Strategies

Program-Related Investments

To pursue its goals, The Dakota Foundation often makes program-related investments (PRIs), a type of low-interest financing.

PRIs are most commonly made as below-market rate loans or, occasionally, an equity interest, and require that the organization receiving the PRI generate sufficient cash flow ultimately to repay the loan or provide a return on the equity. Our geographic focus is primarily on activities in North Dakota, New Mexico, and Colorado. Most of our PRIs do not exceed $100,000.

Our foundation seeks to make PRIs to expand the range and impact of recipients' programs. PRIs usually help the recipient attract other sources of capital, thereby reducing its dependence on grant funds. As the PRIs are repaid, the funds become available for redistribution to other philanthropic projects by our foundation. Thus, more of the foundation's resources can be recycled to meet other funding needs.

The terms of a program-related investment from the Dakota Foundation are determined on a case-by-case basis. Most past and current investments have a term of five to seven years with a below-market rate of interest on the unpaid balance.

Bart
          Holaday

From Essentials, the quarterly newsletter of the Association of Small Foundations:

PRIs are loans or other investments made by a foundation to support its charitable purpose. PRIs count toward a foundation’s distribution requirement as long as they meet a few basic requirements, and the best part is that the funds generally are returned to the foundation to be used for other PRIs or grants.

Criteria for evaluating proposals for PRIs include the project's potential impact, its financial feasibility and the extent to which it is related to our foundation's mission. In every case the foundation seeks to fund programs that enhance human self-sufficiency and that can become long-term self-sustaining entities.

We maintain an investment focus in all we undertake in that we seek a financial return AND a long-term, measurable social return. We want to be involved with committed and ethical people who seek entrepreneurial and creative ways to solve social problems.

Bart Holaday

PRIs count toward a foundation’s distribution requirement as long as they meet the following criteria:

Serve a charitable purpose
open A PRIs primary function must be to further the foundation’s   charitable purpose.

Income or appreciation of property is not a significant purpose.
An investor solely interested in profit would not make an investment on the same terms.

Not used directly or indirectly to lobby for political campaign purposes.
  Like grants, however, PRIs may fund voter registration, voter education and advocacy within legal guidelines.

Graduate Education and The Alberta B. and Sidney E. Holaday Scholarship

Our Oxford Connection

In 2003 the Dakota Foundation established and endowed a scholarship at the U.S. Air Force Academy, which annually sends a top Academy graduate to Exeter College at England’s Oxford University for two years of graduate study.
The scholarship each year enables a top-ranking cadet who competes for, but does not receive, a Rhodes Scholarship, to do his or her graduate work at Oxford.
To date, eleven outstanding young men and women have benefited from the Alberta Bart Holaday Scholarship, which is named in honor of Bart Holaday’s mother, a Colorado native and longtime resident of Jamestown, N.D. Holaday, a Rhodes Scholar himself from 1965-68, credits his mother, a former English teacher, with impressing upon him as a young man, “that education and life are synonymous.”

Alberta Bart Holaday

After Alberta Bart Holaday's death on August 26, 2012, at the age of 95 ½, the Dakota Foundation and her children amended the agreement for the Sidney E. Holaday Scholarship at the University of Jamestown (North Dakota), which was established in memory of Bart Holaday’s father, to rename it to the Sidney Earl and Alberta Frances (Bart) Holaday Scholarship. In a like manner, on June 17, 2013, the agreement with Exeter College was amended to rename the Alberta Bart Holaday Scholarship to the Alberta B. and Sidney E. Holaday Scholarship. Thus, both scholarships now honor both parents.

“My wife Lynn and I believe each new experience in life increases one’s knowledge of him- or herself, of fellow citizens and of the world.,” Holaday said.

Following his graduation from the Air Force Academy, Holaday spent three years at Exeter College, earning a master’s degree in philosophy, politics and economics. At the Academy he was an economics major.

In establishing the scholarship, Holaday was inspired by the vision of the late Cecil Rhodes who sought to reward young men and women “who demonstrate literary and scholastic attainments, energy to use one’s talents to the full.”

Rhodes believed that these talented individuals also are exemplified by “a fondness for and success in sports, a devotion to duty, sympathy for and protection of the weak, kindliness, unselfishness and fellowship, moral force of character and instincts to lead and take an interest in one’s fellow beings.”

Holaday views his own Oxford experience as having provided “an invaluable global perspective” thanks to the university’s location, its international student body and its stellar faculty. “I believe such global understanding is crucial for future Air Force leaders,” he said.

