Bret Keisling is joined by Steve Storkan of the Employee Ownership Expansion Network (EOX), who discusses the seven new state centers, plans for 2021, the importance and challenges of fundraising, and his EO A-ha Moment.
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Episode 128 Transcript
Bitsy McCann: 00:03 Welcome to the EO podcast, where we amplify and celebrate all forms of employee ownership.
Bret Keisling: 00:09 Hello, my friends. Thank you for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. Today, we have a return visit from Steve Storkan who's the executive director of the Employee Ownership Expansion Network, better known as EOX.
Bret Keisling: 00:31 EOX has been very busy since we last heard from Steve on Episode 91 of the podcast. He'll tell us about the seven state centers that have opened this year, plans for 2021 and beyond, the importance and challenges of fundraising, and how he works with EO ambassadors to develop new state centers. Enjoy the episode.
Bret Keisling: 00:55 Steve, thanks for coming back on the podcast.
Steve Storkan: 01:00 Hey, thanks for having me. I appreciate it.
Bret Keisling: 01:02 I appreciate everything that you're doing. As I think you're aware your name has been coming up in a variety of recent podcasts with a variety of different guests. It's a sign of the great work that you and your colleagues are doing. And you're going to spend a little bit of time catching us up to date. You guys, despite a crazy 2020, you guys have had a very busy year.
Steve Storkan: 01:24 Yeah, we have had a busy year and it's exciting to hear that we are getting our name out there and that people are mentioning us. It really makes all the work that we do on a day-to-day basis feel like it's well worth it. I know, you know, sometimes in this COVID world, we're all in our house and we're trying to get things done and we don't, we don't see each other anymore. And you wonder sometimes if anybody's out there seeing what's happening. But it's really great to hear that people are talking about EOX and the progress that we've made, because we have worked hard during COVID and we have made some good progress that I'd love to talk about.
Bret Keisling: 01:57 Well, it's great. And I believe you're at seven state centers and a couple of them are staffed. So why don't you give us the rundown of where you're at and how's it going
Steve Storkan: 02:05 Yeah, you are correct. We are now at seven state centers officially opened by EOX since we started this venture in January of 2019, when I was hired as executive director. You know, each one of the state centers is in a different place in their life. When I say open, what I mean by open is that we have formed an organization, at least an organizational board of directors. We've filed with the state. We are an official corporation. We have a bank account, you know, we have an EIN. We're really ready to do business and begin our mission of education and outreach on the power of employee ownership.
Steve Storkan: 02:43 So let me just tell you about each of the state centers. We've got North Carolina and Minnesota, really the farthest along. They were our first two state centers that we opened.
Steve Storkan: 02:51 In North Carolina, Anne Claire Broughton has been doing an amazing job. She was our first state center. She was my first employee ownership ambassador. I was a little spoiled in that Anne Claire really provided some great things that I thought we could do across the country and we would open these all up just as fast as we did in North Carolina. But they're doing great things and I'm happy to announce that they have raised enough money, they've got a board of directors of 10 individuals, including myself, we have raised enough money to hire the first official executive director for a state center. So starting in a couple of weeks here, we'll have a brand new executive director in North Carolina. And I can't wait to see the progress that they're going to make beyond what they've already done. One of the greatest accomplishments they've had they've gotten funding from the city of Durham to have a partnership with the city of Durham, and so things are going wonderful in North Carolina, building a pipeline of businesses.
Steve Storkan: 03:46 And then in Minnesota we have, you know, we have a board of directors there, a very active advisory committee of service providers. I can't say thank you enough to the service providers who stepped forward in Minnesota. I think we have 25 or 26 service providers in Minnesota who are providing technical assistance and financial support for that state center. Sue Crockett, formerly the administrator for the Minnesota/Dakota chapter of The ESOP Association has stepped in as interim executive director. And to be honest with you, if Sue wasn't closer to the end of her tenure of working I think she would be the permanent executive director because she's doing amazing as well. Starting to get a network of individuals, she's working with economic development people. They've done three or four webinars already, three of them with -- two of them with cities who are interested in learning more and telling their businesses in the city about employee ownership. So both North Carolina and Minnesota are doing amazing things, and I'm really, really proud of, of the work that they're doing.
