By Alison Spencer, WFMN Strategic Communications Intern
For 35 years, the Women’s Foundation of Minnesota (WFMN) has understood how it takes innovation on all levels to drive impact. To scale and maximize impact, in 2011 WFMN converted a portion of its endowment from static capital to an active tool to drive gender equity. Through Program Related Investments (PRIs), WFMN invests in organizations that help women-owned businesses access funds otherwise unavailable. One of WFMN’s three PRIs is with the Entrepreneur Fund and one beneficiary is entrepreneur Rebecca Spengler in Ely, Minn.
After moving back to her hometown from South Africa, in 2007 Rebecca opened her first business, A Laundry Room, Inc., in downtown Ely. Over the years, Rebecca has received three loans from WFMN’s PRI at the Entrepreneur Fund that enabled her laundromat to grow.
With the first loans, Spengler purchased new equipment to help the business run more efficiently and a truck to expand services to include commercial laundry. Finally, she was able to purchase the building in which her business is located using her capital to make a long-term growth investment. The loans Rebecca received allowed her to increase the revenue of her laundromat by reaching more customers. With the help of the Entrepreneur Fund, Rebecca was able to establish a financial plan for the future of her business, while creating new jobs and a thriving business in her community.
How PRIs Work
Through the Program Related Investments, WFMN invests additional capital into communities, leveraging its endowment for greater community impact. WFMN established PRIs in 2011, loaning 5% of its endowment to community organizations that lend the funds to individuals and nonprofits whose work aligns with our mission. Over the past eight years, PRIs have leveraged nearly $4 million in support to organizations and women-owned businesses.
The Foundation provides PRIs to three organizations, including the Entrepreneur Fund, which has worked to stimulate growth and create economic stability in northeastern Minnesota and northwestern Wisconsin for 29 years. Believing that investment in entrepreneurship can help create the economic diversity necessary to sustain vibrant communities, the Entrepreneur Fund has lent more than $41 million to small businesses within 17 counties. Their two-pronged approach, offering both upfront capital and the training needed to develop necessary skills, has created businesses whose revenue growth and employment creation rates far outpace the region’s.
In 2017, 60% of the Entrepreneur Fund’s clients have at least one female business owner, and there is still a pressing need to support women-led businesses. As seen in the 2018 Status of Women & Girls in Minnesota, women own 32% of businesses and these companies generate just 4% of the state’s revenue and employ 8% of paid employees. What’s more, while Minnesota women of color and American Indian women are starting more businesses, their average annual revenues remain unequal. Recognizing this need, the PRI at the Entrepreneur Fund goes directly toward its Women’s Business Alliance, which works to develop women-led businesses through entrepreneurship.
Creating Community and Changing the Narrative
Women business owners need more than capital. Through cohorts, workshops, and a lecture series provided through the Women’s Business Alliance, women meet others with shared experiences to develop not only crucial skills but a new sense of business and of themselves. Meg Thoreson, Director of Strategic Services at the Entrepreneur Fund, said that the value of the coaching and network-building can’t be underestimated, particularly in rural communities where networks and resources may be scarce.
“Working with a coach has been absolutely instrumental in helping me think of myself as a leader,” Emily Vikre, co-owner of Vikre Distillery.
“It has helped me understand my most effective leadership style, [which] has been especially important to me as a woman business owner since the model I had in my head, and what I had seen more often, was the more alpha-male type of leadership.”
Meg Thoreson sees her work as creating entrepreneurial community across the region they serve. “Entrepreneurship is lonely,” she said. And through its coaching and programming, the Women’s Business Alliance establishes networks that foster sustainable businesses that bring both revenue and employment to their communities.
Beyond simply strengthening local economies, the funds improve outcomes for women’s leadership and economic opportunity. By “growing the network of women who [can] support each other,” the program “helps change the narrative for women business owners in northern Minnesota,” Thoreson said.
Since the founding of the Women’s Foundation of Minnesota 35 years ago, generous donors funded the capital —including endowed donor advised funds—that grew the endowment, which funds PRIs. Your investment in creating a Minnesota of opportunity, safety, and leadership for all Minnesotans expands the leadership of women and organizations to create positive impacts on economies throughout Minnesota. PRIs are just one extension through which donors are funding change in our state.