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

This is exactly what I thought when I read Mark Ferenchik’s piece in the Columbus Dispatch last Sunday, entitled “Retrofit city’s ‘inner-ring’ areas, planner says.” It points to Columbus’ struggle to redevelop inner ring neighborhoods or newer neighborhoods that are in decline. The article cites June Williamson who is scheduled to speak at the Mid-Ohio Regional Planning Commission’s Summit on Sustainability and the Environment at COSI Columbus. As Ferenchik mentions, “Williamson is co-author of the book Retrofitting Suburbia: Urban Design Solutions for Redesigning Suburbs, which discusses how some communities are redeveloping office parks, malls and housing subdivisions into vital centers for housing, stores, offices and mass transit.” It is an interesting article that provides a glimmer of hope for the renewal of urban communities.

Columbus, along with many other major American cities, has a tremendous opportunity to be a leader moving back to the concepts that made some of our declining neighborhoods vital and vibrant decades ago. The idea of a community made up of villages with access to services, shops, and entertainment is a model that went out of vogue in favor of commercial centers surrounded by high density housing. The idea of moving back to urban design that facilitates real neighborhoods is exciting. Ms. Williamson cites Lakewood, a Denver suburb, which demolished a distressed shopping mall replacing it with a village center, homes, shops and restaurants. In the winter the plaza is turned into a skating rink.

Architects have adapted this design for upscale suburban develops with recreation and community meeting space. The village design is well suited to the renewal of inner city neighborhoods creating opportunity for people to actually meet and know their neighbors. This type of interaction creates social constructs that play on the basic concept that some things are just the way they should be and others need help. Knowing your neighbor is different than just knowing who lives next door. It is my opinion that his is our next great urban challenge. “It is the proper thing to do.”

The Competitive Imperative of Learning (Harvard Business Review July-August 2008), by Amy C. Edmondson

Most executives believe that relentless execution – the efficient, timely, consistent production and delivery of goods or services – is the surefire path to customer satisfaction and financial results. Managers who let up on execution even briefly, the assumption goes, do so at their peril.

                In fact, even flawless execution cannot guarantee enduring success in the knowledge economy. The influx of new knowledge in most fields makes it easy to fall behind.  Look at General Motors which was the largest most profitable company in the world in the 1970. GM remained wedded to a well-developed competency in centralized control and high-volume execution. They have steadily lost ground for decades and are now counted in the ranks of high profile bankruptcies.

                Edmondson’s research identifies a different approach to execution, what she calls “Execution-as-learning ”. The approach maintains that a focus on getting things done, and done right, crowds out the experimentation and reflection vital to sustainable success. By continuing to think about execution as efficiency, which she refers to as old fashioned and narrow, companies fall into predictable self sabotaging traps.

1.       Critical information and ideas fail to rise to the top

2.       People don’t have enough time to learn

3.       Unhealthy internal competition arises

4.       Companies think they can do no wrong

In addition the environment must be made safe. Before an execution-as-learning can occur organizations must foster psychological safety. This means ensuring that no one is penalized if they ask for help or admit a mistake. This safety is not done at the expense of accountability and Edmondson presents a safety/accountability matrix which suggests that effective organizations achieve high levels of both.

        The goal of the approach is to find out what works and what doesn’t; employees must absorb new knowledge while executing, often sacrificing short term efficiency to gain insight into and respond to novel problems. The author reveals four steps to make this happen.

1.       Provide process guidelines

2.       Provide tools that enable employees to collaborate in real time

3.       Collect process data

4.       Institutionalize disciplined reflection

The article presents a valid and viable alternative that strikes a median between hierarchy and self guided teams. Fostering an atmosphere in which trust and respect thrive, and flexibility and innovation flourish, pays off in most settings, even the most deadline driven. When people know their ideas are welcome, they will offer innovative ways to lower costs and improve quality, thus laying a more solid foundation for their organization’s success.

You can read the full article here.

On the radio show hosted by former Sen. Fred Thompson, New York lieutenant governor Betsy McCaughey stated that the House’s proposed health care bill contained a provision that would institute mandatory counseling sessions telling seniors how “to do what’s in society’s best interest…and cut your life short.” Citing page 425 of the bill, McCaughey claimed that “the Congress would make it mandatory … that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner, how to decline nutrition, how to decline being hydrated, how to go into hospice care … all to do what’s in society’s best interest … and cut your life short.”

Here’s what the bill says, “An explanation by the practitioner of the continuum of end-of-life services and supports available, including palliative care and hospice, and benefits for such services and supports that are available under this title.” The accepted definition of end-of-life planning means thinking ahead about the care you would like to receive at the end of your life – which may include the choice to reject extraordinary measures of life support, or the choice to embrace them.  The section would require Medicare to pay for, not mandate, some end-of-life planning counseling sessions with a health care practitioner once every 5 years. It is clear that McCaughey’s distorted interpretation of the content of page 425 was offered not to stimulate debate but to frame an atmosphere of fear and mistrust.

Several television ads sponsored by Patients United Now claim that Canadian citizens survived serious illness only by leaving the country to get treatment in the U.S. because of the length of their wait for service in the Canadian health care system, claiming “Washington wants to bring Canadian-style health care to the U.S.” The reality is that no one is advocating for a government run health care system. The president and the leaders of both parties resound with the words of Sen. Max Baucus, Chair of Finance Committee, “single-payer (government run health care) is not going to get even to first base.” Yet the ads continue for what purpose? Not to stimulate debate but to frame an atmosphere of fear and mistrust.

There was a time in this country that I can remember when someone or some group publically making a misstatement or an outright lie, the journalistic community would stand up on their hind legs and demand accountability, and there was an American public that had not abdicated their role in the republic and given place to apathy believing everything we are fed. Naked again.