Bret Keisling: 04:44 That's great. Steve, let me just, also for our listeners, Sue Crockett, you mentioned the chapters that she ran. I think she's had other chapters as well, because I know that I worked with Sue quite a bit and it would have been if not the Pennsylvania chapter then the Ohio, you know, some of the Great Lakes chapters, but Sue for the entire 13 years I've been involved in employee ownership has been a very important administrator. So I'm very glad to hear that she is with you.
Steve Storkan: 05:12 Yeah, I believe she started the Minnesota chapter 30 years ago. And then also took on Pennsylvania and was part of the Great Lakes. So yeah, she's well-known to a lot of your listeners. I'm sure.
Steve Storkan: 05:22 And then, you know, we jump into the other state centers. We've got five other ones to talk about, but we've got Tennessee, Georgia, and Florida all kind of in the same area of progress. They are all, they all have active boards of directors. They are all -- Tennessee has done a launch event, a webinar Florida and Georgia, Georgia has done some programming. So they're all really kind of all three of them are right there at the cusp of the next step. And the next step is that they're trying to raise money. You know, these state centers need funds to hire an executive director because what we've seen in North Carolina and Minnesota, as soon as you get an executive director of the caliber of Sue and Anne Claire, magical things happen; you start to get programming happen, you start to get a buzz about the state center and the next thing, you know, funding comes along. So it's kind of the chicken before the egg, and that's kind of where we are with Georgia, Tennessee, and Florida.
Steve Storkan: 06:14 I'm very happy and very I'm proud of the people are thankful for the people who are helping us, the service providers in all three of those states and a couple of non-service providers who are helping us run those state centers and we're doing our best from the national level to give them as much support as we can, not actually having somebody spending day, you know, their daily tasks working with that state center.
Steve Storkan: 06:35 And then lastly, we've got Missouri and Texas, our two newest state centers. Both of them have come on board in the last two to three weeks. They both filed with their state governments for official corporation status. We're working on bank accounts. We've had our first organizational board meetings with both of them, again some great service providers who have stepped forward in those states. And so that rounds out the seven state centers that we've opened in these first two years. And like you said, despite COVID I remained as active as I could on the phone. It was hard to do this without having in-person meetings. I'm an in-person kind of guy. I love to sit across the table and talk to people and have meetings, but we were able to do it. And I really appreciate everybody who supported us, especially this year, to get all of this progress made.
Bret Keisling: 07:21 Let's talk about Texas for just a moment, because as I think, you know, our friend Jennifer Krieger, who's I think been on the podcast eight or ten times at this point -- absolutely wonderful. But she worked, she was instrumental with you in the setting up of the Texas center.
Steve Storkan: 07:38 Yeah. You know, the one thing that has to happen for a state center to happen is I have to have an ambassador, that's what I call them, I don't know if it's the right term, but the ESOP ambassador, employee ownership, ambassador, whether it's worker cooperatives, ESOPs, trusts, whatever it is -- I need at least one person, preferably two, who are passionate about employee ownership. And if I look back to every single state center that we've started, EOX has not necessarily gone to that state and tried to find the people, they've come to us. And Jenn is a perfect example of that. I met Jenn at a conference. I think it was, yeah, it was at the Vegas conference last year, in 2019, we sat and had dinner, talked about her passion for employee ownership. And she was the boots on the ground that helped me find other people that might help.
Steve Storkan: 08:21 You know, the same thing has happened in Missouri. Same thing has happened in Florida, John Burgess in Florida, Will Stewart both came to me at an NCEO conference, I think. So it takes that one person to kind of have the passion to, for us to come in and help them. Now down the road, we're going to have to open state centers and find those ambassadors. But right now we've been really, really fortunate to find seven people across the country, at least seven, who are passionate about employee ownership and want, and want to do more.
