Northern Lights - Issue 15 - November 2022
PHILANTHROPY – GOVERNMENT – VENTURE NORTH: CHAMPIONS FOR SMALL BUSINESSES
Headlining Nov. 15 at Council of Mich. Foundations Annual Meeting
By AMY LANE
In communities throughout northwest Michigan, Carolyn Bloodworth of the Consumers Energy Foundation sees businesses that over a difficult last few years have been able to remain open, retain or hire staff, and adjust to new economic conditions.
It’s a testament, in no small part, to hundreds of thousands of dollars that the Consumers Energy Foundation and others in the philanthropic community have invested in Venture North Funding & Development, a Community Development Financial Institution, or CDFI, that supports small businesses with loans, grants, professional business consulting and other resources.
In its 10-county region, Venture North gives priority to serving businesses in areas of economic distress and its work has helped to “retain the economic vitality of some of these really small communities,” said Bloodworth, the Consumers Energy Foundation’s secretary/treasurer. Fueled by collaboration, she said, there’s “opportunity to leverage the philanthropy of the region, to really make impactful change.”
Carolyn Bloodworth of the Consumers Energy Foundation
Spotlight! Council of Michigan Foundations Meeting – Nov. 15
Bloodworth will be among presenters to members of Michigan’s philanthropic community gathering this month in Grand Rapids at the Council of Michigan Foundations’ annual conference. The Nov. 14-16 meeting – marking the 50th anniversary of an organization that leads, strengthens and supports Michigan philanthropy -- is expected to bring together more than 400 philanthropy leaders, trustees and staff to reflect and reimagine, learn about members’ best practices and the work of Michigan philanthropy, and hear from state and national leaders on trends, challenges and innovations in the field.
A Nov. 15 session led by Venture North will share the story of connecting philanthropy and government resources to provide help to small businesses in Venture North’s territory. The session will also highlight a new, data-driven approach to pinpoint areas and businesses most in need of resources that Venture North, a CDFI supported in part by government and philanthropy, can deploy.
The session was selected by Council of Michigan Foundations member volunteers, from more than 50 proposals, said Andrea Judd-Shurmur, CMF’s director of learning services. “What made this session stand out was the innovative partnership and collaboration opportunities that CMF members would be excited to learn more about especially given the entities that worked to address a critical community need.”
Great Ways to Support Communities and their Businesses
Take the partnerships forged and strengthened during the COVID-19 pandemic, through Venture North’s Regional Resiliency Program.
Launched with a signature $200,000 gift from the Consumers Energy Foundation in May 2020, the RRP raised funds from energy companies, community foundations, financial institutions, economic development organizations and others, all to provide more than 300 grants of up to $5,000 to the smallest of businesses -- those with nine or fewer employees.
The program reached more than $1.1 million in contributions from donors large and small and the collective philanthropy provided for grants that responded to business’ urgent and unique needs: Cash flow; business shifts in new directions; online ordering systems; general payroll as well as higher wages to retain employees; inventory, supplies and equipment; rent and utilities; and basic survival.
Now, led by a new $100,000 grant from the Consumers Energy Foundation, Venture North is amplifying its efforts to help businesses grow and thrive, expanding its mini-grants and professional business consulting.
The August 4th presentation of the Consumers Energy gift of $100,000 at Brick Wheels in Traverse City.
“Venture North hasn’t just achieved success and said that’s enough. They’re always looking to improve and enhance what they’re doing. They’re continuing to grow this work, because they recognize the value,” Bloodworth said.
In all, the Consumers Energy Foundation has given Venture North $690,000 since 2016 – more than the foundation has given to any other single entity in the region. It’s an investment that’s helped leverage nearly $1.4 million in additional contributions to Venture North, for a total impact of more than $2 million since 2016.
“We have found this to be a very successful way to support a local community and its local economy, and we would strongly encourage others to consider joining us,” Bloodworth said.
Venture North’s partners include community foundations that have provided funding, expertise and skills, as well as the U.S. Department of Agriculture Rural Development. It’s a “great example of how a public-private partnership can work, and be incredibly successful,” Bloodworth said.
Weaving a Common Course with USDA RD
Rural Development Michigan director Brandon Fewins is an additional conference panelist who sees the power of collaboration. “The story of Venture North is a great example of that – different partners joining together on a common cause, which is about community development, economic development, prosperity for the region,” he said.
“It does take collaboration. There isn’t one single entity that is going to move the needle by themselves,” Fewins said. “Everyone can have a role, everyone can provide a little bit of expertise in different areas, to see a project come to fruition.
“To me, whether it’s a foundation, a nonprofit, a municipality, we’re all equal stakeholders working to make a project come together.”
Fewins said Rural Development is “a community partner, to help communities achieve their vision.”
Rural Development has funded Venture North’s mini-grant program and technical assistance and has provided, via loan, the majority of money that Venture North lends to startups. The USDA Intermediary Relending Program offers 1 percent, low-interest loans to local lenders or “intermediaries,” who re-lend to businesses to improve economic conditions and create jobs in rural communities.
Under the program, up to $1 million is available to an intermediary lender; total outstanding debt from the program to a single lender can’t exceed $15 million. Nonprofits, public agencies and others who meet eligibility requirements – including an established record of successfully assisting rural businesses and communities and experience making and servicing commercial loans -- can apply to be intermediary lenders.
Brandon Fewins of USDA Rural Development Michigan
Funds can be used to promote community development, establish a new business, form and support microlending programs, create or retain jobs, and other business and educational purposes.
Venture North has also utilized a USDA program that provides grants to support targeted technical assistance, training, and other activities leading to the development or expansion of small and emerging rural private businesses. Businesses need to have fewer than 50 employees and less than $1 million in gross revenue, and the Rural Business Development Grants can be used on specific business projects as well as opportunities in rural areas like community economic development, leadership and entrepreneur training, and business incubators.
