Cover Story

Nancy Zallek – Mankato Area Foundation

Photo: Kris Kathmann

Doing Well at Doing Good

Nancy Zallek’s deep roots have helped her grow Mankato Area Foundation’s endowment and guide it’s philanthropy.

Businesses play a vital role in cultivating a good quality of life in our communities; they provide jobs, economic stability, and charitable support for initiatives that can enrich our lives. It’s that last one that is sometimes easier said, than done.

“Business owners are often so focused on running their company that they often don’t have the time or resources to dedicate to overseeing their charitable giving,” says Nancy Zallek, Director of the Mankato Area Foundation. “We have so many businesses in this area that generously support our local nonprofit organizations because of their commitment to strengthening and enhancing this community. But we’re seeing that increasing importance for companies to align themselves with initiatives that complement their values and passion.”

That’s where Zallek and the Mankato Area Foundation (MAF) can help.

“While this region is full of incredibly generous people, that’s not their business,” she continues. “It is not their responsibility to know the nonprofit community or to have a working knowledge of projects and programs that enrich our community. We can be a resource for them while helping to focus their giving to have the greatest impact in areas that are important to them.”

It’s clear when speaking to Zallek that working alongside of nonprofits every day, figuring out how to align a company’s resources with its charitable desires, is a joy for her. A passion that has catapulted the MAF from a $2 million foundation five years ago, to a $12 million one today.

“To give you an idea of why that growth from $2 million to $12 million is important,” she explains. “When we were at $2 million we were granting about $50,000 a year. The last three years we have averaged half a million and we are on pace this year to grant about $700,000. So by growing our assets we can really make a difference in the community.”

A community in which Zallek’s roots run deep.

“I am fifth generation Mankato,” Zallek reflects. “My family started Brett’s Department Stores in 1868. That’s what makes this job really fun. It’s a community my family and I care about deeply. If I can help in any way move the dial on Mankato and make it a better place to live and work and raise a family, then that’s a win for me.”

Philanthropy is defined as giving of time, talent or treasure. Zallek says all three of those happened in her household.

“I was raised in a household where giving back was just a way of life,” she says. “So I just thought that’s the way everyone was. My parents set an absolutely wonderful example and always showed us a real commitment to giving back to a community they felt had been very good to them. So I hope to follow their legacy and the tradition they have established. For my brothers and I, it’s just part of our DNA.

“I’m grateful to the example my parents provided for our entire family,” Zallek continues. “My brother Mark, is a physician in Mankato and I know how many boards and committees he serves on – because we often cross paths! Even though he has an incredibly active practice, he is very generous with his time. My other brother, Scott, now lives in the cities but he also remains very involved in causes he cares deeply about. What’s really fun is to watch my three children, now in their 20’s, begin to emulate the example set by Grandma and Grandpa. That’s when you understand the true impact of philanthropy.”

Her parents, Brett and Gretchen Taylor, are still active philanthropists at ages 88 and 86. Brett took part this year in the Dancing with the Mankato Stars fundraiser with her brother and her daughter. Gretchen is still on the board of the YWCA and, in fact, was the first board president of the Mankato Area Foundation in the 1970s.

“That’s one of the reasons why when the Executive Director’s position was advertised, I jumped at it. Given our family’s ties to both the community and the Foundation, I thought it would be fun to fulfill that role and do something really impactful with it.”

And indeed she has made an impact since taking over the helm at MAF in 2009. In this interview, Zallek talks about how the volunteer board orchestrated the incredible growth of MAF and what’s next for the organization that is widening its footprint each year.

So what happened in the last five years to spur the incredible growth MAF has experienced?

In the late 2000s the board started putting together the pieces to facilitate growth. Hiring an executive director gave the Foundation someone dedicated to working with the Board to create the necessary infrastructure while spending the time to facilitate local philanthropy in this community – matching donors with projects and programs critical to this area. We also increased the size and scope of our Board of Directors. We did that very purposefully by identifying who needed to be on the board in terms of what skills and talents were necessary to enable our growth. In addition to our board, we recruited a number of community members who champion the role of a community foundation, to serve on a variety of our committees. I am incredibly grateful for the support I receive from our volunteers and I feel very fortunate that in 2007 our board raised the funds to hire the first executive director. They knew the Foundation could be more impactful in the community if we could dedicate staff to help move it forward, and I believe we’ve proven that was a good decision!

