,” said Kempenich, who learned about the Sartell company’s global industrial valve manufacturing during a school tour. His high school industrial arts instructor, Joe Schulte, helped make the DeZURIK internship connection. “I thought, ‘Hey, if I had an internship possibility here and the schooling I want, I really don’t need to go anywhere.’” Kempenich is just one of many young people across Central Minnesota who local businesspeople and educators hope will soon be moving from high schools to regional workplaces. As parents, educators and workforce experts rethink the current trend of pointing high school graduates to university educations, local companies and nonprofits are creating innovative programs to showcase careers that don’t require such a steep commitment of time and financial resources. Through career exploration programs like St. Cloud’s EPIC— Exploring Potential Interests and Careers—and Bridges Career Academies and Workplace Connection in Brainerd, both of which are supported by Initiative Foundation grants, high school students are learning about close-to-home opportunities, many of which do CONTINUED ON PAGE 10

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economy, continued from page 8 not require a four-year post-secondary education. In fact, workforce experts frequently cite a basic formula—7-2-1— to illustrate the statewide demand for workers. Simply put, for every 10 jobs advertised, businesses on average need seven people with a high school diploma, technical college certificate or a two-year associate’s degree; two people with a four-year bachelor’s degree; and one person with a master’s level education. “The numbers tell us that the majority of jobs in Central Minnesota don’t require a lengthy post-secondary education,” said Don Hickman, vice president for community and workforce development at the Initiative Foundation. “If we can expose young adults to the opportunities to find fulfilling work, minimize student debt, and stay within the region, it will have a significant impact on the shortage of skilled workforce we’re currently experiencing—and can expect to experience for more than a decade.” Careers in health care lead the way, accounting for nearly 50,000 Central Minnesota jobs with average annual wages of $42,500, according to the Minnesota Department of Employment and Economic Development (DEED). Della Ludwig, Central Minnesota workforce strategy consultant for DEED, said manufacturing follows as the region’s second largest employing industry, providing nearly 40,000 jobs with an average annual wage of more than $57,500, well above the region’s overall average of $48,500. Combined, health care and manufacturing account for nearly one-third of the region’s 283,000-plus jobs. At the Initiative Foundation, supporting high school career exploration and skills development is an organizational priority. In the last decade, the Initiative Foundation and its Partner Funds have awarded numerous grants to support regional career exploration initiatives—from a renewable energy careers program in the Wadena school district to an automotive careers project in the Swanville school district. The grants have helped to elevate awareness, create connections and open up close-to-home career avenues for high schoolers. The demand for skilled workers is real and ongoing, driven by myriad changes: a shortage of quality, affordable child care for

Central Minnesota Share of Jobs by Educational Requirements, 2020

No Formal Educational Requirement

186,670

High School

67.0% 5.6% 5.1% 2.0%

17.5% 2.9%

5,570 8,040

10 Initiative Foundation ifound.org

15,510 14,290

Vocational Training Associate's Degree Bachelor's Degree

48,650

Graduate or Professional Degree Source: DEED Occupational Employment Statistics (OES)

RESOURCES Introducing young people to career opportunities can be just a click away. Visit the following websites for more career exploration information: • Exploring Potential Interests and Careers (EPIC): epic-mn.com • Bridges Career Academies & Workplace Connection: bridgesconnection.org • Innovative Approaches to Career Readiness: gps4593.com/labor-market/workforce-data/ There are a variety of free online tools available that can help with career assessment, including: • CareerOneStop: careeronestop.org • O*NET: onetonline.org • DEED: mn.gov/deed/job-seekers/job-guide

working families; a continued decline in rural populations with increasingly diverse communities that demand employer adaptation; and an aging workforce. In fact, through 2030, when at least one of five residents in every Minnesota county will be older than 65, the working population in Central Minnesota is forecasted to shrink by 3 percent. The seven-county Twin Cities metropolitan area is the only region in Minnesota that is expected to expand its working-age population over the next decade. The combination creates a true supply-and-demand challenge: The state demographer has forecasted there will be 3.1 million jobs available in Minnesota by 2024. Unfortunately, even if employment rates are maintained at historic levels of 78 percent of adults working, just 2.7 million workers will be available/able to work in 2024. That leaves the state with 400,000 jobs to fill—and that figure may be even more lopsided as a result of the pandemic, higher quit rates among workers and the ongoing retirement of baby boomers, the largest population of workers in U.S. history. Local workforce experts say retaining students and making workplaces more open, welcoming and accessible is a crucial step in shoring up the shortfall. Gail Cruikshank, talent director at the Greater St. Cloud Development Corporation and event facilitator for EPIC, said the St. Cloud-area career exploration program is aligned to workforce niches and provides students with a strong sense of what is possible in a particular career or field. “Our goal is that when they go back to school, they are debriefing with somebody and asking key questions,” Cruikshank said. “‘Are my classes aligned? Can I start taking some post-secondary courses now? Is there some kind of experiential internship or job shadowing that I can do now, while I’m still in high school, that will help me advance in this field?’” It’s a path that Kempenich followed, and it’s paying dividends. He’s been invited to stay on with DeZURIK for the duration of his technical college education. “It’s a great opportunity for me,” he said. “They take care of their employees. Even as an intern, I still get invited to the picnics, the company get-togethers and all that. And I get to do it in a professional environment and advance my skills and abilities.”

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MAIN STREET LONG PRAIRIE: Providing pathways for entrepreneurs and knocking down barriers is crucial to supporting the local economy.

Reinvent & Renew Central Minnesota team partners with Federal Reserve to explore strategies to expand support, services for historically underserved entrepreneurs By Andy Steiner | Photography by John Linn and Paul Middlestaedt

When COVID-19 hit Central Minnesota, it shook everyone in the region and exposed some raw truths: Low-income people and communities of color were particularly vulnerable, experiencing higher rates of infection and death, children who struggled to thrive in online school, significant job loss and small business setbacks and closures. With a focus on shoring up and supporting community members—during these unprecedented times and beyond—staff at the St. Cloud-based nonprofit Central Minnesota Community Empowerment Organization (CMCEO) shifted into high gear, developing programs to support immigrants and refugees in a range of areas: applying for rental assistance, running summer programs to help children catch up on schoolwork, and showing local business owners how to apply for COVID-19 grant and loan programs. “We have become a full-fledged resource for the community,” said Shirwa Adan, executive director for CMCEO, “so when COVID hit, we knew we had to be involved because we didn’t want to lose all the progress we’d made.”

CMCEO is a founding partner in the Initiative Foundation’s Enterprise Academy, an entrepreneurial bridge-building program that provides 12 weeks of small business training, technical assistance and potential access to financing for underserved entrepreneurs, including people of color and lower-income individuals. This summer, Adan was excited to learn of ways his organization could build even more community bridges. Along with representatives from a range of local nonprofits, higher education, businesses and economic development experts, Adan was invited by the Initiative Foundation to participate in Reinventing Our Communities, a 10-month program created and administered by the Federal Reserve Bank of Philadelphia. The Central Minnesota cohort, in partnership with the Federal Reserve Bank of Minneapolis, is exploring strategies to sustain and grow the Enterprise Academy and the businesses it serves. “The Initiative Foundation was really excited by this partnership, so we were, too,” Adan said. “We knew we wanted to be involved in this effort to explore how we can reinvent our communities in a culturally sensitive and equitable way.” CONTINUED ON PAGE 14

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GLOBAL COMMUNITY: Shirwa Adan (right) answers questions from McKnight Foundation President Tonya Allen (center) during a tour of the Global Center cultural mall in St. Cloud.

A NEW PARTNERSHIP

Initiative Foundation President Matt Varilek said alignment with the Reinventing Our Communities program was evident based on the Foundation’s history of programs that work to expand opportunity. “We saw immediate parallels between the ambitions of our programs and the purpose of the Reinventing Our Communities initiative,” Varilek said. “We’re excited about the opportunity to connect our Central Minnesota economic development work with other communities across the country that are participating in this unique initiative led by the Federal Reserve. We’re also eager to partner locally with the talented people right down the road at the Minneapolis Fed.” Reinventing Our Communities is focused on supporting and expanding the key pillars of successful entrepreneurship—training, technical assistance and lending—and examining the deeper barriers underserved communities face in accessing critical support systems. The end goal is to address gaps in the network of services available to aspiring small business owners and to build a stronger economy for all Central Minnesotans. Michou Kokodoko, project director in the Federal Reserve Bank of Minneapolis’ Community Development and Engagement Department, said the strong connections and trust the Initiative Foundation has built across the region make it a great fit for this program. “We felt that through programs like the Enterprise Academy, the Initiative Foundation and the partners they have been training have built strong connections with entrepreneurs of color,” Kokodoko said. “They are reaching out to these communities already” and making a difference.

