New leader of rural Initiative Foundation has small-town roots

Matt Varilek remembers the first time he realized his family was struggling to make ends meet.

Free and reduced lunch tickets at his elementary school in rural South Dakota were a different color than the full-priced ones, and Varilek was holding the ticket used by the poor kids.

"It was a source of embarrassment in those days. I recalled telling my mom, 'I know what this means. I need you to buy the regular priced one,' " Varilek said.

Varilek, the new president and CEO of the Little Falls-based Initiative Foundation, said he's now grateful for those programs, which helped him and other small-town kids succeed. He said he won't forget that childhood view from the lunch line as he leads the foundation focused on rural economic and community development.

"Those helping hands made it possible to do something that otherwise would have been closed off to me," said Varilek, who relied on scholarships and loans to earn a bachelor's degree from Carleton College and two masters degrees.

Before moving to Minnesota in December, Varilek was chief operating officer at the U.S. Small Business Administration, a position appointed by President Obama. Varilek also worked as an economic development director for two U.S. senators from South Dakota. He ran as a Democrat for South Dakota's only congressional seat in 2012, losing to the incumbent Republican Rep. Kristi Noem.

The foundation is nonpartisan, but Varilek said his time in politics gave him the opportunity to tour rural communities, listen to residents' concerns and advocate for resources.

Community members established the Initiative Foundation, covering 14 central Minnesota counties and the St. Cloud area, in 1986 as rural America struggled with declines in farming and mining, high unemployment and a shifting economy. It is one of six such foundations in the state that received seed money and support from the McKnight Foundation.

It serves as a gap lender helping businesses and entrepreneurs create jobs and diversify the economy. The foundation also awards grants to nonprofits and schools, runs early childhood education programs and funds and provides technical assistance for job skills training. It has $63 million in assets.

Since its inception, it has awarded $81 million in grants and loans, created 13,000 jobs and leveraged $200 million in private business investment, said retiring President Kathy Gaalswyk, who has led the foundation from the beginning and praised Varilek's hiring.

Varilek and his wife, Maggie, wanted to move back to a small town in the Midwest, preferably Minnesota, to raise their family. They have three children, including a daughter named after novelist Willa Cather, who wrote about rural life on the Great Plains.

"It's a great part of his story," Gaalswyk said. "To have someone that has rural roots and making a conscious decision to move back to raise their family is really important and directly linked to the mission of what we do."