Exeter College, which celebrates its 700th anniversary in 2014, enthusiastically welcomes the young scholars who have come its way via the Holaday Scholarship and who have entered fully into the life of the college. They are as follows:


Young Scholars

2003 – Justin C. Bronder

2004 – Katie Dildy Goossen

2005 – Andrew J. Sellers

2006 – Michael A. Cole

2007 – Erin A. Finger

2008 – Ian K. Helms

2009 – Roni Yadlin

2010 – Bradford D. Waldie

2011 – Jenny A. Bandi

2012 – John W. Nickerson

2013 – Zachary S. Esau

Articles

Soft Landing:  From the U.S. Air Force to Exeter (Erin Finger reflects on her time at Exeter so far)

The Dakota Venture Group/UND Center for Innovation

"When properly unleashed, the entrepreneurial spirit has proven to be the greatest force for generating wealth that the world has ever known. Entrepreneurship is the great engine of job creation, innovation, economic growth, and the rise of low-income communities out of poverty."

--Robert Townsend
University of Chicago Charles E. Merrian
Professor of Economics

The Dakota Foundation supports initiatives with the University of North Dakota Center for Innovation Foundation to provide educational opportunities for UND students interested in angel and venture capital investments in entrepreneur ventures. The Valley Angel Investor Internship and the Dakota Venture Group (DVG) are funded through two grants to the Center for Innovation Foundation at UND.

The Dakota Venture Group is unusual among college-based investment funds because students gain real world investment experience though researching and investing in pioneering startups in the region to build a portfolio rather than publicly held companies. There are only three other universities in the country known to have student-run venture funds: University of Utah, University of Michigan and Cornell. "This places UND Entrepreneur program in an unique and special position among the nation's entrepreneur programs," says Bruce Gjovig, director of the Center for Innovation.


Gjovig noted, "College students are immersed in technology devices and products and have a knack for uncovering emerging innovation which can be an investment opportunity. This will be an opportunity for entrepreneurial college students to search out innovative technologies and consumer trends, both as an entrepreneur and as an investor."

The DVG is a student-managed venture fund to invest in student ventures as well as regional growth companies. The fund is managed by four to six seniors in the entrepreneurship program or MBA students. The entrepreneurship program has 50 majors and 80 tracks (minors) across various colleges on campus, allowing for a diverse pool from which to draw. The students find, evaluate, price, structure and monitor investment deals. The fund invests in ventures created by students and recent UND graduates as well as in venture capital opportunities in the North Dakota-Minnesota region. Any returns on the investments made through the fund are put back into the fund pool to continue the venture capital fund.

The Valley Angel Investor Internship provides for the purchase of a membership in the Valley Angel Investment Fund LLC of Grand Forks, one of the 17 angel investor groups affiliated with RAIN Source Capital of St. Paul. That membership is owned by the UND Center for Innovation Foundation and the seat at the table will is held by the Dakota Foundation RAIN Maker Fellow, a UND senior or MBA student who participates in fund meetings and assists in evaluation and investment of entrepreneur ventures, learning from the investor experience and assisting angel investors with the deal process. The internship provides at least one student each year an active role and in-depth experiences in equity investment and entrepreneurial ventures working with active angel investors.

"These two investments are favorably impacting young entrepreneur-minded students in a meaningful way and are growing the next generation of entrepreneurs, angels and venture capitalists for North Dakota and the nation," said Gjovig at the Center for Innovation. "We are thrilled with the opportunity provided by the Dakota Foundation for these up-and-coming entrepreneurs. The entrepreneur program at UND has been among the top-ranked programs in the nation since 2004, and these initiatives only make our program that much stronger."

The pioneer class of DVG venture capitalists

The Center for Innovation helps entrepreneurs, innovators, researchers and students launch new technologies, products and ventures, develop business and marketing plans, access talent of universities and secure venture financing. The Center operates the Skalicky Tech Incubator and the Ina Mae Rude Entrepreneur Center, as well as coordinates the development of the University Technology Park. The tech incubator hosts 23 entrepreneur ventures employing more than 110 people. The Center was among the first technology and manufacturing outreach centers in the nation and has helped launch more than 440 new products and ventures since it was formed in 1984. The Center has won four national awards for excellence in innovation and technology entrepreneurship. The Center is a division of the UND College of Business and Public Administration.

For more information, please contact the UND Center for Innovation.


"Being an entrepreneur means thinking creatively, taking pride and ownership in your work, demonstrating perseverance, taking risks and finding solutions to difficult challenges--skills that all businesses require in today's highly competitive global economy."

--Robin Wise
Chief Executive, Junior Achievement Rocky Mountain Inc.
(The Denver Post, Aug. 31, 2008)