CHANGE-MAKERS

Lifting up businesses and knocking down barriers is crucial to supporting the local economy, said Luan Thomas-Brunkhorst, director of the Long Prairie Chamber of Commerce and an Initiative Foundation partner in the Reinventing Our Communities cohort. In Long Prairie, and in many other small Central Minnesota towns, the immigrant population has become a hub of business activity. Thomas-Brunkhorst said two long-vacant downtown buildings recently were purchased by Latino business owners, bringing growth and new economic activity to Central Avenue, where 10 main street businesses are owned by Latino residents. 14 Initiative Foundation ifound.org

“Entrepreneurs with gumption and who are willing take a chance and start a business in Long Prairie are necessary for our local economy and the revitalization of Central Avenue,” ThomasBrunkhorst said. “We want to make everyone who comes to Long Prairie feel welcome. We want people to stay and to feel connected.” One way Long Prairie leaders are solidifying that connection is through the establishment of Welcoming Advocates, Valuing Everyone (WAVE). Supported by grants from the Initiative Foundation and University of Minnesota Extension, WAVE is a one-stop center using space at the public library where community residents can glean multi-lingual information about job opportunities, housing, child care and more. The Latino Economic Development Center (LEDC) will also have a presence to support new business owners. “We’re making progress,” she said. “It’s going to take years, of course, but we see this as a way to hopefully build new relationships and create more unity in our community.” Both Thomas-Brunkhorst and Adan say their participation in Reinventing Our Communities has been an enriching experience. They’re expanding their networks and gaining new connections. They’re hearing from community members and entrepreneurs about their goals and challenges, and they’re gathering perspectives from national experts. Adan believes members of the Central Minnesota cohort are prepared to pour their energy into the Reinventing Our Communities initiative and match the effort put forth by the entrepreneurs they serve. “We are focused on building better communities that reflect all the faces of America,” he said, “and that’s a big job.” Additional reporting provided by Bob McClintick, Initiative Foundation marketing and communications director.

Cohort partners represent the following Central Minnesota organizations and institutions: • Central Minnesota Community Empowerment Organization • Greater St. Cloud Development Corporation • Higher Works Collaborative

• Latino Economic Development Center • Long Prairie Chamber of Commerce • Mille Lacs Corporate Ventures • St. Cloud State University • U.S. Bank

A FOCUS ON THREE COMMUNITIES The Initiative Foundation and its Reinventing Our Communities partners are focused on unique challenges for small businesses in three communities: the St. Cloud metropolitan statistical area, the Mille Lacs Tribal Economy, and Latino populations in Todd and Stearns counties. PROJECT GOALS • Support and access: Build the capacity of organizations to support and accelerate the success of underserved entrepreneurs in their respective communities. • Build relationships: Enhance learning and strengthen collaboration across the three communities served. • Systems change: Expand partnerships to focus on unique opportunities and on-the-ground resources that help address each community’s distinct challenges.

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FALL 2021

Entrepreneurial spirit Lending program helps growing companies expand, exceed goals and create jobs. By Lisa Meyers McClintick | Photography by John Linn

As restaurants shut down, offices went silent and highways emptied during 2020’s stay-at-home quarantine, people embraced simpler joys such as the jingle of a collar and the excited dance of a pet just before kibble clatters into a food bowl. The American Pet Products Association estimated 11.38 million households welcomed new dogs, cats, and other critters during the first year of the pandemic, fueling a record-breaking $103 billion in pet industry sales. “People love their pets,” said Greg Zylka, mayor of Little Falls, a community that benefited from the sales surge since Barrett Petfood Innovations opened its new 165,000-square-foot plant in June 2020. Supported by a lending package that involved the Initiative Foundation and other local organizations, the company estimated at the time that it could create 60 to 100 new jobs. In less than 18 months, up to 100 employees were busy at Barrett Petfood Innovations’ Little Falls location, and another 50 were added to its Brainerd location to support the production of 450 premium pet food products. “We definitely did not expect to have this many employees today when we started in Little Falls,” said Tom Barrett, owner and co-managing director with his sister, Sarah Barrett. “The pandemic did create an additional demand that we didn’t forecast.” Financially supporting rising manufacturers such as Barrett 16 Initiative Foundation ifound.org

Petfood Innovations helps stabilize and strengthen the regional economy, especially when markets shift, technology changes or other economic forces hit employers. By the end of 2021, two local companies were expected to close: IWCO Direct, a Little Falls direct mail company with 300 employees, and Coleman life-jacket plant in Sauk Rapids, with 175 employees. Across the region, the Initiative Foundation has helped to fill the gap for new and expanding businesses when traditional lending reaches its limits. Ideally, new or expanding companies show an entrepreneurial spirit that elevates their business above and beyond their initial expectations. In this edition of IQ Magazine, we look at three such businesses—from large to small: Barrett Petfood Innovations, Plug Technologies in Hanover and startup business Advanced Interconnect Technologies of St. Cloud. “These three projects showcase how our programs can be supportive of business growth and expansion,” said Dan Bullert, Initiative Foundation senior business finance manager. “It’s important for us to support small and large projects. We want to

help younger companies to get established, too, and continue to grow in the future and to add employees.”

Barrett Petfood Innovations

Before Barrett Petfood Innovations could begin construction on its production plant in Little Falls’ Chief Hole in the Day Industrial Park in 2019, it needed a $23 million financing package. The Initiative Foundation joined with other lenders and provided its maximum loan of $500,000 to help the project move forward. The operation ramped up quickly, and today the company is looking to add a production line at Little Falls in late 2022 or 2023, doubling its output. It’s also investing about $40 million in an 80,000-square-foot freeze-dry facility that’s under construction across the road from its Little Falls plant. The freeze-dry facility, called North Freeze Dry, may open by next June and will be a partnership with Anchor Ingredients of Fargo. Instead of dealing with delays of up to four months to get its much-needed pet food ingredients, North Freeze Dry will support Barrett Petfood Innovations by using five freeze dryers to process three to five million pounds of meat per year. The freeze-dry facility requires an even bigger investment due to the heavy refrigeration required for chicken, turkey and pork from Central Minnesota and the Midwest, along with imported whitefish and salmon from northern coastal states, duck, lamb, and kangaroo from Australia and New Zealand. Freeze-dried meats can be packaged separately or blended with kibble made at the main Little Falls plant. North Freeze Dry is expected to employ about 60 people with two shifts, but like the first Little Falls plant, demand could require an expansion soon after opening. In addition to the manufacturing jobs, the company has bolstered the area economy through construction of its facilities and by supporting area growers with locally sourced ingredients such as Smude’s sunflower seed oil, chicken and poultry, and crops such as millet, sorghum and peas. “We’re a very global business,” Barrett said, “but we also try to do anything we can do locally.” Barrett wants to become for the pet food industry what Larson Boats, a former and longtime Little Falls company, was for the boating industry, said Mayor Zylka. “They want to be that staple in our community that people can rely on for employment.”

Plug technologies

A PET PRODUCTION: Siblings Sarah and Tom Barrett are seeing a growth in sales—and jobs—since Barrett Petfood Innovations added a165,000-square-foot production plant in Little Falls in June 2020.

When excavators carve into the ground to build homes, businesses or to replace aging water lines, chances are high the crews will need a pneumatic pipe plug to cap off water and stormwater lines so the work can be done. Plug Technologies has worked to make that process easier— and safer—since owners Karl Trott, Marc Bevacco and Glen Meyer teamed up in 2013 to create the company in Hanover on the southern edge of Wright County. It was the first pneumatic pipe plug company to start in more than 30 years, and they built it from the ground up with a 13,000-square-foot building plus manufacturing equipment they designed and installed over 14 months. They had to create and test their product until it was superior enough to carve out a competitive spot in the 60-year-old industry.

FALL 2021

MARKET FORCES: Karl Trott (left) and his partners are filling a void in the pneumatic pipe plug industry with their startup business in Hanover, located in southern Wright County.

