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Managing an Effective Economic Development Organization
Indiana Economic Development CourseJanuary 12, 2015
Jim Plump, CEcD, FM
Seymour-Jackson County, Indiana
www.jcidc.com
Outline
• Overview of Economic Development• Trends• Types of organizations
– Advantages/disadvantages• Role of Board members & ED practitioner/staff• Case study of JCIDC• Regionalism• Social media• The marketplace
Economic Development “101”
JOBSINCOME
HOUSING
RETAILTAXES
EDUCATION
WORKFORCE
produce
that
provid
es
the
mark
et forthat fund
whi
ch
prov
ides
that
attracts
which creates
that
generates
Economic Development Trends
Regionalism
Attraction
Return On Investment
Workforce Development
Privatization
Retention & Expansion
Benchmarking
Performance Evaluation
Benchmarking
• Need to evaluate performance– Outcomes and/or impact
• Jobs, Tax Base … And More!– JCIDC Measures “Promised Investment”
• Partnerships & Coalitions– Workforce Partnership & JCEC
• Construction & Wage Impacts
Benchmarking
• “If not for our activity, this would not have occurred”– Helps defend organization’s mission
• “We don’t invest or create jobs; we are facilitators”
Privatization is Growing Trend
• Budget cuts at all government levels is driver, but
there is a silver lining:– More flexibility in activities
– Eliminates some public regulatory obstacles:
– Hiring practices/Salary issues
Return on Investment
• How will project affect local economy?– Economic Impact Analysis
• How will financial support to ED organization
benefit the contributor?
Types of Organizations
EDOs may not fall neatly into one category – State/Local/Federal Government
– Public-Private not-for-profits
– Chambers of Commerce
– Port Authorities
– Utility companies
– Regional marketing/planning organizations
– Development/Redevelopment organizations
– Colleges/Universities
Public ED Organizations
• Established in variety of ways:
– Independent agencies
– Local government departments
– Part of one or more local departments
– Part of Mayor’s office
Advantages of Public Organization Direct access to sources of public funding
– TIF Zones and access to those funds• Through Redevelopment Commissions
– Business incentives (tax abatement)• Through City/Town Councils
– Ownership of land/Right of way– Zoning/Regulatory powers– Ability to construct and operate public facilities– Direct access to planning, zoning, public works
resources, infrastructure
Disadvantages of Public Organization
• Direct political influence• Elections can cause turnover/Inconsistent
policies• Municipal debt limitations• Restrictions on financial incentives for private
sector
Private or Public/Private Organization
• Also established in a variety of ways
– As part of Chambers of Commerce
– Community Development Corporations (CDC)
– 501(c)(3), (c)(4) or (c)(6)
501 (c)s
• (3) Absolutely prohibited from supporting political candidates,
and are subject to limits on lobbying. Gifts are tax deductible.
• (4) May lobby for legislation and participate in political campaigns
and elections, as long as its primary activity is the promotion of
social welfare. Contributions are usually not deductible as
charitable contributions for U.S. federal income tax, with a few
exceptions. Are not required to disclose their donors publicly.
• (6) Lobbying allowable and encouraged to promote particular
industry. Contributions generally not deductible, although gifts
typically can be written off as business expense.
Advantages of Private Organization
– Not directly related to political party• Get “right people” on the Board
– Organized to make decisions quickly– Serve as intermediary so private clients can
deal with government– Able to perform functions and activities in
public interest without rules and regulations of government
Disadvantages of Private Organization
– Lack power– May lack public support– Non-ED activities (i.e. Fundraising)
• If you’re raising money, you are taking time away from doing economic development
Role of ED Board
– Developing policy– Financial oversight– Resource development– Strategic planning– Community relations– Personnel issues
Does size matter?
Is there a perfect size?
Executive Committee vs. Full Board of Directors
Does the board: • Take hands-on approach?
• Burp & belch?
• Do you want to change it?– How? Organize the work, not the people; consider your role in
education of board … and yourself
Role of ED Board
Board Policies
• Audits• Conflict of Interest Statement• Confidentially Statement• Position Papers• Staff Reviews• Ethics Policy• Succession Plan
Role of ED Practitioner
• Analyst
• Catalyst
• Gap Filler
• Advocate
• Educator
• Visionary
• Facilitator
Role of ED PractitionerKey issues you must address
– What does your board expect?• Is it realistic?
– What available resources do you have?• What resources do you need?
– Is your board active and inspired?• How do you retain or develop that?
– Is there a current strategic plan?• Yes? What is your scope of work?• No? Get one done!
Role of ED Practitioner
Don’t forget about public relations– Newsletter
– Op/Ed articles for newspapers
– Radio talk shows
– Service organizations
– Attend contributor meetings
Your Personal Development
• Economic Development Institute (EDI)
• International Economic Development Council (IEDC)
• Regional ED organizations
• State ED associations
Education Opportunities
All offer training opportunities
ED Staff
• Quality of ED program/organization is contingent upon
the quality of the staff. Staff must be able to make
judgment decisions; understand laws, regulations and
procedures; be familiar with the needs of businesses,
politicians, community residents and government
employees; be good communicators; & be pro-active.