Mankato Area Foundation was formed in 1974. So why did they feel the time was right to finally take that step?

For decades the board operated the foundation following a “community chest” model. What that means is they would identify a project, and then raise money for that specific project. Then they would identify the next project, and raise money for it. Some examples of projects funded at that time were the fountain in the library, the Red Jacket Trail and Williams Nature Center. So the Foundation was giving away hundreds of thousands dollars – to support some amazing initiatives, but consequently never accumulated assets. It wasn’t until the ‘90s when O.P. Confer, who had been one of the first board members, passed away and left an endowed fund to the Foundation, that the board decided to change their approach. An endowed fund is invested and granting is provided from the income from that fund. That, actually, is more typical of how community foundations generally function. So really the board started working toward that model in the ‘90’s–hoping to create a philanthropic vehicle that would support our community for decades to come. But in order to sustain their granting and commitment to philanthropy, they needed to keep growing. Consequently, it was important to grow our donor base as well. If you are responsible for individuals who want to leave a legacy to this community you need to be a trusted resource. So we needed to have all our infrastructure in place–including the right staff and volunteers, as well as the appropriate policies and procedures to perform our role as the local advocate for philanthropy. We wanted to do our job in a superior manner so that individuals would want to partner with us to facilitate their philanthropic efforts.

As you are a resource, it looks like you can provide several different types of funding.

We can do any number of things. That’s what I love about a community foundation because everyone’s philanthropy is different and we accommodate all their different styles of giving. People give for different reasons as well. In addition to wanting to be philanthropic, there is often a tax benefit that drives their desire to work with the Foundation. For instance, the most popular philanthropic vehicle is a donor-advised fund. A donor-advised fund allows individuals, families or corporations to play an active role in their philanthropy. Their fund can be established and built up over a number of years or a life-event may be the impetus for creating a fund and then granting from it over time. The advantage is that a donor-advised fund allows our donors to be very thoughtful about the process while determining how they want to leave their legacy. It is during that process that the Foundation can be a resource for our donors. We like to get to know their passions and match those to the right nonprofit and the right projects and programs in the area. Also, some donors choose to give it all away during their lifetime and others choose to grant from the income allowing their fund to impact the community into perpetuity. It’s important that we spend the time getting to know our donors and how they want to personalize their giving. Donor-advised funds also give us the opportunity to work with more than one generation. When we’re working with a fund that has long-term goals, we often get to work with the children (and hopefully someday) the grandchildren of the original donors. It is a wonderful way for donors to teach the next generation about philanthropy. It’s also very rewarding to watch the intent of those original benefactors be carried out by their heirs. I love hearing ‘mom and dad would have loved this project!’

Would you say that’s your biggest role, helping those donors find the right way and place for their funds?

What I love is when I have a donor in my office and we are trying to figure out what really makes them excited about philanthropy and about giving back to the community. I remember I hadn’t been doing this very long when Max Heintz Senior came in to see me. His wife had passed away recently and he knew he wanted to do something to honor her memory – but he wasn’t sure what that was. We weren’t quite hitting it at first when suddenly he said, ‘you know what Nancy, she was never able to go to college. They educated her brothers, but girls didn’t get to go to college back then. And she always wanted to.’ So we established a scholarship fund for girls in the Mankato area and in Watertown, South Dakota because they had lived there at one time also. Every spring when we would tell him about the amazing women who had been awarded the Marlyn R Heintz scholarship, he would say ‘Marlyn would be so proud of me’ and he would get teary eyed. That’s why my job is so great – because we get to do that. We get to match the kind of philanthropy and the kind of difference people want to make in the community with a very personal style of charitable giving. Community foundations have a significant amount of flexibility. We can receive many kinds of gifts, including unique assets such as gifts of grain, land and stock. And then we can work to develop a plan that matches one’s financial needs with their charitable intentions – now and in the future. Donor-advised funds have the greatest degree of flexibility and are a very popular choice for many of our donors. However, we also offer scholarship funds, as I just described, as well as funds designated to support a specific nonprofit organization or a specific initiative important to our donors. Many individuals and families we have worked with have left bequests in which they leave funds to the Foundation in their will. It is then our role to ensure that their charitable wishes are carried out and charitable intent is honored. It is very common for us to work with those individuals or families as they are doing their estate planning so that we can better understand what they hope to achieve through their legacy. I am always very honored when someone chooses to have the Foundation administer their philanthropy. It’s a big responsibility and one that we take very seriously.