Besides always having an easy ordering process and the ability to reach one of their staff, Plug Technologies had stood out with components such as U.S.-made couplers, liquid-filled gauges, and protectors around the gauges. “It’s a lot of the small stuff that resonates with the customers,” said Trott. “The small stuff are the things that cause [customers] trouble.” Startups such as Plug Technologies often don’t have the capital or experience that conventional lenders may require. “We provided a $235,000 working capital and inventory loan on a 10-year repayment plan, but they paid us off two years early,” Bullert said. Plug Technologies also paid off a second loan of $192,000 that helped finance equipment. Once new companies gain momentum, they can secure future financing more easily. Plug Technologies has grown during building booms and found a solid market with rental companies. Renting the plugs makes more sense than contractors buying plugs, putting them in a truck with extreme temperature swings and risking degrading the rubber. If a compromised plug loses its seal in areas with a high water table, a flooded job site could prove costly by pushing back construction progress, Trott explained. The company doesn’t share sales figures, but “from 2015 to 2019, we’ve averaged 60 percent annual growth,” he said. The pandemic slowed the company’s growth in 2020. “This year, we’re back up over 60 percent growth.” The company started with fewer than 10 employees, but they’re now up to 28 and hoping to break ground on a 6,000-square-foot addition before the end of the year. “We could add another half a dozen [employees],” Trott said. “We literally can’t keep up. The more people we can get, the more plugs we can make and sell.”

Advanced Interconnect Technologies

A 26,000-pound robotic machine at Advanced Interconnect Technologies in St. Cloud is a wonder to behold: In just over 16 hours, it produces a precise component for an Abrams armored

PRECISION PARTS: Jason Smith, owner of Advanced Interconnect Technologies, brings more than two decades of experience in mechanical engineering, tooling and precision manufacturing to create essential components for the defense industry.

tank. Parts such as heat sinks (an aluminum chassis) for circuit boards used on fighter jets can be made faster. Across the shop floor, another machine can produce 4,000 parts per hour—each only a few millimeters in size—that are destined to be used as military-grade connectors and circuitry. No matter the size or production time, final products at this 2020 startup company need thorough testing to show they are durable enough for extreme aerospace and defense industry conditions and are dependable enough for vital satellite communications. “Satellites help provide key information to make sure soldiers get home safely,” said company owner Jason Smith. “[These components] are truly making an impact on people’s safety. There’s CONTINUED ON PAGE 20

18 Initiative Foundation ifound.org

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Historic 35-year

business finance figures

1,142

NUMBER OF LOANS

ACCURATE & AGILE: Advanced Interconnect Technologies has several stations for manufacturing, including an open-sided manufacturing station that can create circuitry components as small as a grain of rice.

a lot of meaning in that.” Smith leverages 24 years of industry experience, starting with precision manufacturing, tooling, and automation for Little Fallsbased Central Minnesota Tool. When Texas-based AirBorn bought the company in 2007, Smith transitioned into developing new products and the manufacturing technology to produce it. That led him to develop space-rated optical cable that could withstand radiation, vibration and other extremes. Smith started Advanced Interconnect Technologies in March 2020 as an agile, flexible shop that could quickly fill small and short-run orders. The business started in a leased 1,650-squarefoot building in Sauk Rapids, but between running out of space and someone else buying the building, he needed to move. Finding larger, appropriately zoned leased space wasn’t working. “There weren’t many options other than to buy,” he said. The Initiative Foundation partnered with lead lender Stearns Bank and provided a $23,750 loan that helped Smith buy the former American Standard plumbing building along Highway 10 in St. Cloud. The move enabled the company to triple its space with 5,335 square feet and a nearby lot for future expansion. The company also has grown to five full-time employees— including two machinists/CNC programmers, an electrical engineer and inspector—and a few part-timers. They have a handful of machining areas with space for up to 14, including the more flexible, open-sided workstations. “Our goal is to outgrow this [building] in three years,” he said, “and the land in five years.” CONTINUED ON PAGE 22

20 Initiative Foundation ifound.org

$60M+ VALUE OF LOANS

$424M

LEVERAGE AMOUNT*

8,760

JOBS RETAINED

5,545

JOBS CREATED

* As a gap lender, the Initiative Foundation partners with local banks and credit unions who serve in the lead lender role. The amount leveraged represents the amount of money our lead-lender banks and institutions have provided to finance business startups and expansions throughout the region.

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FALL 2021

ENTREPRENEURIAL SPIRIT CONTINUED FROM PAGE 20

Meet the Foundation’s

business finance team :: Dan Bullert dbullert@ifound.org

:: Doug Adams dadams@ifound.org

“ It’s important for us to support small and large projects. We want to help younger companies to get established, too, and continue to grow in the future and to add employees.”

22 Initiative Foundation ifound.org

The Initiative Foundation’s business finance team is growing with the addition of Doug Adams, who joins Senior Business Finance Manager Dan Bullert. Working together, Dan and Doug support rural small businesses by providing gap loans of up to $500,000 to supplement the capital available from partner banks and credit unions. Partnerships with lead lenders make possible business expansions and other deals that might not otherwise occur. The Foundation also originates direct loans, including microloans of up to $50,000 to qualified borrowers not yet able to access commercial finance, and is a resource for the technical assistance businesses may need to get their project done. To learn more about the Initiative Foundation’s business financing program, or to see if your project is a fit, visit ifound.org/ economy/business-financing. Dan and Doug stand ready to continue the Initiative Foundation’s 35-year history of lending and technical assistance to regional small businesses. Contact them today to explore lending opportunities that can help develop businesses and make a difference in Central Minnesota.

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FALL 2021

generosity

A ZEBRA NAMED LUCY: Longtime Pine Grove Zoo supporters Colette and Paul Cameron helped with the acquisition of a zebra. And now, with their Initiative Foundation donor-advised fund, they intend to do even more in the Little Falls area.

A Smart, Simple Way to Give Back Donor-advised funds offer generous people flexibility and tax advantages. And the Initiative Foundation makes them easy to manage. By Gene Rebeck | Photography by John Linn

One day a few years back, Little Falls resident Paul Cameron asked his wife, Colette, whether she’d bought him anything for their anniversary. “I said no,” Colette recalled. “So he said, ‘How about we buy a zebra?’” He meant helping the Pine Grove Zoo in Little Falls to acquire a zebra. “That took me aback,” Colette Cameron said. “But then I thought, that would be awesome.” As part of their donation two years ago, the Camerons were able to name the zebra Lucy after Colette’s mother and one of their granddaughters. It’s just one example of how the Camerons, who’ve resided in Little Falls for four decades, have supported the community they love. They decided to do even more in 2020 by establishing the Colette and Paul Cameron Donor Advised Fund. This year, the fund made its first grant, helping the zoo acquire two capuchin monkeys. In addition 24 Initiative Foundation ifound.org

to Pine Grove Zoo, the Camerons intend to make future grants to organizations they have long supported and served, including the Little Falls Golf Course and Little Falls-based Great River Arts. “Little Falls has been good to us,” Paul Cameron said. “Because we’ve been fortunate in life, we decided it would be a great idea to share back with the organizations we have close affiliation with some of the success that we’ve enjoyed.”

COMMUNITY ADVANTAGES

Donor-advised funds are the fastest-growing form of philanthropy today. In 2019, grantmaking nationwide from donor-advised funds totaled more than $25 billion, a 93 percent increase since 2015. That popularity extends to Central Minnesota. The Camerons’ fund is one of 25 donor-advised funds hosted by the Initiative Foundation. In 2020, Initiative Foundation-hosted donor-advised funds disbursed

“ Little Falls has been good to us. Because we’ve been fortunate in life, we decided it would be a great idea to share back with the organizations we have close affiliation with some of the success that we’ve enjoyed.” about $660,000 in grants throughout Central Minnesota and beyond. “Donor-advised funds have become wildly popular,” said Kate Bjorge, community philanthropy manager at the Initiative Foundation. Funds are easy to establish and can range in size from a minimum of $20,000 up to multiple millions of dollars. In addition to serving as a great vehicle for giving back to your community and supporting your passions, donor-advised funds provide meaningful tax advantages and allow donors to give charitably for years or even generations. And, as the name suggests, donors retain a strong voice in how grants from their fund are distributed. Once donors advise the Initiative Foundation on the grants they want to award, the Foundation manages the process, including validation steps to ensure the recommended recipient is legally eligible to receive the award. “We think that’s another benefit to establishing a donor-advised fund with the Initiative Foundation,” Bjorge said. “Our goal is to make it easy for donors to express their charitable wishes and then have the Foundation and its staff handle all the details.” In addition, donor-advised funds aren’t required to make a minimum distribution in the same way that community foundations are obligated to do, Bjorge said. “And they don’t have to make grants or recommendations at a particular time of year. They can make their recommendations on their time and terms,” she said. “It’s really that flexibility that donors appreciate.” The Initiative Foundation takes care of the rest, including the back-end paperwork and document filing that is necessary in the grantmaking world.