Bret Keisling: 08:49 I would like to give a little teaser, you and I, and Jenn Krieger -- we're just trying to work out the schedule -- but are actually going to do an upcoming podcast, where my goal is to have you and Jenn talk about the process from your two different roles of how the Texas state center came about. You, what your goals were nationally, Jenn, what she was looking forward to becoming ambassador. So I'm really excited to be able to show that as a blueprint for perhaps, or perhaps other state centers or other ambassadors. The reality is you and I are busy as busy as we always are, Jenn is a valuation advisor and expert, year-end is busy! So I'm hoping that we'll get to that this quarter, if not first quarter, but really looking forward to having the podcast continue to share the stories of not just what you're doing, but how you're doing it. So that'll be very exciting.
Steve Storkan: 09:43 Okay. Yeah, that'd be great. It, I think, you know, it is a process and I'd love to hear Jenn, you know, from Jenn's point of view, why she got involved and what she hopes to, you know, for this, for what she hopes happens as a result of it.
Bret Keisling: 09:55 And for people who are listening, Jenn, literally, and I met her probably a year and a half ago at the DC conference. And first of all, if you're an ESOP world, yes, we really do talk "DC conference," "Vegas conference," we all know where we are -- but I met Jenn I think at the DC conference or maybe NCEO. And in the fall of last year, she just got the passion for employee ownership and has reached out in a lot of different ways. And so the message, and although I'll celebrate Jenn, every chance I get the message is actually, if you're looking and you're trying to find a role reaching out to you, Steve, becoming an ambassador in whatever state is certainly a good way to immerse yourself in, in growing employee ownership.
Steve Storkan: 10:39 For sure. I'm always looking for employee ownership, ambassadors. You know, when I think about the other states that I think the last count, I think I've talked to 13 ambassadors across the country and, you know, we've opened seven state centers. There's a couple coming in the future. We can talk about possibly in the future, but there are other states where we have an ambassador where it, just after research, it just at this point it's probably not going to work to open a state center. But that doesn't mean that we're not going to stay in touch and keep thinking about that state and the ambassador, because as you know, when you have someone passionate about anything, the last thing you want to do is squash that passion. And you really want to be able to connect with it and use it, and so we're continuing to do that and keep those people in the back of our minds.
Bret Keisling: 11:23 Excellent. And that's probably a good segue. Why don't you give us a look at what you're looking for next year, both in terms of the state centers and EOX itself?
Steve Storkan: 11:34 You know, next year for 2021, I think 2021 is going to be a year of a little bit of reset. We are, you know, our goal is by 2025 to have 70% of the US population covered by a state center or live in a state that has a state center for employee ownership. With eight state centers prior to EOX coming on board and seven new ones with a total of 15 state centers now, we're not, we're not saying we're going to create the 70%, but just that, in general, that we could add to it so we could get 70%. You know, we're getting close to that already. And I want to make sure that we don't go too fast. While I have ambassadors in other states, the last thing I want to have happen is just to open state centers to say that they're open to the demise of some of the other state centers.
Steve Storkan: 12:23 So we're going to take a little bit of a breath, at least in the first three to six months and say, let's focus on making sure these state centers -- let's get Georgia and Tennessee and Florida, who are in stage two, let's get them funded. Let's get programming going. Let's, you know, let's get them to that next level. So I think a lot of 2021 will be spent doing that. I'm hoping to possibly get enough funding at EOX to hire an additional person to help with that state center coordination. You know, we sit on the board of directors of all the state centers for the three years that we provide funding just so that we can make sure that our funding is being used wisely, but more importantly, to provide resources at those board meetings of best practices and other things. So you know, I'm looking to maybe add a person to help me with that.
Steve Storkan: 13:07 In addition in 2021, you know, we want to make sure that we don't let some of those employee ownership ambassadors off the hook; people that want to help that we just haven't taken that next step. And probably the first one is in Michigan. Michigan was one of the very first state centers where we've started to open and for unforeseen circumstances, including COVID, we just haven't gotten to where we want to be in Michigan. So I think we'll definitely see some activity in Michigan.
