The NMTCC is a national membership organization representing Community Development Entities (CDEs) and investors working with the NMTC program. The Coalition was formed in 1998 with the principal purpose of advocating for the enactment of a federal tax credit to spur economic development in underserved areas. The Coalition works to ensure that the NMTC program can effectively be used to attract private capital and generate economic development in poor communities.

This is Harvard speak for “hold on to something, we’re going
to turn your brain into carrot soup, but you’ll be able to see things more
clearly.” This was my second exposure to the HBS Executive Education program. The first session I attended about five years ago was in a program that examined Performance Measurement for Effective Management of Nonprofit Organizations. At the end of that intensely focused period of study and learning, my perception of the phrase “you manage what you measure” was changed dramatically, and that change was not salted but poured into Finance Fund.

SPNM (pronounced: “Speenem”) took it up a notch. It included
people from 20 countries in addition to the US representing world class
organizations at the cutting edge of nonprofit management including Greenpeace,
Special Olympics, Big Brothers Big Sisters, YMCA, Boy Scouts of America,
Habitat for Humanity, Goodwill, United Way, and countless others. My living group included
representatives from nonprofits in Singapore, Australia, Canada, California,
Florida and Pennsylvania.

The HBS instruction model is one of discovery
rather than impartation; and boy, did we discover. From 7:30 AM to 10:00 PM we
grappled with finding the lessons and truths by examining case studies of
various nonprofit organizations from around the world. At the end of the week, ideas
were stacked like cordwood in my head and will slowly begin to pour into
Finance Fund. Upon returning, with eyes forward and tail dragging, I have confirmed
the “Harvard speak” declaration of SPNM and my translation

Our theme for 2010 was “Plan. Build. Succeed.”—and what an appropriate theme! Finance Fund created amazing opportunities for local Ohio communities in 2010.

The evening also honored David Gibson of PNC Financial Services and Medina Creative Housing with the 2010 Community Champion Award. This award is given to those who exhibit extraordinary service to their community. The work that has been accomplished by David Gibson and those at Medina Creative Housing has impacted hundreds of Ohioan’s lives. Distressed neighborhoods have been revitalized, unemployed individuals have been given jobs and low-income communities have been allocated resources to improve the quality of life.

Some of the projects that were highlighted throughout the evening were:

The Freeport Press – We connected Freeport Press to $6 million in a New Markets Tax Credit Loan, which will help sustain the nationally-recognized commercial printing company’s growth and provide additional opportunities for employment to the residents of Harrison County. The company is currently the largest employer in Harrison County and has seen 190 jobs created and retained with Finance Fund’s help.

Family Services of Middletown – With funds from local private sources, numerous in-kind services, and a Finance Fund Economic Development Grant, we helped Family Services of Middletown purchase a 12,700 sq. ft warehouse from which they can provide quality of life services to the area’s low and moderate income houses.

St. Lawrence O’Toole Gardens – We partnered with the developers at St. Lawrence O’Toole Gardens by providing $2.7 million in New Markets Tax Credits funding. These funds enabled the developers to purchase and renovate a facility that now offers 21,700 sq. ft of living space with appropriate services and amenities for the elderly residents of Lawrence County and the tri-state geographical area. This project also created 30 full-time jobs.

2010 was an incredibly successful year for community revitalization and Finance Fund is continuing to build a better Ohio in 2011 and years to come.

To view photos from the 22^nd Annual Reception click here.

On May 27, in Jackson, Ohio, my staff and I ventured to picturesque Jackson, Ohio, located in the Appalachian foothills, to celebrate the economic development success of another fruitful partnership—Ohio Basic Minerals.

Patrick McDonald, Ohio Basic Minerals CEO, and Jeff Schrader, founder of the original Schrader and Sons Sand and Gravel, spoke to the crowd of local and state dignitaries, Ohio Basic Minerals employees and business partners. Mr. Schrader cut the ribbon to symbolize the grand opening of the newly revitalized and renovated facility, funded by more than $2.45 million from our Finance Fund Capital Corporation (FCAP) and New Markets Tax Credits (NMTC). The event made a splash in the media—read more about Ohio Basic Minerals’ success and exciting new developments

Columbus Dispatch
May 24, 2010
Minerals plant expansion to lead to 30 new jobs

Jackson County Times-Journal
May 25, 2010
Ohio Basic Minerals celebrates expansion

Columbus Business First
May 28, 2010
Finance Fund helps sand, gravel maker expand in southeast Ohio

Jackson County Times-Journal
May 28, 2010
OBM celebrates plant expansion

According to the New Markets Tax Credit Coalition,  last week, the House and Senate were working on a tax extender agreement that may also include certain small business tax and infrastructure provisions.

Both Chambers have passed H.R. 4213, the Tax Extenders Act of 2009, which both include $5 billion in Credit authority for New Markets in 2010, and other individual and business tax provisions. In addition, the House recently passed the Small Business and Infrastructure Jobs Tax Act of 2010 (H.R. 4849) which included Alternative Minimum Tax (AMT) relief for NMTC investors on Qualified Equity Investments (QEIs) made from March 15, 2010 through January 1, 2012. This bill also included an extension of Recovery Act terms for Build America Bonds through 2013 (estimated to cost $7.5 Billion) and exemptions from AMT for interest earned on tax-exempt and other private activity bonds.