COMMUNITY SERVICE

The Initiative Foundation also encourages donors to think about the communities that matter to them and “how they can join with us to make a meaningful difference locally,” Bjorge said. During 2020, with the arrival of the pandemic and the economic struggles it wrought, several donor-advised funds consulted with the Initiative Foundation on how to best direct their resources. “We were able to work together and focus on shared solutions,” she said, which included support for local food shelves and other nonprofits. Since the onset of the pandemic, organizations have contacted Bjorge to ask whether there are any donor-advised funds that might assist them: “I can get on the phone to donors and say, ‘Hey, this may or may not fall within your funding priorities and the things that you care about. But because you are part of our region, will you consider a grant recommendation to meet this need?’ And many of them do.” Community support is certainly the rationale behind the Camerons’ donor-advised fund. The couple plans to increase their contributions over time: “This is just the start for us, for what we hope will be a lifelong—and after—pattern of giving to organizations that we are committed to in Little Falls.”

PAUL CAMERON: “This is just the start for us, for what we hope will be a lifelong—and after—pattern of giving to organizations that we are committed to in Little Falls.”

MAKE YOUR COMMUNITY CONNECTION A donor-advised fund is a flexible and easy-to-establish vehicle for giving charitably to the causes that matter most to you. Donor-advised funds can be created with gifts of cash, securities, real estate or other assets. The fund can be invested for growth, which permits you to make annual gifts to your preferred charities. To explore the benefits of a donor-advised fund, visit ifound.org/create-fund or contact Kate Bjorge at (320) 631-2048 or by email at kbjorge@ifound.org.

FALL 2021

YOUR GIFT Makes All The DIFFERENCE Your donation positions the Initiative Foundation to provide programs and services that address today’s challenges and secure a vibrant future for our children, families and communities. Use the enclosed envelope or visit ifound.org/give. Thank you for supporting Central Minnesota!

SUPPORTING EMERGING LEADERS

Investing in Child care solutions

Championing Community Causes

EVERY GIFT CAN BRING LASTING CHANGE. Gifts of $1,000 or more significantly impact the region, providing services and supports for nonprofit organizations, child care and early childhood programs, emerging entrepreneurs, local businesses and more. Together, with recurring monthly gifts of $25, $50 or $100, we will create lasting solutions for Central Minnesota. To discuss detailed giving options or year-end donation strategies, contact Carl or Mike from our external relations team. We will be happy to assist you in planning your gift.

To make an online gift, visit ifound.org/give.

Mike Burton:

Carl Newbanks:

mburton@ifound.org (320) 631-2059

cnewbanks@ifound.org (320) 631-2042

26 Initiative Foundation ifound.org

As the END OF THE YEAR APPROACHES, You may be LOOKING FOR WAYS to SAVE ON TAXES and END THE YEAR WELL. OUTRIGHT GIFTS OF APPRECIATED ASSETS

LIFE INSURANCE GIFTS

CHARITABLE LIFE INCOME PLANS

CHARITABLE LIFE ESTATE ARRANGEMENT

Gifts of appreciated assets such as securities or real estate are an excellent way to support the Initiative Foundation. These gifts can provide you with numerous benefits:

Making a gift of your old, unneeded, or obsolete life insurance policy can provide you with the following benefits:

If you own low-yielding assets and seek a higher income, a charitable life income gift such as a charitable gift annuity or charitable remainder trust is worth exploring. In exchange for your gift of cash or appreciated securities, you reap multiple benefits:

If your estate plans include leaving your residence (home, farm, vacation home) to charity, you may wish to create a charitable life estate arrangement. You can make a gift to us of your property today and receive the following benefits:

•R eceive payments for your lifetime(s) •G enerate a current income tax deduction •B ypass all or some of capital gains on appreciated assets •E njoy increased financial security

•C urrent income tax deduction •L ife use and enjoyment of the property •A lasting legacy to further our mission

•R eceive an income tax deduction, based typically on the asset’s fair market value •A void federal and state capital gains taxes •A void the Affordable

•R eceive a charitable income tax deduction •R educe your taxable estate •P reserve your cash and savings

Care Act Medicare tax

HAVE YOU CONSIDERED INCLUDING CENTRAL MINNESOTA IN YOUR WILL? Visit our website to access gift-planning guides, calculators and a library of information to assist in your gift-planning efforts. Visit ifoundgiving.org or contact a member of our external relations team.

405 First Street SE, Little Falls, MN 56345 | (877) 632-9255 | ifound.org This information is not intended as tax, legal or financial advice. Gift results may vary. Consult your personal financial advisor for information specific to your situation.

FALL 2021

Relief, Recovery, Resiliency A year like no other.

2020 Annual Report Visit ifound.org/about-us/annual-reports to read the Foundation’s 2020 annual report. 28 Initiative Foundation ifound.org

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FALL 2021

—Help Wanted—

Child Care

Providers By Lisa Meyers McClintick | Photography by John Linn

Area colleges offer low- to no-cost accelerated early childhood certificates

BACK TO SCHOOL: Mande Hatten, owner/operator of Merry Moose Childcare and Preschool in Richmond and Rockville, was excited to have eight staff members complete St. Cloud Technical and Community College’s accelerated early childhood certification program.

Rachel Thompson was pregnant with her second child when the pandemic hit and her child care provider—who suddenly had her school-aged kids at home—decided to close. That left Thompson and her husband, Jesse, on an urgent hunt for two child care openings as her September 2020 due date neared. “It’s very difficult to find the infant spots in particular,” the Sauk Rapids resident said. The couple criss-crossed their close-to-home area, from Foley to St. Augusta, and went through three providers during an 18-month stretch. “It was near impossible, even when looking at child care centers,” which typically have more capacity than home-based providers. If her St. Cloud-based job hadn’t allowed work-from-home flexibility, or if she hadn’t had relatives to help when child care 30 Initiative Foundation ifound.org

operations closed due to COVID exposures, she or her husband would have had to quit work to take care of their daughters. Mande Hatten is the owner of Merry Moose Child Care and Preschool in Richmond and Rockville and a recipient of an Initiative Foundation emergency child care grant in the early days of the pandemic. She said demand is so high that her available child care slots would be booked through 2023 if she weren’t expanding her Richmond location. She and her staff will be able to add 80 more children to their current roster of 129 by the end of the year. Expansions and new providers, though, aren’t keeping pace with an estimated 4,000 Minnesota child care slots that have been lost—mostly in Greater Minnesota—between late 2019 and late 2020, according to The Center for Rural Policy and Development. The pandemic piled on to what was already a steady decline in

providers as child care evolved from traditional babysitting to more structured early childhood education. The COVID-19 outbreak added new rules, greater responsibility, increased risk and even some resentment as parents or providers—or both—were left without a reliable income when COVID exposure forced quarantines. “The region is so desperate for child care providers that there’s a bottleneck for anyone returning to work,” said Don Hickman, the Initiative Foundation’s vice president for community and workforce development. “An estimated 15,000 to 17,000 more child care spaces are needed in Central Minnesota alone.”