Do you have an example of that in our community?

Al and Erla Fallenstein are a great example of a local couple who chose the Foundation to administer their charitable giving after they passed away. When they created their wills, they picked specific areas they wanted to impact through their bequest to the Foundation. They chose parks in Mankato and North Mankato, and projects/programs in Mankato and North Mankato. So we had four areas to impact through their fund. So far, the Fallenstein’s fund has granted to several projects within Sibley Park including Kiwanis Holiday Lights. In North Mankato we have supported wonderful projects like the Fallenstein Field – a barrier free handicapped accessible ball field. We also partnered with Anthony Ford Pond Hockey Tournament for renovations to Spring Lake Park, and are now supporting efforts to create Fallenstein playground – an all inclusive playground. These are all projects Al and Erla couldn’t have anticipated in their lifetime but we feel would be thrilled we have been able to support. In fact, through the administration of the Fallenstein’s fund, I have gotten to know their son, John, very well. He told me Sibley Park was Erla’s pet project and, because of that knowledge, much of their fund has helped with park improvements. When I approached John about the concept of helping sponsor Kiwanis Holiday Lights so that the project could get some traction in the community, he explained that they had lived on Mary Circle and that Christmas lights were very important to Erla. So if there are Christmas lights in Sibley Park, John told me it just couldn’t get any better than that!

Again, this feels so good. Especially in the example like the Fallensteins when it is a total win: the community benefits, the local Kiwanis club benefits, everyone that visits Mankato benefits and the Fallensteins hopefully know we are doing really cool things with their planned giving.

Along with individual donors, I understand corporate giving is also a big push for MAF.

That is our role too, and a part of our growth from that 2 to 12 million. Consolidated Communications, which has gone through some ownership changes recently, had their own foundation starting back in the ‘60s when it was Mankato Citizen’s Telephone Company (MCTC). Many people remember HickoryTech and then Enventis and the generous support to our community through that foundation. When they were bought out by Consolidated Communications they wanted to make sure the legacy of their foundation continued in this community. The management and board of MCTC had dedicated stock and resources to fund their foundation so they wanted to make sure those dollars stayed local and supported local nonprofit programs and initiatives. Since they couldn’t see into the future, they wanted to bring those dollars from their foundation to MAF when they sold. So we now manage that for them but it is very much a partnership between our two organizations. Because it is a donor-advised fund, they have an advisory committee that is actively involved in the granting process. They are the most structured partnership that we have in the sense that they take grant applications once a year, we vet and review the proposals and present those that qualify and are aligned with their focus areas. They review the requests and make recommendations regarding their granting. In addition to providing their group with knowledge of the nonprofit community, we provide their back office support as well.

Is that one area your foundation can grow even more, through corporate giving programs?

Corporate philanthropy has become a recent focus area for us. Our growth has come quickly enough that we were working mostly with individuals and families. It is very clear that this is just an incredibly generous community. I get to work with a number of directors of community foundations around the state and I leave every meeting grateful I get to do this in Mankato because the individuals and businesses we have in this community overwhelmingly believe in giving back. But what we have also realized is that the businesses contribute a great deal but they don’t always get the recognition that maybe they should.

So, we’ve been focusing more on our corporate giving program. We’ve been meeting with various businesses to discuss how we can help them coordinate their philanthropy. Because we want to make it easy, we want to make it rewarding and, of course, impactful. And once we match their charitable giving to the right program or project, we can then draw attention to what can be accomplished through corporate philanthropy. Mankato Area Foundation would like to start telling the community how generous these businesses are being. I honestly don’t think they get the credit they deserve because it’s hard to pat yourself on the back if you make a contribution. They can’t just put out a press release saying ‘look how wonderful we are!’ So it’s our role to shine a spotlight on philanthropy and show people all the things that have been accomplished through the generosity of this sector. Because what we have realized is that philanthropy becomes contagious and once you do it and once you see the impact it creates, it becomes very rewarding and you want to do it some more.

I noticed that at times you bring several donors together for a project.

