Health, Education Needs to be Studied

December 3, 2002

By Ginny Wray - Martinsville Bulletin Staff Writer

The foundation created by the sale of Memorial Hospital of Martinsville and Henry County is planning to assess the area's health and education needs to determine where to begin investing some of its $150 million by the middle of next year.

"We don't want to do this by the board saying 'let's spend money here,'" said Michael P. Haley, president of the foundation board.

The group, which named itself the Harvest Foundation after the hospital's sale last spring, has earmarked $250,000 for the studies.

The health assessment will be done by Virginia Commonwealth University, which conducts the Behavioral Risk Factor Surveillance for the state. Essentially, the health assessment will be a combination of information already available about Henry County and Martinsville with the results of 2,000 additional telephone surveys, according to Allyson K. Rothrock, interim executive director of the foundation.

A summary of the health needs of the community then will be compiled.

For instance, Rothrock said information on the number of people with diabetes in the area will be combined with survey questions on whether people have diabetes as a result of overeating, with the summary detailing behaviors that cause the disease.

Using that information, "we'll focus on areas of high risk," Haley said.

Rothrock said that health assessment should be done by early summer.

The foundation hopes to involve area school superintendents and teachers in the educational assessment, which should be done by late spring, Rothrock said. The foundation has hired Dr. Kenneth Tewel of Boca Raton, Fla., to oversee the process and compile a summary for the board.

A welfare assessment also is being discussed but has not been finalized, she and Haley said.

After the needs are assessed, the foundation will begin considering projects or suggest initiatives for funding by the third quarter of next year, Haley said.

Information compiled in the assessments and the needs they determine will be available to the public, he said.

The foundation is not looking for what Haley called quick fixes for the area's economic problems, such as fully funding the United Way campaign.

Rather, he said "a long-term cultural change" is needed to make Henry County and Martinsville "the residence of choice," as stated in the foundation's vision statement.

Its mission statement is: "The Harvest Foundation researches and responsibly invests in programs and initiatives to address local challenges in health, education and welfare."

Haley said many people have said that the area needs good jobs but the foundation probably would not directly fund an economic development initiative.

"Throwing bodies at low-paying jobs is not what the foundation thinks it's all about," he said. "Well-paying jobs will come when we have a skilled work force and quality of life."

The Internal Revenue Service gives non-profit foundations three years to start giving grants. Then, they must spend 5 percent of the prior year's assets, or principal, to keep their tax breaks, Haley said. That 5 percent can include operating expenses, he added.

That means the foundation would have about $7.5 million to spend a year, he said. The foundation will work with area groups and agencies to help them through the application process when it is ready, he said, adding that the board's budget and grants committee will recommend projects to the 13-member board, which must approve each one.

The board has not yet determined how it will fund projects, Haley said.

The board has developed a draft statement that it will fund projects that help the foundation achieve its mission, fit its focus area and represent a comprehensive approach to solving complex problems; are an optimistic and aggressive approach to current and emerging community challenges; meet an identified community need; involve current research and successful models; do not duplicate or supplant an existing program; are innovative; serve as a foundation partner and catalyst for change; and are accountable, affordable and sustainable.

The foundation also plans to hire an investment consultant and develop a risk strategy for investing the $150 million sale proceeds. As with projects to be funded, the board's investment committee will make recommendations to the full board, which has the final authority on investments.

For now, two-thirds of the proceeds are in "very secure, small risk" money market funds paying 2 percent and one-third is in mutual funds, which traditionally yield 7 to 8 percent, Haley said.

"If we can invest $7 million to $8 million (in the community) year after year for 50 years, $400 million can change the entire landscape of the community. It will become a residence of choice," Haley added.

The foundation also is in the process of developing an operating budget, and it has hired an executive search company to recruit a director.

Rothrock said the board hopes to interview candidates in January or February, and Haley said a director may be hired by spring. No salary has been set; that will be determined when the best applicant is found, he added.

Local residents have applied for the position, Haley said. Rothrock repeated that she is not one of them.

The board is aware that some residents are wondering why it is taking so long to see the hospital proceeds spent in the community, Haley said, adding that the national average is 13 months for a non-profit foundation to begin awarding grants.
The slow pace also is frustrating for Haley.

"I have a bias for moving quicker than the process allows," he said, adding that some of the pace is dictated by government regulations. But, he added, "the board is analyzing each step to make sure" it is preparing for long-term benefits to the community.

Haley, the former president of American of Martinsville and current president of MW Manufacturing in Rocky Mount, describes himself as passionate about the work of the foundation and the future of the area.

"I grew up on Main Street in Stanleytown and I understand the work ethic and the people here. This area has been good to me. It can be the same for everybody," he said.

His vision for the area, he added, is "the best test scores in Virginia, the best qualified work force in Virginia and the best quality of life for all its citizens ... that is the envy of neighboring communities."


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