Fast-Tracking Child Care Certification

Nonprofit organizations, including the Initiative Foundation, along with regional colleges, are working together to find ways to increase interest in the child care profession. One solution is to fasttrack early childhood certification with new online classes that can be completed in up to six months. With the current low wages for child care providers top-of-mind, some colleges have waived tuition and book fees for successful graduates. “We took away the barriers for coming back to school,” said Annette Weaver, education coordinator for Child Care Aware based at Pine Technical and Community College (PTCC) in Pine City. With funding from First Children’s Finance and a $10,000 grant from the Initiative Foundation, the college was able to quickly pull together an accelerated early childhood certificate program that began last spring and wrapped up this summer with 23 graduates. It’s an effort that’s improving the quality of the region’s child care and makes it a more rewarding career. The program caught the attention of administrators at St. Cloud Technical and Community College (SCTCC), which launched a three-month accelerated certification with funding help from the Initiative Foundation and United Way of Central Minnesota. Central Lakes College in Brainerd also has received support and will join the fast-track certification effort in January 2022. Expanding the region’s child care options is complex since the business model is largely parent-funded, said Shanda Davis, dean of business, information technology and online learning at SCTCC. “There’s no one organization that’s going to solve this.” Parents can’t get back to work without child care, and increasingly competitive retail, food service and manufacturing wages make it hard for child care centers to retain employees.

for students in more remote areas. Schmitz has been able to move up from being an aide to a teacher’s assistant and was in the process of getting a raise. “It was extremely difficult for me to juggle the classes and my full-time job,” she said, often requiring her to do homework until bedtime. “But once I was done, I was very happy I did it and don’t regret anything.” Susan Moravec, a 49-year-old mother of four, has run her home-based Love and Learn Family Child Care in Wyoming, Minn., since she was 22. She’s had her Child Care Aware rating—a designation that a Minnesota child care business has scored high on multiple measures of quality—for about three years. She decided to enroll in the certification program to jumpstart her longtime desire to pursue an early childhood degree. The accelerated early childhood certification programs at PTCC and SCTCC are designed as a building block for a one-year, two-year or four-year degree. Moravec said going through the PTCC program helped her better connect with and teach the children in her care, up to a dozen of them ranging in age from six weeks to 12 years old. She and Schmitz also enjoyed the unexpected camaraderie from their virtual classmates, swapping tips for teaching letters and numbers, dealing with challenging behaviors, and setting up the best learning environments to get kids academically and emotionally ready for school. “There are just so many ideas we get from each other,” Moravec said.

Education Barriers Removed

Like many full-time child care aides or assistants, Sarah Schmitz, a 2019 Sartell High School graduate, didn’t have the funds or the time to attend in-person college classes that would advance her early childhood career and potentially earn more money at Mustang Munchkins Daycare in Mora. She could, though, manage the accelerated program at PTCC. The college offered online classes two nights a week and shipped books to students, along with laptops and internet hot-spot devices

ADVANCEMENT, OPPORTUNITY: Sarah Schmitz (right), a 2019 Sartell High School graduate, took advantage of the accelerated child care certificate program at Pine Technical and Community College and is now a teaching assistant at Mustang Munchkins Daycare, owned by Heather Emslander, in Mora.

“ The region is so desperate for child care providers that there’s a bottleneck for anyone returning to work.”

FALL 2021

Better Skills Help COVID Kids

Hatten was an in-home family child care provider in the St. Cloud area for 18 years before getting her early childhood degree and opening her first child care center in Richmond. She’s excited to have eight of her 39 staffers currently in the second half of SCTCC’s accelerated early childhood certification program. The program began mid-summer and was expected to wrap up with 18 graduates. Planning for a summer 2022 program is under way. For Hatten, she could see results immediately as her staff learned more about early childhood education, such as positive behavior systems and how to be less reactive to challenging kids. “They look at things differently and try to figure out the child behind the behavior,” she said. That’s especially important right now as they’re seeing the impact of pandemic isolation with toddlers who haven’t been in many social settings, had the chance to be out in the community or to practice transitions between different settings. At PTCC, a second group of participants began the accelerated certification program in September, and there’s a waiting list for the spring class. In the more sparsely populated areas of Central Minnesota, program leaders hope more students might be inspired to open home-based child care centers, Hickman said. Some may even need a second career after job losses due to COVID. “These programs improve the quality of care for these kids and make the child care field more attractive,” he said. “You can go up on an economic ladder and have a better standard of living.”

Program Can Boost Equity

Providers who have early childhood certification and a Parent Aware rating can qualify for state funding and scholarships that help to support child care for low-income families. That can create a steadier income for providers while enabling parents to work. Community leaders also are talking about other ways to make child care a more rewarding profession, including ways to leverage purchasing power as a group, whether it’s for everyday supplies, educational materials or something as pivotal as health care benefits, Hickman said. That kind of benefit makes $12 to $13 an hour wages look more attractive. While the certification program was intended to train a fresh wave of child care providers so more parents could get back to work, additional benefits are being realized. SCTCC staff point out that the certificate program’s flexible, online delivery and the opportunity to have tuition waived upon graduation creates more equitable access for students, especially those who lack transportation or college savings or who have job or family caregiving obligations. “I think the benefit to the community is priceless,” especially when considering the biggest winners are kids who will get a better early childhood education, said Emmanuel Awuah, SCTCC vice president for academic affairs. “We are preparing the future workers, scholars and leaders in our community. The return on investment will be many times over.”

32 Initiative Foundation ifound.org

CARING, LEARNING: The pandemic piled on to what was already a steady decline in providers as child care evolved from traditional babysitting to more structured early childhood education.

Support Regional Child Care Initiatives Central Minnesota child care providers have had to turn down the heat, buy fewer toys and art supplies, cut back on outings for their children, and dip into emergency funds—all to serve their families and stay in business. The pandemic has been challenging in both financial and personal terms for what’s long been a challenging business. The Initiative Foundation and its federal, state and regional partners are working to make a difference. And now you can, too. Make a gift today to the Initiative Foundation-hosted Child Care and Early Childhood Education Fund at givemn.org/IF-Child-Care. Your generosity will support the Initiative Foundation’s Child Care Solutions program and its community-based efforts to address the lack of quality, affordable child care across the 14-county region.

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34 Initiative Foundation ifound.org

Since its inception in 1986, the Initiative Foundation has helped to change the economic and charitable landscape of Central Minnesota. From meeting the needs of communities in crisis, to making the most of new opportunities, the Initiative Foundation is all about building a more resilient Central Minnesota economy. One of six Minnesota Initiative Foundations first launched with support from the Minneapolis-based McKnight Foundation in 1986, the Initiative Foundation has had a hand in everything from diversifying Central Minnesota’s economy in the wake of the farm crisis to empowering the region’s next generation of diverse entrepreneurs. To celebrate the Foundation’s 35th year, IQ Magazine recently sat down with President Matt Varilek, Kathy Gaalswyk, founding president, and Traci Tapani, chair of the Board of Trustees, to talk about the Foundation’s regional impact.

The Initiative Foundation AT 35

By Laura Billings Coleman

Describe the landscape in Central Minnesota in 1986 when the Initiative Foundation first got its start. KG: The mid-1980s were a really difficult time in rural America, and Minnesota was right in the middle of it with double-digit unemployment, recession, banks in crisis and rural towns that were just closing down because of the collapse of family farms. The McKnight Foundation, which was the largest private foundation in the state at that time, wanted to help, but they also recognized they couldn’t see the solution from an office building in the Twin Cities. So Virginia Binger, William McKnight’s daughter, and Russ Ewald, the president of the foundation, went out across the state, meeting with everyone from farmers to civic leaders, to gather input. McKnight valued the voices of rural people and believed that the people closest to the problems were the ones in the best position to find the solution. And the solution they proposed was unusual—building a network of sister institutions that would provide grants in the community as well as gap lending to bring new capital into hard-hit rural areas. It was so unusual, in fact, that you had to get special permission from the IRS to become a community lender. Why was that so critical? KG: At the most local level, we needed to diversify our economy so that people

weren’t so dependent on agriculture or mining, and the most effective way to do that was by starting and growing small businesses. Many rural families didn’t have collateral, or were poor credit risks, so that birthed the concept of being an alternative or gap lender, coming alongside those local financial institutions to share some of the risk and inject some capital into businesses getting started. The IRS eventually accepted this as charitable work because it was all about pulling people out of poverty to create quality jobs. MV: In this world, where there’s so much drive towards specialization, it’s remarkable that the folks who established this organization were willing to break the mold and have a diversity of functions under one roof, which is now our unique strength. Today, we’re a community foundation that does donordriven grantmaking, a Community Development Financial Institution that lends to the community, and a nonprofit that trains entrepreneurs to be effective leaders in their communities, and we find synergies across those distinct functions. It’s extraordinary that the people who established this organization had that vision 35 years ago. KG: It sounds like it was a grand plan, but we broke all kinds of unwritten rules because we didn’t know better. It was about bringing change to rural

communities. The Initiative Foundation was launched during a crisis, and it’s also helped many communities manage crises— from public health challenges like meth addiction to local catastrophes like fires and tornados. How does the Initiative Foundation play that role? TT: We’re not the Red Cross, and I don’t think of the Foundation as a crisisresponse organization, but it’s true that the Foundation is excellent at responding in times of crisis. I think that’s because of some of the amazing work we’ve done building relationships and connections with nonprofits across the region, and by helping communities be deliberate and strategic, and by thinking about our community from this framework of commitment, hope and love for rural communities. How did that network of connections help during the most recent crisis, the COVID-19 pandemic? MV: When the governor and lawmakers received small business relief funds at the federal level to allocate to the region, the Initiative Foundation was a natural network to use because we’re grantmakers who also do business lending, so we could quickly validate the eligibility of people operating businesses and distribute $7.8 million in federal support for businesses that were suffering.