Yes, I like to think of the Mankato Area Foundation as a philanthropy hub. By being that hub of philanthropy I can work with several donors when I find out about projects that may need some collaboration. It gets back to understanding the goals of our donors and their philanthropic passion so I can alert them to something they may not have been aware of. And I might have two or three that I can bring together to help fund a project that needs greater monetary support. It makes it easier for the nonprofits too.

Speaking of other nonprofits, we are sitting here in the midst of many of them. This Shared Spaces building is just beautiful.

The concept of a nonprofit center had been on the community’s bucket list for nearly 40 years. Denny Dotson told me he remembers very clearly sitting in meetings ages ago and talking about a nonprofit center where we could share resources, collaborate, just be together. Everybody would get very excited about the concept, but then go back to their real lives and busy worlds and nothing would happen. It really just needed someone or some group to take the lead. So in about 2013, our board had a strategic planning meeting and actually just said, we would like to lead the charge to create a nonprofit center. But then came the ifs. If we can find the right building of 10,000sf, if it’s in the right location downtown, if there’s enough parking and storage. I remember sitting there wondering what building would possibly fit all of that! But a couple years later I found out the Blethen, Gage & Krause law office was coming up for sale, its 9,700sf, it’s in downtown, it has 37 parking spots and 6,000sf in the basement for storage…so wow!

What’s really cool about this project, what I am most proud of, is I went to Denny Dotson and I said ‘what do you think of this opportunity, do you think this will resonate with our community?’…and he said I don’t know, but let’s start calling and we’ll know after we talk to four or five people if it is going to work or not. Lisa, we called on 11 people and nine of them believed in the concept so fully that they donated the funds to allow the Foundation to purchase the building. So we raised $750,000 in a very short amount of time – it was amazing! So that answered my questions, yes, it resonated with the community!

So you got the building, what were the next steps in truly making it a nonprofit center?

Then it needed about a half million dollars worth of renovations! We needed multiple meeting spaces. It needed to be made more accessible, so we put in an elevator. We needed amenities that would allow us to do our work – a phone system, technology for the meeting rooms as well as general upgrades to the interior. Foundations at both the regional and state level stepped and supported us hugely. So the foundations really saw the value in what we were trying to accomplish.

It’s just been a really neat area. Now six incredibly robust nonprofits are in this building: Greater Mankato Diversity Council, Greater Mankato Area United Way, Minnesota Council of Nonprofits, Miracle League of North Mankato, YWCA of Mankato and the Foundation. But we also encourage other nonprofits that aren’t in this space to use the building, use our conference rooms, use the technology, use our common area and take advantage of other services such as our copy machines. So this truly is a hub for nonprofits. It is just a hoppin place! The activity that happens in this building on a daily basis blows my mind. The ability to just walk down the hall and talk to the director of the United Way or up the stairs to the director of the YWCA is awesome. We are supporting the missions of nonprofits in and out of this building. There are great resources right here in one spot, it’s just really helpful to have the knowledge base that comes with daily interaction. It’s a very entrepreneurial concept to create this and a very unique concept in the state. I’ve had numerous groups contact me or come tour the building in hopes of replicating this model. It certainly helps that it has been so well received. Our biggest issue now is that our nonprofit partners all need more space. I see that as a good problem.

This growth of MAF has also meant growth in staff?

When I first started it was just me in the basement of Midtown Square with the assistance of a very part time accountant. Now we have three and one half staff and are hoping to add another one. I have a personal assistant, Tricia, who is committed to making this organization run smoothly. She is the main point of contact for our board and our volunteers – it’s a big job. Sarah is dedicated to overseeing our granting and scholarship awards. Her job really is to understand what our local nonprofits are accomplishing in the community. She is my boots on the ground and lets me know who is doing what, who is helping who, and who might need our support. Our region has a very robust nonprofit community so she is very busy. We are also very dependent on the skills of our accountant. Joan and I started together in 2009 and her job has increased significantly. She makes this organization tick and allows me to focus on our donors and the nonprofit community. It is quite an amazing team who focuses daily on our role as the voice of philanthropy.

And I know the MAF board is very involved in the operations.