Fewins said Rural Development can bring much to the table in working with communities, from programs and making connections to other federal and state partners, to helping convene local stakeholders and identify areas of community need and solutions.
“We’re a tool in the toolbox to help with that,” he said. “We have programs to fit communities, but we want to make sure it is community-driven. At the end of the day, it’s the community’s vision, not ours.”
Zooming in to Help Disadvantaged Communities
Another take on helping communities and businesses in need is emerging in Emmet County. There, a pilot research project for Venture North is underway to define areas of Emmet that are economically challenged and identify target businesses that may not have access to financial capital.
Leading the work is Kelly Murdock, a veteran researcher and consultant to clients that have included for-profit firms, nonprofits and government agencies. Murdock, a presenter at the Venture North CMF conference session, is owner of Community Research Services LLC in St. Johns, a housing research and community development firm.
Murdock has more than three decades of experience in data-driven community research and analysis, including work on housing projects with other CDFIs.
Kelly Murdock, owner of Community Research Services LLC
Now, he’s deploying housing tools and research methods to the investment focus of Venture North, particularly minority or low-income individuals who own businesses, or businesses located in low-income communities. Venture North hopes to pinpoint businesses in areas of economic distress and those owned by underrepresented populations, zero in on needs and provide help with financial capital and/or business consulting.
“If I can help organizations be more effective and further the cause of community development, I’m all on board,” Murdock said.
He is using and gathering many forms of data covering income and wages, population, employment and other areas. Some data is from baseline geographic information system software that he’s used for over two decades, while other comes from on-site collection -- knocking on doors, sending emails, making phone calls and obtaining granular information on specific businesses within identified neighborhoods.
Combined, the data can produce an accurate and current picture of economic conditions and business ownership status, illustrating “impact in a community, market potential” and other elements sought by Venture North, Murdock said.
He hopes by early next year to present Venture North with a model reporting format that, once finalized, could form a template to help delineate businesses in need throughout Venture North’s service territory. Murdock’s work is being funded by a $9,500 grant to Venture North from the Petoskey-Harbor Springs Area Community Foundation.
Voices of Experience: Unique Help for Small Businesses, including the maker of the best chocolates!
Venture North board member Laura Trudeau, a presenter at the upcoming conference session, said CDFIs have “a unique role in rural areas, because a lot of times the other small business supports aren’t there. They can bring low-cost capital to partners, but can also set up structures for management support, other types of services, connecting to others in their network.”
Trudeau, who also serves on the boards of two other CDFIs -- one Detroit- and Michigan-focused and one nationally focused -- is principal of Trudeau Consulting LLC and spent nearly 16 years with The Kresge Foundation, including as senior advisor to the president and managing director of Kresge’s grantmaking program.
She pointed to Venture North’s Regional Resiliency Program as “an example of how CDFIs can work with donors in ways that are flexible and responsive to their communities.”
Venture North Board Member and conference presenter Laura Trudeau
One place to see the impact of Venture North and its investors is in the small village of Empire. There, with ties stretching all the way to Ecuador, Jody and DC Hayden have built a business upon chocolate.
It’s a confectionary labor of love that’s grown to double-digit annual sales increases and 19 full- and part-time employees, including staff for a new seasonal gelato shop opened in July. And along Grocer’s Daughter Chocolate’s path, Venture North has provided loans, grants and other assistance.
“Venture North has come in for us at critical times, to offer support,” said Jody Hayden, who will be a presenter at the CMF conference session. “The fact that they have the pulse on their client’s needs, and regularly check in, it’s super valuable.”
For Hayden, Venture North resources have included capital that she said “wouldn’t have been easy to access through other lenders” – two loans, one for $190,000 and another for $144,500 -- that enabled the Grocer’s Daughter to buy in bulk from the Ecuadorian farms where it sources most of its chocolate. The volume purchasing, via shipping containers filled with 27,000 pounds of chocolate, produced savings that the husband-and-wife team put towards other parts of the business, hiring staff and increasing wages.
Also tapped: A $5,000 Venture North grant that helped with marketing and bookkeeping services and an update to Grocer’s Daughter’s point-of-sale system. And through Venture North President Laura Galbraith – who Hayden said regularly touches base and has introduced other resources – Hayden made a connection that led to an $87,000 equipment grant through the Michigan Department of Agriculture and Rural Development that helped the business expand into frozen treats.
In the nine years since they purchased Grocer’s Daughter, the Haydens have been on the move -- learning the business, relocating, and buying buildings, including one to house the gelato shop, a larger bakery and two one-bedroom upstairs rental apartments. Packaging updates are underway that could allow expansion into regional and national store chains, and frozen shipping may be explored for gelato and cookie dough balls.
Champions for Small Businesses
Venture North support has “been invaluable,” Hayden said. “I really don’t know how we could have grown like we have, without the support of Venture North. And without Laura continuing to reach out.”
To those in government and philanthropy seeking to attain rural business growth by working with a CDFI like Venture North, she offers this:
Jody Hayden, co-owner of Grocer’s Daughter Chocolate, talks with Venture North President, Laura Galbraith.
“In supporting Venture North, you’re supporting businesses like ours that are mission-driven. I think their vetting process, and finding businesses like ours that are committed to job growth and livable wages…they do champion businesses like ours.
“Supporting a CDFI like Venture North, it’s going to be a huge payoff long-term.”
Amy Lane is a veteran Michigan business reporter whose background includes work with Crain Communications Inc., Crain’s Detroit Business and serving as Capitol correspondent for nearly 25 years. Now a freelance reporter and journalist, Lane’s work has appeared in many publications including Traverse City Business News.