FALL 2021

IMPACT

SINCE INCEPTION

8,500

Over 130

$52M

$22.6M

Partner Funds with

grants for a total of

COMMUNITY

ANNUAL LENDING OVER TIME

in Assets

GENEROSITY

4.0 3.5 3.0

Millions

2.5 2.0 1.5

Total New Loans ($)

1.0

Linear Trend

0.5

*1987-2008 as of 6/30

0.0

TOTAL GRANTS ISSUED

Note: Grantmaking surged in 2020 with the pandemic-era distribution of nearly $8 million in federally funded small business relief grants.

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

Millions

6 4

Total Grants ($) COVID-19 Relief

Linear Trend

*1987-2008 as of 6/30

1987

(2)

COVID-19 IMPACT UPDATE

1,600

Businesses and nonprofits financially supported

36 Initiative Foundation ifound.org

$1.2M

Million in new loans

$2.85M Million in adjusted loan terms

$11.1M

Small business, child care & relief grants CONTINUED ON PAGE 38

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The Initiative Foundation at 35

CONTINUED FROM PAGE 36

“ We're proud that, for every $1 that comes to us from a source within our 14 counties, we are able to invest, on average, around $4 back into those counties. It’s a very strong return on investment that we hope makes the case for our supporters to continue investing in what we do.”

Managing crises is really where we feel like our value to the region is maybe most apparent, but our impact extends well beyond crisis response. If you add up the total grantmaking and total lending we’ve done since our inception, we’ve invested in excess of $112 million in the region. And we’ve made that funding go even farther thanks to lots of wonderful partnerships with individuals, businesses and units of government. We’re proud that, for every $1 that comes to us from a source within our 14 counties, we are able to invest, on average, around $4 back into those counties. It’s a very strong return on investment that we hope makes the case for our supporters to continue investing in what we do. Why do donors want to support the Initiative Foundation, and why are they important to your work? TT: People who live here want to make donations in the region and they want to see the outcome of their generosity. Having a trusted partner like the Initiative Foundation matters to people, and our donors also know the Foundation has done great work in helping other nonprofit organizations in the region develop their strengths and to stay viable for the long term. KG: Having a strong donor base of people within the region who are putting their money where their heart is shows that local people believe in and are engaged in supporting the Initiative Foundation’s work. Donors are critical to creating the magnetism we often talk about at the Initiative Foundation, which is about helping to attract resources to the region that otherwise might not land here if we didn’t offer the structure, staffing and skills to deploy those resources.

38 Initiative Foundation ifound.org

Economic diversification, building the capacity of community nonprofits, and early childhood development have all been themes of the Initiative Foundation’s work over the years, but how have those themes evolved? MV: There’s been a lot of consistency in our mission, combined with a lot of entrepreneurial flexibility, so as challenges and opportunities have evolved, we’ve changed as well. For instance, we’ve always had a focus on early childhood, but over the years it’s widened to include a broader spectrum of stakeholders. Child care is a place where you have this intersection of the child’s social and emotional development and the economic needs of a community. Parents want to be able to work and fill critical positions in their community, or go and start their businesses, but they can’t if there isn’t a quality, affordable place to leave the kids during the day. That’s why we see child care as one of the systems where our support and intervention can make a difference. Has the growing diversity of Central Minnesota changed your approach? MV: Diversity is a driving force in the overall population growth of our 14-county region, which has expanded by 7 percent over the last decade. While we’ve always been focused on lending and providing access to capital, more recently we’ve built out our entrepreneurship portfolio to include the Initiators Fellowship, which works to accelerate the success of what we call social entrepreneurs—people who are building businesses and enterprises that benefit their communities—and our Enterprise Academy, which is 12 weeks of small business training, especially for underserved communities, communities of

color, and lower-income individuals. We’re here to serve the people of this region, and that means communicating across cultural differences. What inspires you about the Initiative Foundation’s history and its future? KG: I think the Initiative Foundation’s strength is about not being afraid to step into complicated issues and not have an agenda other than a values-driven approach with a focus on respect and honest communication. A unique thing we’ve brought to the table has been a commitment to come together to identify what’s changing, what are some opportunities ahead, what are some hard things we need to do, and ask ourselves, “How can we help people help themselves?” What do you think the next decade will look like for the Initiative Foundation? MV: The fact that we can talk about the next 10 years, and not have any question about whether the Foundation will exist, is an important part of who we are as a source of stability and resilience in the region. With the economy, we envision a region where we have an abundance of talented people and job-creating enterprises that contribute to economic growth and vitality. When it comes to community, we envision a region of highly engaged communities where people choose to live, work and play. When it comes to generosity, we envision a region where people continue and grow in their ability to give of their time, talent and resources. And when it comes to our work as a whole, we want to stay true to our mission as we get even better at doing what we do and to grow, along with the region, so that we can take advantage of more opportunities and tackle more challenges.

The NEED for SPEED The pandemic proved it: Rural areas badly need broadband. So how can they get it? By Gene Rebeck | Photography by John Linn

When the pandemic hit, Alise Sjostrom found out how crucial a strong and steady internet connection can be.

“ It causes a lot of frustration amongst employees when they’re trying to get work done efficiently. The internet drops, and then 10 minutes later you can do something or finish the task you were doing.” — Alise Sjostrom, co-owner, Redhead Creamery

40 Initiative Foundation ifound.org

Sjostrom is co-owner and founder of Redhead Creamery, an artisanal cheese business she runs on her family’s dairy farm north of Brooten. Before 2020, she had sold much of her cheddar, brie and whiskeywashed munster to restaurants and through a distributor and specialty grocers, as well as her own on-farm store. The lockdown disrupted many of her wholesale sales channels. In response, Redhead pushed its sales online, setting up door-to-door delivery service via e-commerce. “We used Facebook a lot with its advertising options,” Sjostrom said. “It worked for us.” Just one problem: She’s had to fulfill those orders via an often sluggish internet connection. “The internet drops, and then 10 minutes later you can do something or finish the task you were doing,” said Sjostrom, whose team experiences frequent interruptions. “It can be extremely frustrating to get work done. You can feel kind of paralyzed.” Like most residents and business owners in the more rural parts of Minnesota, Sjostrom would like access to

robust, high-speed broadband. Just over half of Minnesota’s rural communities have access to internet service that meets the state’s minimum standard—download speeds of 25 megabits per second (Mbps) and upload speeds of 3 Mbps. The statewide figure rises to 70 percent when the Twin Cities metropolitan area is included. During the past couple years—spurred by COVID-19—people who didn’t fully grasp the meaning of broadband now realize how essential it is to their personal well-being, and to that of their community. But what about areas without broadband access? Experts advise: Get to work, or get left behind. Why the Need for Speed? Nearly everyone has internet connectivity of some kind. But what makes that connectivity truly beneficial is speed. This is where those megabits per second become critical. “Why do we need broadband? Because people without it are not able to participate in society,” said Bernadine Joselyn, director of public policy and engagement for the Blandin Foundation. “It’s not just about gaming and Netflix,” she said. “It’s about opportunity.”