According to the NMTC Coalition, last week the House began working on an extender package for HR 4213, which contains NMTC extension and potential provisions included in the HR 4849, including Build America Bond provisions and AMT relief for New Markets. “One of the reasons for this piecemeal approach is that some of these provisions (although not NMTC) are controversial and unlikely to win approval in the Senate Finance Committee.”

We look forward to the outcomes of these votes in hopes that NMTC extensions are granted to sustain and strengthen this vital program that has provided important development resources to numerous Ohio businesses and neighborhoods. For more information, visit www.NewMarketsTaxCreditCoalition.org.

1. Funding authority to catalyze high levels of private investment in distressed communities. The Administration proposes to authorize NMTC at $5 billion in 2010 and 2011.
2. Improving overall competitiveness, attractiveness and effectiveness of the NMTC.
   1. Allowing Alternative Minimum Tax (AMT) taxpayers to claim NMTC.
   2. Review passive activity rules, which is a rule that limits the use of losses and credits for business in which a taxpayer does not materially participate.
   3. Qualification of certain types of investments for the credit, which seeks to clarify what types of loans constitute a qualified investment.
   4. Improvement of NMTC rules to spur additional investment in small business.
      1. Re-examining “substantially all” requirements, which requires an awardee (CDE) to have a specific portion of their funds invested at all times.
      2. Supporting greater investment in institutions that invest in small businesses by supporting new rules to promote more investment in Community Development Financial Institutions (CDFIs).

In addition to the “formal” proclamation of the press release, on the conference call Treasury officials made concerted effort to point out that NMTC has Secretary Geithner’s support and is a high priority for the Administration. Bob Rapoza, representing the NMTC Coalition, expressed the industries appreciation that Treasury is moving aggressively on these issues that will strengthen the program.

It’s good to hear good news once in a while.

PRESS RELEASE and FACT SHEET:

http://treas.gov/press/releases/reports/nmtc%20fact%20sheet.pdf

Mark Pinsky, President & CEO of Opportunity Finance Network, the nation’s CDFI network, hailed this move as a step in the right direction, but stressed that CDFI loan funds should share in this money, too:
Community development banks and credit unions deliver capital and services where other financial institutions don’t. This program is a capital lever that can lift up thousands of businesses that need credit to thrive. The CDFIs that participate will make capital flow where it’s not flowing today. Last October, the President expressed a desire to support non-depository as well as depository CDFIs. The next step is clear: extend support to CDFI loan funds and venture funds.

At Finance Fund, we echo this position and advocate for a similar program for non-regulated CDFI loan funds. Why? Because Finance Fund is a certified CDFI, which provides us with access to financial and technical award assistance from the federal CDFI Fund. Since its inception in 1994, assistance has totaled more than $500 million for community development. As a CDFI, we’re recognized as a financial organization with a primary mission of promoting community development in under-served communities in the United States, through credit, capital, and financial services.

CDFIs are a vital way that under-served communities achieve economic development and neighborhood revitalization. And considering the recessionary climate we’re in today, now is the time to bolster business and economic development by providing CDFIs (like Finance Fund) with the resources to leverage more capital to resurrect strong businesses and communities. This ruling is positive, but CDFIs need the financial covering of T.A.R.P. funds, too.

It was a busy week for our government leaders. President Obama made a stop here in the Buckeye State at the Lorain County Community College (LCCC) to talk jobs and the economy; Gov. Strickland delivered the State of the State address highlighting more of the same, and finally, Obama outlined strategies for healthcare, clean energy and – you guessed it – jobs, jobs, jobs.

Clearly our country and our state are in a time of economic hardship. We have an unemployment rate hovering at 10% – give or take – and large and small businesses alike are “trimming the fat,” so to speak, by laying off workers and stretching their current employees thin to cover business demands.

So what can a state and a nation that’s been stuck under the dark cloud of a dismal economy do? Just as Gov. Strickland said, we must believe in Ohio. Finance Fund continues to believe in our great state. We’re doing all we can to be a bright spot in the doom and gloom of the financial crisis.

Finance Fund is an organization that’s been making strides for Ohio development and job creation since 1987 – with no “red” or “blue” strings attached. In fact, we’ve leveraged more than $759 million to Ohio small businesses, nonprofits and Head Start programs, which has created thousands of jobs and benefitted the lives of countless Ohioans. Here are some vital stats:

- FF has granted more than 2,457 awards to countless community-based organizations
- FF has enabled access to more than 15,312 units of affordable housing for low-income people;
- More than 8,991 full-time jobs
- Over 3,033 early care and education spaces (classrooms) for 69,377 children

For 23 years, we’ve identified needs and put our money where our mouth is:

- We supported the Heritage Marketplace/Save-a-Lot grocery store revitalization, with a $1 million New Markets Loan, resulting in 18,900 square feet of redeveloped space, 46 full- and part-time jobs, and access to affordable groceries for 25,000 people.