Steve Storkan: 13:32 So one of the first people I met from an employee ownership ambassador standpoint was Amy Huot in Connecticut and we worked together for a while trying to see what we could do from a state center standpoint. And that's resurrected itself again, Amy just won't, you know, won't stop, she's a huge employee ownership ambassador, passionate for it. And I'm excited to be working with her on some things some exciting things I think will happen really early in 2021. Even if the state center doesn't get to the point that maybe North Carolina, Minnesota gets to, but there's activity in Connecticut that I'm really excited about. So between Michigan and Connecticut I think those are a couple of places we'll start.
Bret Keisling: 14:12 Steve, let me, let me just tell you, I adore Amy Huot. Amy is just so wonderful. I've met her at a number of conferences. She has been on the podcast, maybe three or four times. She is an absolute amazing ambassador for all of employee ownership, let alone what she is trying to do for you. And Proponent just does such a wonderful job as an employee owned company. And so in the event that Amy's hearing this, there have been like four or five times I wanted to reach out and get her back on the podcast and now, darn it, I'm going to do it. But the sign of the people that you're working, Steve, they are talented, you know, Jenn Krieger on the one hand is a service provider, Amy's an employee owner, but they've all got brains and hard work and real passion for employee ownership. And I'm sure that that's the hallmark of a lot of people you're working with.
Steve Storkan: 15:10 Yeah, you know, if you think about the employee ownership ambassadors, now that you say that, and I think of them in my head, it's so far been all a wonderful, strong, you know, strong, very passionate women in the employee ownership community. I don't know where our guys have been, but you know, you think about Sue Crockett, Anne Claire, Amy, Jenn Krieger, Jodi Lamb from Big G Express, you know, who's now with The ESOP Association, which, you know, pulled back, but she was the ambassador that -- she's what caused the Tennessee center to get up and running. So, you know, I think of all of those you know, I think really Florida is the only one. that's, one of us guys that's jumping forward. So I really appreciate Amy and the rest of them that have, that have helped.
Bret Keisling: 15:48 David Hincapie, as you know, is with the Small Business Administration, he's with the Washington Metro office, and I had a two-part episode with David just in the last month or so. And first of all, a lot of fascinating things from the SBA. And I, certainly, blew my mind because there is so much that the SBA is required by law to provide and we're not asking for it. And I know that EO has had a tough relationship with the SBA. One of the things that David talked about, and I'd like you to comment a little bit, is he thinks that a great way to grow exponentially -- and your name actually came up in the podcast where he talked about this -- is to work with state centers, and by the way, not to the exclusion of any of the other organizations, but as...
Steve Storkan: 16:37 Sure, sure.
Bret Keisling: 16:37 As you well know. And Steve, let me just also point out on your website, your partner organizations, all of the major ones, you partner with -- am I right? The ESOP Association, NCEO, ESCA, EOF, and I think I saw CLEO Curriculum Library [for Employee Ownership at Rutgers School of Management and Labor Relations], these are all EOX partners, so we're not, you know looking one against the other.
Steve Storkan: 16:59 No, we, we know that collaboration -- we have three, you know, we have three goals this year and each year we please set our goals like every other organization, and one of the three goals is collaboration. I know, and my board knows this doesn't work without collaboration and we are collaborating with everybody and anybody that we can. A couple of organizations you didn't mention there were that come from the worker cooperative side, Project Equity, which I'm sure you hear a lot about, the Democracy at Work Institute, the U.S. Federation of Worker Cooperatives [USFWC]. I mean, we're -- everybody and anybody that's in this space we're all trying to do great things and to promote employee ownership. So, yeah, collaboration is definitely there.