The pandemic sent that message loud and clear. People without a fast, reliable internet connection have found it harder to get jobs or take college classes. Businesses can experience lower sales. Houses without it are less likely to sell for a good price. And farmers need broadband to profit from all the data they can collect about their fields, such as the temperature and water content of their soil. When it comes to connectivity, there are two kinds of speed—download and upload. Very simply, download is what you receive, and upload is what you send. During 2020, cloud computing platforms— Microsoft 365 with office applications, video conferencing solutions like Zoom and Microsoft Teams, and content-sharing solutions such as Box and Dropbox— became household names. And they all require robust upload/download speed. Residences and businesses with “a wicked upload speed can create value and earn income,” Joselyn said. In fact, broadband enables residences to become businesses. “These days, if you have less than 25 megabits down and 3 up, it means you don’t have broadband,” said Bill Coleman, principal at Mahtomedi-based Community Technology Advisors, which specializes in helping communities organize and implement plans to improve broadband infrastructure. If you have only three megabits of upload speed, “one Zoom call will use all that, easily,” he said.

Where can a home or business get more megabits? Most communities have access to high-speed internet from their cable TV provider, though that’s typically available only in places with urban population densities. Fixed wireless is an option for residents in lower-density areas. However, it tends to work less well in hilly and/or forested areas, or for those living more than five to seven miles from a tower. A Digital Subscriber Line, or DSL, which uses existing phone lines, loses capacity the farther you are from the main distribution point. Many Minnesotans rely on cellular for their internet connection, though the quality of that connection also is highly dependent on location. The option with the most capacity for speed is fiber-to-the-home, or FTTH. “If you have fiber to your home, it’s easy to get 1,000 megabits of service, up and down,” Coleman said. FTTH is also the most expensive option. That’s one of the reasons that he also noted that “in many ways, the gap between served and unserved is increasing.” What’s more, if a community doesn’t already have broadband, Joselyn said, “it’s not going to get it unless residents figure it out for themselves.” In other words, underserved areas are likely to wait a long time for broadband service to come to them. They have to go out and get it.

Making Connections Joselyn recommends that underserved communities band together to establish an advocacy team that’s willing to put in the work to engage and educate residents and to attract a provider. To help communities get started, Blandin offers advocacy team leadership training, coaching, technical assistance and funding for feasibility studies and some broadband adoption projects. The local advocacy team develops the projects that will further the community’s technology goals, Joselyn said. Broadband advocacy takes a variety of forms. The North Branch-based Chisago County Housing and Redevelopment Authority-Economic Development Authority (HRA-EDA) has been actively coordinating broadband development throughout the county, with the goal of getting broadband access for all residents and businesses. Several county townships have received grants from Minnesota’s Border-to-Border program,

“If your community doesn’t have broadband today, it’s not going to get it unless residents figure it out for themselves.” — Bernadine Joselyn, director of public policy and engagement, Blandin Foundation

FARMS & FIBER: “Some of those farmsteads have a half-mile driveway that costs $15,000 just to bring a drop-down along the edge.”

FALL 2021

PROVIDER & PARTNER: Kristi Westbrock, CEO and general manager at Brainerd-based cooperative CTC, builds partnerships to bring broadband to areas with low population density.

which provides support to unserved or underserved areas. Nancy Hoffman, the HRA-EDA’s executive director, said most of northern Chisago County has been able to get FTTH through CenturyLink, and the county’s higher-density cities all tend to have good broadband. Development densities are lower in the county’s south and east, which makes it harder to attract providers. Low density is something that underserved areas have long struggled with—it’s why they’ve been underserved. “There just aren’t that many broadband providers looking to invest in rural areas,” Coleman said. For larger providers, low density means a low return on the investment. And smaller, willing providers don’t have the capital to cover the whole cost of installation. Though broadband advocacy groups can tap a number funding sources, such as the Border-to-Border program, communities also need to chip in their own money, primarily through bonding or tax increases. That’s typically a touchy topic for residents. One way advocates can address it: Show how broadband will pay for itself. Hoffman, for instance, lives in a township that received a state Border-toBorder grant. The township used bonding to make up the difference. Hoffman’s household will pay about $120 a year for 15 years to cover the cost. But she also was able to cancel her satellite TV, which saves her family about $100 per month. “We really see [broadband] as an economic development tool,” Hoffman said. In a 2016 Chisago County survey, 31 percent of respondents said they would operate a home-based business if they had broadband access; 45 percent said they would use it for education. The right way to look at broadband, in other words, is not as an expense, but as an investment.

provider is CTC, a Brainerd-based telephone cooperative, which serves a wide area in Central Minnesota, reaching up into the Iron Range. Its FTTH networks provide speeds up to one gigabit (1,000 megabits) per second, both up and down. CTC also helps communities and regions find additional financial support, said Kristi Westbrock, CEO and general manager and a member of the Initiative Foundation’s Board of Trustees. In the most rural parts of Minnesota, CTC aims for at least 80 percent in outside funding. Westbrock said CTC can “make a model work with 20 percent of our own capital.” One big reason why rural FTTH installation is so expensive: driveways. “Some of those farmsteads have a half-mile driveway that costs $15,000 just to bring a drop-down along the edge,” Westbrock said. Still, CTC has completed projects in low-density areas that have raised funding from the U.S. Department of Agriculture’s Broadband ReConnect Fund, among other sources. A particularly massive source is on its way with the passage of the federal Infrastructure Investment and Jobs Act. The infrastructure bill provides $65 billion in funding for broadband development in unserved and underserved areas. What might this mean for underserved communities? “Get ready,” the Blandin Foundation’s Joselyn advised. Though $65 billion may seem to be a limitless font of funds, “there will be a lot of competition for the money,” she added. That’s also true of all the kinds of broadband funding available for rural and other underserved areas. If your community doesn’t have an organization and a plan in place, Joselyn said, “you’re going to get left behind. And if you don’t have a plan, get help to get a plan.”

Getting the Money Another useful strategy for community broadband advocates: Find a provider willing to be your partner. One such

CONTINUED ON PAGE 44

42 Initiative Foundation ifound.org

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THE NEED FOR SPEED CONTINUED FROM PAGE 42

BURIED MEGABITS: The option with the most capacity for speed is fiber-to-the-home, or FTTH.

HOW FAST IS YOUR INTERNET? The Minnesota Legislature established minimum download and upload speeds for all homes and businesses: •B y 2022, 25 megabits download and 3 megabits upload. Of note: There are 140,000 Minnesota households without access to the 25/3 standard. •B y 2026, 100 megabits download and 20 megabits upload. The Blandin Foundation and the Minnesota Department of Employment and Economic Development (DEED) Office of Broadband Development have analyzed how close Central Minnesota’s counties and sovereign tribal nations are to reaching those goals, relative to all 87 Minnesota counties and the state’s 11 tribal nations. The adjacent 2020 rankings illustrate where Central Minnesota ranks in download/upload speeds for current and 2026 standards.

County

2022 Standard (25/3 Mbps)

2026 Standard (100/20 Mbps)

Benton

Rank: 23 - 92.05%

Rank: 21 - 89.36%

Cass

Rank: 43 - 84.53%

Rank: 67 - 63.21%

Chisago

Rank: 44 - 84.34%

Rank: 53 - 71.92%

Crow Wing

Rank: 25 - 90.61%

Rank: 26 - 86.6%

Isanti

Rank: 68 - 76.77%

Rank: 81 - 48.63%

Kanabec

Rank: 83 - 60.75%

Rank: 87 - 26.41%

Mille Lacs

Rank: 37 - 87.15%

Rank: 70 - 58.9%

Morrison

Rank: 55 - 82.7%

Rank: 56 - 70.03%

Pine

Rank: 84 - 60.24%

Rank: 85 - 39.13%

Sherburne

Rank: 54 - 82.9%

Rank: 50 - 73.66%

Stearns

Rank: 33 - 88.04%

Rank: 34 - 82.41%

Todd

Rank: 34 - 82.41%

Rank: 80 - 49.12%

Wadena

Rank: 17 - 95.53%

Rank: 13 - 95.53%

Wright

Rank: 27 - 89.69%

Rank: 33 - 82.51%

TRIBAL NATIONS Central Minnesota is home to two sovereign tribal nations: the Leech Lake and Mille Lacs Bands of Ojibwe. They are among 11 sovereign tribal nations in Minnesota. Leech Lake Band of Ojibwe Rank: 3 of 11 91.68%

Rank: 4 of 11 65.01%

Mille Lacs Band of Ojibwe

Rank: 5 of 11 61.07%

Rank: 6 of 11 61.12%

Source: Blandin Foundation and the Minnesota Department of Employment and Economic Development (DEED) Office of Broadband Development.