- Additionally, Finance Fund loaned Ohio Basic Minerals $2.45 million for a site renovation of the manufacturing plant. Thirty-five renovation jobs were created, seven in-house jobs were maintained and 30+ jobs will be added by 2012.

We truly believe that in order to grow and cultivate a strong economy and business climate, we must believe in our businesses and provide them with essential resources and guidance to flourish.

Our outlook is strong – we’ve got more funding available to eligible businesses and nonprofits this year, and we’re enthused to begin lending in order to create more jobs and stimulate economic and community development. We have more than $75 million in loan funds and nearly $3 million in grants and linked deposits to place into Ohio’s distressed communities in the next 12 months. Obama talks change; Strickland keeps believing and both plan for more small business stimulus programs. But Finance Fund continues to “make action happen” by lending to businesses, creating jobs and fostering revitalization.

This round of New Markets Tax Credit funding enables us to continue to invest in projects that support Ohio’s distressed communities. These projects help stimulate local economies through capital investment, job creation, and community development. You can read more about some of those projects here and here.

Join me in congratulating our team that has spent endless days and nights working on our NMTC application. Kudos to all of them in this successful effort that will benefit all Ohioans.

James R. Klein is a firm believer that every CEO needs a “Radar O’Reilly,” just like the one Col. Potter had on the old TV series, “M*A*S*H.” Radar was always there to deflect some of the less important obligations to allow his boss to focus on what truly mattered at that moment, says the CEO of Finance Fund, a 24-employee nonprofit financial services firm.

“It’s somebody who manages your day-to-day schedule and becomes the triage that moves some of those pieces of minutiae somewhere else to a part of the system that wants to deal with it,” Klein says.

When you have that person in place, you can focus on the business and on keeping everyone in step with what it is you do best.

Smart Business spoke with Klein about how to keep your company aligned with its vision.

Q. What is the biggest hurdle to staying on track with your vision?

The main job of a leader is to be able to have a broader view of what is happening in your corporation. The complexity of this whole thing can be brought down to simple principles: Remember who you are. Know what you’re all about and what you’re trying to do and trying to accomplish. In organizational management, that’s called question zero. It’s the question you ask before you do anything else. You need to ask yourself that periodically, maybe like every morning.

Then you need to figure out what your role is. Have a good idea of who is working with you. Who is on your staff? What are their skills? What is their thought process like? You need to be able to have people you trust and give them specific tasks that you don’t have to micromanage.

What I mean by trust is, you need to be able to trust that what they are telling you is the truth. You don’t want people that are going to tell you what you want to hear. You want them to be able to tell you what the reality is whether you like it or not. You have to establish an environment that fosters that kind of reality.

If you don’t, you head off on a path that’s not real and you’ll find yourself in trouble.

Q. How do you engage these people in your vision?

Create an environment that entices employees to act on their own. If you’re a leader type that needs to be in on every decision, you create an environment that tests the edges of patience for everyone. The corporation becomes inflexible.

Have a number of different teams that have team leaders that have the job of directing thought and activity around certain parameters that you establish. Then you drive yourself to the next step.

Supervisors are encouraged to do things that attempt to maintain the entrepreneurial character of every position. We do that by just talking about it a lot and by looking for people who come with definite skill sets who are able to handle work tasking of particular positions.

But we also want people who have a broader view. They understand what the mission of the organization is or they are willing to listen and learn and get on board.

You can tell when an employee has a role that is changing from a job to a career. It seems as though their passion blooms. You can just begin to see how the passion for the mission begins to impact how they do their job.

Q. How do you ensure that your people really do hear you?

Those leaders that I have observed that are very good at it work hard at it. They establish relationships. They develop a reputation of knowing what they are talking about and being truthful and caring with their staff.

They are willing to concede that the staff is part of the whole mission you are presenting. They are not just an afterthought, but what they are is an essential piece of what you do. Leaders make them feel as though they do an important thing, whether they are putting labels on envelopes or they are saving lives, they all feel part of the whole.

What makes one leader go that way or one leader go a different direction? I think it’s a mix of personality and intelligence and really being able to be brutally honest with yourself.

I’ll tell you the honest truth. I’ve done some pretty stupid things in my time as a leader. There are some things I just wish I hadn’t done. You need to be brutally honest with yourself, admit those mistakes, learn from them and put your face to the wind again.

Q. What’s the secret to being a good communicator?

There is a distinct tendency to be insulated from what’s actually happening so the vision gets tied up in me and everybody else doesn’t get to hear about it.

I try to write every week into a blog that talks about where we are and what we are doing and how we’re thinking about things. That’s connected to everybody. It’s public, and we urge our staff to look at that. I also do writings that move to the staff about things that are coming up, ways we operate as a corporation, different strategies we would like to pursue.

I would like to have an environment that is free and open and trusting, but the environment becomes what it is. I have to put trust in certain leaders within my organization to move this message.

How to reach: Finance Fund, (614) 221-1114 or www.financefund.org