A Return to Rural Roots

After jobs in government and the private sector, Matt Varilek moves home to the Midwest to lead the Initiative Foundation.

By Elizabeth Foy Larsen | Photography by John Linn

Growing up in Yankton, S.D., Matt Varilek sometimes felt embarrassed that he qualified for free and reduced school lunches. “At the time, I didn’t like having a lunch ticket that was different color from the kids whose parents paid full price,” said Varilek, who started his new post as the president and chief executive officer of the Initiative Foundation in January, taking over for founding president Kathy Gaalswyk.

Today, Varilek has a different take on that formative experience. As he sees it, that helping hand, and many others along the way, enabled an ambitious kid with modest Midwestern roots to reach his potential. In his view, many doors would have remained closed to him—from an undergraduate education at Carleton College in Northfield, made possible by Pell Grants and Stafford Loans, to graduate school at Cambridge University in England, where he was the recipient of a scholarship from The Bill and Melinda Gates Foundation, and at the University of Glasgow Scotland, where he was supported by a scholarship from Rotary International.

Those opportunities have now come full circle. Varilek comes to the Initiative Foundation following a stint as the chief operating officer for the U.S. Small Business Administration (SBA) in Washington, D.C. He sees his new role at the Foundation as a fit for the next stage in his career, and for his family. He and his wife, Maggie—also a South Dakota native—want to raise their three young children in the kind of close-knit place that gave them their starts.

“There is something about growing up in a place where you run into people you know and feel like there’s a real sense of community,” said Varilek. “We’re so pleased that our kids are experiencing those things here in Central Minnesota.”

We talked to Varilek about what drew him to the Initiative Foundation and where he sees future opportunities for the organization and the region.

You bring a fresh set of eyes to your role at the Initiative Foundation. What do you think are the region’s assets?
Varilek: This region is growing, both in terms of job creation and population—we are fortunate that people are moving to Central Minnesota. That means we have some very strong communities that are producing prosperous, innovative companies as well as people who are eager to give—not just financially, but also of their time and talents.

The region’s natural beauty is also an important asset. It’s common to think of economic development narrowly as a way to grow businesses and jobs. But it’s important to remember that people also want to live in places that have great cultural opportunities, parks, trails, natural beauty and other amenities. That mix makes Central Minnesota a very attractive place.

What in your opinion, are the region’s opportunities for improvement?
Varilek: Central Minnesota’s low unemployment is an indicator of economic vitality, but it also means that businesses can have a hard time finding the talent they need to achieve full potential. In addition, as the population ages, we see a great need for a new generation of leaders to fill important roles in business and the nonprofit and public sectors. Some communities are working through challenges associated with welcoming new Americans. Fortunately, these challenges also represent an opportunity, because new members of our communities can help to address the need for additional leadership and talent.

How do you see that idea being implemented?
Varilek: As with everything, progress will require partnerships and collaboration. At the Initiative Foundation, workforce development with a variety of partners has been a longtime area of focus. Our Emerging Leaders program is also a great tool by which we help to cultivate the next generation of leaders. And the new Initiators Fellowship program (see page 20) is an exciting way that we’re making a deeper investment in a group of high-caliber leaders and entrepreneurs with the potential to make enormous long-term impacts in the region.

Several of your previous professional experiences have involved small businesses. Why do you believe small businesses are so important to regions like Central Minnesota?
Varilek: The short answer is that over 90 percent of businesses are small businesses, and they generate something like two-thirds of all net new jobs. It’s also where so many innovative technologies come from. We think of America as an innovative place, and it’s doing the experimentation that larger businesses then can take to scale. These are among the reasons that the Initiative Foundation’s work providing gap financing for small businesses is so important.

How do you think your governmental experience will help you in your new role?
Varilek: In my most recent post in D.C., I had a team of 180 people and helped to provide strategic direction for the SBA as a whole. That leadership experience will be helpful as we seek to build upon the Initiative Foundation’s fantastic 30-year track record of success.

My time as the economic development director for Sen. Tim Johnson of South Dakota gave me a lot of on-the-ground exposure to key issues that are important to leaders in rural communities. I loved going from town to town, meeting with mayors, businesses, nonprofit organizations, and others. Those kinds of visits here in Central Minnesota are one of the best parts of being in my new role.

The Initiative Foundation is a 30-year old organization with a $44 million endowment. Given the sound financial health, why is it important for people to continue to invest in the work we do?
Varilek: Starting with The McKnight Foundation’s original support in 1986, and right through to the present, the Initiative Foundation’s great work has been enabled by the generosity of a diverse and growing group of donors and volunteers. Without resources, partnerships and support, our strategies amount to nothing more than good intentions. But despite all the progress already achieved, it’s more critical than ever that we continue to engage our partners, including individual donors, because the needs in our region continue to evolve and grow. We’d like to be able to help more businesses expand and more workers move into higher-skilled positions. We’d like to help more kids—especially those in poverty—come to kindergarten with the skills they’ll need to succeed. We’d like to do even more to prevent the spread of aquatic invasive species in our beautiful lakes and rivers. All these things take resources to achieve. Fortunately, the Initiative Foundation throughout its history has shown itself to be a high-impact, trustworthy steward of the resources that have been entrusted to us.

Why is a nonprofit suited to make strides in those areas?
Varilek: We’ve developed a diverse set of effective tools to achieve our mission. Though we are a nonprofit ourselves, those tools involve a great deal of partnering with diverse people and organizations. Examples include our lending programs to for-profit and nonprofit enterprises, providing training and technical assistance for communities and nonprofits, developing individuals as leaders, and providing services to Partner Funds and foundations that facilitate even more philanthropy in the region. Through that set of tools and relationships, our reach and impact are substational.