44 Initiative Foundation ifound.org

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MAKE A LOCAL DIFFERENCE: Join the Community Builders Circle The Community Builders Circle is comprised of businesses and individuals who contribute $1,000 or more per year to support the Initiative Foundation’s General Endowment or programs. When you become a Community Builders Circle member, you widen the circle of the Initiative Foundation’s work, driving economic progress and community vitality in Central Minnesota for decades to come.

Support EMERGING LEADERS

Invest in EARLY CHILDHOOD

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46 Initiative Foundation ifound.org

Champion COMMUNITY CAUSES

A Special Thanks to Our

COMMUNITY BUILDERS CIRCLE Members. Your Region. Your Initiative. Your Foundation. The generosity of Community Builders Circle members unlocks the power of local leadership, nonprofits, small businesses and emerging entrepreneurs. Thank you for your sustained financial gifts that help to make Central Minnesota an exceptional place to live, work and raise a family. BUSINESSES

INDIVIDUALS

$2,000+

$1,000+

• Anderson Brothers

• American Heritage National Bank

Construction Company • Arvig Communication Systems • Bremer Bank • Clow Stamping Company • Compeer Financial • Connexus Energy • Crow Wing Power • DeZURIK, Inc. • East Central Energy • Falcon National Bank • Farmers & Merchants State Bank Charitable Fund of the Central Minnesota Community Foundation • Granite Partners Fund • Great River Energy • Long Prairie Packing Company • McDowall Company • Microbiologics, Inc. • Schlagel, Inc. • Sherburne State Banks & Sentry Banks • Sourcewell • Stearns Electric Association • St. Cloud Hospital / CentraCare Health System • U.S. Bank Foundation

• American National Bank

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• Cambridge Medical Center

on behalf of Allina Health System • Citizens State Bank of Waverly • Consolidated Telecommunications Company • DAYTA Marketing • First Bank & Trust • First National Bank North • First National Bank of Milaca • First State Bank of Wyoming • First Western Bank & Trust • Frandsen Bank & Trust, Baxter, Crosslake, Nisswa, Foley, Braham, Forest Lake & Pine City • Harvest Bank • IPEX • LINDAR / Avantech

• Pequot Tool & MFG., Inc. • Pine Country Bank • RiverWood Banks • Schlenner Wenner & Co, St. Cloud • Stearns Bank NA • The Bank of Elk River • The Saint Paul Foundation • Todd-Wadena Electric Cooperative • Wadena State Bank • West Central Telephone

Association • WiDSETH • Wyoming Machine, Inc.

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Minnesota Community Foundation • Michael & Kathleen Burton • Linda Eich DesJardins & Joseph

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Join the Community Builders Circle today. (877) 632-9255 | ifound.org 405 First Street SE, Little Falls, MN 56345

To make a pledge and join the Community Builders Circle, Contact Carl Newbanks (cnewbanks@ifound.org; 320-631-2042) or Mike Burton (mburton@ifound.org; 320-631-2059), or visit ifound.org/give to give online.

As a 501(c)(3) nonprofit organization, your Initiative Foundation contribution is tax-deductible to the extent allowed by law. The Foundation owns and manages financial contributions for the benefit of Central Minnesota communities.

FALL 2021

Leave a Legacy for Future Generations Donate to the Nisswa Lake Park

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walk New Walking Tr ails to Lake View s

bike picnic boat fish swim

New Gazebo

Changes are happening at the Nisswa Lake Park and Recreation Area, including a new gazebo, walking trails, benches and the first docks. Thank you for your continued support & contributions!

Please make your tax deductible donation payable to our 501 C 3 partner — the Brainerd Lakes Area Community Foundation, c/o Friends of Nisswa Lake Park. Mail to: Friends of Nisswa Lake Park PO Box 262, Nisswa, MN 56468 To learn more about this project or volunteer, call (218) 963-4444. 48 Initiative Foundation ifound.org

view ski canoe play

home made

GroShed Emily, Minn.

By Maria Surma Manka Photography by John Linn

Fresh tomatoes in December. A salad from the garden when it’s 20 degrees below zero outside. In northern Minnesota, Jon Friesner made these dreams a reality with GroShed, an agricultural company that provides standalone, thermal sheds that can grow vegetables hydroponically year-round. A father of six children, Friesner is also a lifelong gardener who, with his wife Kate, wanted to give their kids a love of fresh vegetables. But in Minnesota, that’s only possible for a few months each year. Friesner considered installing an indoor growing facility in their home in Emily, but it took up too much space. So the 2020-2021 member of the Foundation’s Initiators Fellowship program began researching hydroponic growing methods, which don’t require soil; instead, plants rely on nutrient-rich water to grow. No weeding and no herbicides or fungicides needed. As the owner of a residential construction company, Friesner put his skills to work and built a warm shed for a year-round hydroponic garden. It worked: The family grew tomatoes, cucumbers, lettuce and microgreens. As neighbors became more interested in sheds for themselves, Friesner decided to make GroShed a full-time business in 2019. Today, he’s on a mission to get fresh food into people’s hands any time of year. “When it’s wintertime and 30 below and we get pictures from customers of their fresh salads, that’s what fills my tank,” he said. “Even if they’ve had a GroShed farm for a year or two, customers are still shocked that fresh vegetables are possible year-round. I love that.”

We learned more from Friesner about what’s growing at GroShed. 1. F riesner and two employees build each GroShed by hand, whether it’s a standard build or a custom order with materials to match a house. GroSheds range from 96 to 200 square feet and also can be custom-ordered. 2. I nside the shed, an 80-gallon reservoir runs around the clock, moving nutrient-rich water through the plant trays. “Think of it like a gutter with a lid on it,” said Friesner. “The roots are in the gutter getting nutrients. Above that is the plant getting the light.” 3. A GroShed farm arrives at a customer’s home ready to grow with tubing, lighting, water tanks, nutrient solution and the first round of plants. The grower fills the reservoir with water, adds nutrients, and plugs the farm into a typical 15-amp outlet.

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4. The automated GroShed system controls light and water cycles, pumps, fans, pH levels, humidity and temperature. The energy-efficient farm stays very warm and costs on average $65 per month to power. 5. The optimal growing conditions maximize a plant’s genetic potential, something Friesner says he didn’t fully realize at first. Peppers taste hotter. Herbs are extremely potent. Tomato plants can live for years. Flowers reach enormous sizes.

11. The farms are engineered to handle 30-below-zero temps outside and warm, humid conditions inside. Materials are mainly foam and plywood, along with commercial sheet vinyl flooring, aluminum racks and recycled plastic. It’s heated entirely by LED grow lights.

6. M ost customers grow lettuce, kale and tomatoes. “You can grow almost anything,” said Friesner. “Most customers grow things that are either expensive or low-quality in the grocery store during the winter.”

As a member of the Initiators Fellowship, a two-year training and development program for social entrepreneurs supported by a $30,000 annual stipend, mentoring and training, Friesner says he has gained access to leadership skills and networking that will help him take GroShed to the next level. “For someone like me in a rural part of the state to have access to this type of training … it’s incredible,” he said.

7. The COVID pandemic affected the business in ways both positive and negative. Orders jumped in 2020, but material costs and supply chain problems minimized profits. Things still aren’t back to normal; supply chain issues have increased average GroShed construction time from two to three weeks to more than a month. 8. The most popular farm size is 96 square feet, which includes 160 planting locations. 9. G roShed’s typical customers are retired baby-boomers, but Friesner is expanding to small family farms. “My dream is to see farmers using GroShed to sell produce to restaurants or at farmers markets in the dead of winter.” 10. G roShed was a 2019 semi-finalist in the food/ag/ beverage category for the prestigious Minnesota Cup, a yearly competition that supports entrepreneurs in their startup journey.

FALL 2021

where’s IQ?

THINK YOU KNOW? Send your best guess to IQ@ifound.org by Dec. 22, 2021. Three winners will be chosen, at random, to receive a $25 credit to apply toward their favorite Initiative Foundationhosted Partner Fund. HINT: A boardwalk memorializes 41 people killed in Minnesota’s most deadly mining accident at this location. Congratulations to everyone who correctly recognized Fair Haven Flour Mill in the spring 2021 edition. Clifford Johnson, Kevin Nelson and Chris Klinkhammer were the lucky winners of the “Where’s IQ” contest.

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