Jackson County Industrial Development Corporation … Seymour, Indiana
– Created in 1984 as non-profit 501(c)3
– Main Focus:• Business Retention & Expansion
• Business Attraction
• Workforce Development
– 4-person staff (3 full-time, 1 part-time)
– Governed by 4-member executive committee & 29 person
board
– More than 80 contributors
– Total budget for 2014 was $410,000 (Including
Workforce Partnership)
JCIDC Funding Breakdown
• 2014 Budget:• Public Support: 35%
• Private Support: 50%
• Foundation/Grants: 13%
• Other: 2%
JCIDC Contribution Levels
Board Level $5,000 & Up
Gold Level $2,000 - $4,999
Silver Level $1,000 - $1,999
Bronze Level $750 - $999
Contributor Under $750
Workforce Partnership Based on employment
JCIDC Organization Chart
Board of Directors
ExecutiveCommittee
Planning& ProgramCommittee
WorkforcePartnership
External Relations
Committee
ResourceDevelopmentCommittee
LoanCommittee
Organization ResponsibilitiesExecutive Committee
1. Personnel
2. Annual Budget
3. Oversight of Other Committees
External Relations Committee
1. Annual Reception
2. Networking Events
Planning & Program Committee
1. Strategic Plan
2. New Programs
3. Retreat
4. Oversight of Workforce Partnership
Resource Development Committee
1. Fund-raising
2. Other Financial Issues
3. Oversight of Loan Committee
JCIDC Workforce PartnershipAs a result of the strategic plan, JCIDC created the Jackson County Workforce Partnership in 1998. The goal is to bring industries, schools, local elected officials and economic development leaders together to make Jackson County employers more competitive. Also work closely with Education Coalition.
– 22 entities contribute to the Partnership– 2014 Budget $106,000– Science, Technology, Engineering, Math (STEM) education
• Coordination With County Schools, JCLC, and Post Secondary• Seamless Career Pathways• Robotics
– Career Awareness and Activities:• Social Media, Business Profiles, Manufacturing Corners• Job Shadowing, Senior Mock Interviews, CEO Panel, 21st Century
Business, Industry-To-School, Company Tours, Career Days, Dream It-Do It, Mystery Chasers, LEGO Engine Build
Measuring Results
Promised Investment
2014: $175 Million
2013: Established New High: $177.1 Million
2012: $152.1 Million
2011: $81.3 Million After Low of $22 Million ‘09
Measuring Results
Jobs
2014: 294 new jobs promised; 4,646 retained
2013: 246 new jobs promised, 3,801 retained
2012: 589 new jobs promised; 2,800 retained
2011: 117 new jobs promised; 2,200 retained
South Central Indiana ED 10-County Region
Regionalism
Why work with the “enemy?• Expands your own budget
• Companies/Consultants recognize areas more than
cities or towns
• Creates larger area for statistics and demographics
which will be “in play” anyway
Utilization of Website
• Mandatory in today’s economic development world
• Provides instant access to information• 24/7/365 • International• Real Time• Link to social media
A Word (or two) About Social & Mobile Media
• Social media uses web-based
technologies to transform and
broadcast into social media
dialogues, and allow the
creation and exchange of
user-generated content. …
Wikipedia
Social Media
• These are applications designed to connect a “community” across any web-enabled device. Social media allows interaction that can be done in real time, with some or all members of the community. Blogs, Twitter, YouTube, and Facebook are examples of social media.
• It’s social; it’s public; it’s mobile
Mobile Media
• This concept isn’t so much about the medium as it is
the device. The ability to receive a wide range of
information, and fully engage from wherever you are,
constitutes a mobile interaction. Mobile media are
formatted (sometimes in the form of a mobile app) to
allow communication to be received on today’s smart
mobile devices, including digital tablets and ipads.
A Word (or two) About Economic Downturns
What is role of ED organization?You are expected to be in the know
How can ED organization be pro-active?Retention/Expansion program
State of Indiana Trends
IEDA 2013 Wage & Benefit Survey of Economic Development Professionals
Conducted by:Indiana Economic Development Association
Annual Operating Budget
Less than $100,000
$100,000 - $150,000
$150,000 - $200,000
$200,000 - $250,000
$250,000 - $500,000
$500,000 - $750,000
$750,000 & Over
7%
12%
19%
20%
17%
11%
15%
Services Provided
Attraction
Retention
Land/Building Development
Small Business Assistance
Research
Foreign Investment
Job Training
Foreign Trade
Government Procurement
Legislative Affairs
99%
94%
75%
75%
64%
44%
43%
34%
30%
27%
Annual Base Salary
Less than $40,000
$40,000 - $50,000
$50,000 - $65,000
$65,000 - $80,000
$80,000 - $95,000
$95,000 - $115,000
$115,000 & Above
10%
9%
30%
21%
11%
12%
7%
Other:73.4% have no contract85% have a retirement plan; of those, 72% have employer contribution up to 5%
Doctorate Master's Bachelor's Post Secondary High School
4%
36%43%
14%
3%
Education / Training Levels
< 1
2-4
5-9
10-2
020
+
17%
36% 33%
9% 5%
Current Position Tenure (Years)
20+
10-2
05-
92-
5<
1
27%23%
30%
17%
3%
ED Experience (Years)
Less than 25,000
25,000 - 50,000
50,000 - 100,000
100,000 - 250,000
250,000 - 500,000
Over 500,000
25%
40%
8%
14%
7%
7%
Population of Agency's Jurisdiction
Less than 10%
10 - 25%
25 - 50%
51 - 75%
75 - 99%
100%
12%
15%
12%
25%
23%
12%
Public Funding
11-15
16-20
21-15
27%
20%
18%
LEDO Boards
# o
f B
oa
rd
Me
mb
ers
1-2
3-5
6+
50%
34%
16%
Number of Employees
Typical Indiana ED Organization
• $200-250K Budget
• 25-50K Population Jurisdiction
• Attraction & Retention
• 1-2 Employees
• 11-15 Person LEDO Board
• $50-65K Salary
• 5-9 Years Experience
• 2-4 Years in Current Position
Managing an Effective Economic Development Organization
Jim Plump, CEcD, FMJackson Co. IDC
Seymour, [email protected]