Yes, my board is incredibly involved in setting the overall vision for the Foundation as well as the oversight of operations. We have committees comprised of both our board members and community volunteers and they are all very active. Committees include finance, investment, philanthropy, marketing, structure and governance, and granting. So, even though our staff is really relatively small, I still have an amazing amount of talent to draw upon. But they are all volunteers and I have to be respectful of the fact that they have a number of commitments. Although I work for my board, I like to think I work with them. We have a fantastic group and I look forward to the day when I can ask them to do less – but right now – they’re busy! The good news is, they believe so completely in the role of this organization to promote and facilitate philanthropy that, I believe, they get a lot of satisfaction from volunteering with our organization.

So you have staff, your board, the other nonprofits…how does the business community in general fit in?

One of my priorities is to work closely with advisors in the community. Those individuals include attorneys, CPAs, and financial advisors because they are on the front lines with their clients’ and may be the first to realize when someone has a philanthropic need or desire. One reason the advisor community likes working with the Foundation in regards to their clients philanthropic needs is that we are neutral. As I said, everyone’s philanthropy is different and we can help him or her determine what that means. We want their giving to be impactful but we also want to make sure they get the genuine “feel good” that one should get when being philanthropic. So the advisors we partner with realize what we provide and what we can do for their clients so they often refer them to us. Much of our growth has been because of those partnerships in the community so we’re glad they see the value in our work and how we can be a resource for them.

What’s your biggest challenge?

I want to stress that when people hear the word philanthropy they think they have to have great wealth. Although I do get to work with people with vast resources, we also really like to work with people who are just trying to figure out what their charitable giving can look like and how to just get started. You don’t have to have lots of wealth to get started with our foundation and you can make a difference in a lot of ways. To many organizations, a thousand dollar gift is a big deal! It doesn’t need to be a million dollar gift. We encourage people to start with us when you are younger and let it grow. Too many people think they have to wait until they retire but we encourage to start giving back in whatever way you can, in say, your 40s because I’ll tell you, it’s contagious! Once you start, you’ll wish you would have started sooner!


Zallek’s Personal Philanthropy

Zallek generously offers her time, talents and treasures to many area causes including  the Mankato Clinic Foundation, Gustavus Adolphus College, Twin Rivers Council for the Arts, E2020, the St. Peter School District and First Presbyterian Church.

End of an Era

Zallek’s family legacy goes beyond their volunteer work. Her family started the famed Brett’s Department Stores in 1868. Growing up she always thought running that retail operation was her destiny. She attended Gustavus Adolphus in St. Peter graduating with a business degree and promptly went to work for the department store.

“I just thought I’d work there for the rest of my life,” says Zallek. “At least that was the plan in my head.”

It was a good plan for a while. In the early 90s her father was Chairman of the Board, her brother was president, and she was vice president, when faced with a hard reality.

“We realized that family-owned department stores just weren’t going to exist anymore,” says Zallek. “We had to make the very, very difficult decision to close the stores. Believe me, that is not the legacy you want to leave, that your generation is the one that closed the store that was 128 years old.” 

Zallek and her brother Scott were young enough to reinvent themselves, and their dad could retire. But it was their other family they were worried about.

“It was hard because the employees are like your family. We had 300 employees and that was tough, so tough,” reflects Zallek.

“I was eight and a half months pregnant when it happened, so I decided to stay home with my kids for a while. When my youngest went off to kindergarten, I decided it was time I could go back to work. Mankato Ballet Company was looking for an Executive Director. I had danced all the way through college and have always loved that art form. So I was fortunate to match my business pursuits with something I really enjoy. So I did that for about 5 years. But then wanted a new challenge so I became the Executive Director of the United Way in St. Peter and was with them for about 5 years when this position became available. It’s already been 8 years, but I feel like we’re just getting started!” 

Paving Its Own Philanthropic Way

In addition to dispersing funds for others, semi-annually, the Mankato Area Foundation makes its own grants from its Community Fund. As part of the framework for our community granting, Mankato Area Foundation funds projects and programs that foster livability in the Mankato area and focuses on four areas: arts and culture projects that enrich or strengthen infrastructure and opportunities for arts and culture offerings in Mankato area communities; recreational activities or visible and useful enhancements to area parks; education and community development programs, projects or initiatives that educate area citizens of any age in ways that help shape the Mankato area; and aesthetics endeavors such as landscaping, restoration, remodeling or other improvements to a community site.


Mankato Area Foundation

Address: 127 South Second Street #100, Mankato, Minnesota
Phone: (507) 389-4583

Lisa Cownie

Editor of Connect Business Magazine