Bret Keisling: 17:39 And Steve, let me just point out that the two founders of Project Equity have been on the podcast in the past the Democracy at Work Institute, we've covered a lot, their work, and now -- I'm not making the point of, oh, they've been on the podcast. What I am saying is we're all running in the same circle, we're all doing the same thing. So just as your name has come up in repeated podcasts, Project Equity is coming up regularly Democracy at Work Institute, et cetera, et cetera. So there's so many people doing good work. I'm finding myself in a really cool position of getting to talk to all of you. So thanks for -- I took us on a little tangent there. David, getting back to the SBA, as you know, his belief is that state centers can work with the small business development centers that are connected with the SBA. Can you talk a little bit about how you would see, moving forward, being able to do some of the collaborations with the SBA that David suggests?
Steve Storkan: 18:41 Yeah, and I didn't, you know, I heard the first episode with David and it was interesting, it was great to hear that you mentioned the EOX. David and I have had lunch a couple of times before COVID and he's a great supporter of employee ownership and a great friend in the SBA. And, you know, the more that we -- the deeper we get into state centers and the activity that's happening in a state center, the more I'm learning about all of these other organizations. You know, I spent 25 years as an ESOP service provider in the Midwest and, you know, unfortunately, I never heard of Project Equity, Democracy at Work Institute, SBA, how we could get -- there, just wasn't any of that. And I don't know if it's because of my position and where I am now that I'm hearing about it, or if it's just that the two communities are starting to come together. But I think, and I told David this, I think the SBA, the partnership between an SBA and the SBDCs with the state centers is critical to getting our message out into growing employee ownership,
Steve Storkan: 19:35 You know, SBA and SBDC offices. We have as business owners, everybody has a trusted advisor or two, whether that's the CPA, whether it's their banker, but I was amazed at how many people depend on, through their bankers and through their providers or their trusted advisors how much they work with the SBA and SBDC offices. And maybe it's on the smaller business size that do that. But state centers working with SBDC offices to train them on what employee ownership is, is one of my, one of my components of 2021 that I'm really looking at is, is creating a program or getting funding so that I can create a program that I'm referring to as a "train the trainer" -- and I know that's a cliché word in my nonprofit world -- but to really train people like SBA officers or SBDC officers in what employee ownership is, the power of employee ownership, what they should look for in businesses when they're thinking about employee ownership. Just being able to have them to have a tool, to be the boots on the ground.
Steve Storkan: 20:37 You know, a state center typically has one employee to start with, and then we have volunteers. Well, the more volunteers we can have, even if they don't know they're a volunteer, spreading the word of the power employee ownership, the better off we are. And I think that the SBDC offices are critical to that.
Steve Storkan: 20:52 Secondary to that, I think the more people that we can have at the SBA level that know about employee ownership, the more we're going to have a voice around the Main Street Employee Ownership Act. I probably butchered that, but the Main Street America Act that, from what I'm hearing, isn't funded is not going the way that it was intended. We were all excited about when it got passed, but maybe it's not being implemented the way it should be. I think the more David Hincapies we can have across the country, I think the easier it's going to be to have that change.
Bret Keisling: 21:21 Let me, Steve, make two points if I can. The first is on growing employee ownership broadly and everything that you just talked about, the relationships, the education, the knowledge, it's just another extension of when we say we have to find the selling shareholders and educate them, you know, we're just broadening the people that we're talking to. But I do want to make a point to those who are listening, who are the professional advisors and, you know, the same ones who might be talking about being your ambassadorship -- and David, by the way, made this point on the podcast. If someone professional advisor is working with you through the state center or working with their state center, and they're bringing in the SBA and the SBDCs for general employee ownership education. Now when the SBDCs and the SBAs aren't necessarily at your webinar or whatever it is, but they're off doing their thing and someone says, hey, do you know anything about employee ownership? They're going to make the referral contact to the professional advisor that they're working with. And David makes this point. He doesn't hide it. He's friends with an ESOP lawyer every time somebody wants to do and talk ESOP, David talks to them a little bit and then sends them to the lawyer. So I just want to make the somewhat crass commercial acknowledgement that this very much is solid business development, practice development, that I believe you got to put your work in, but if you put your work in, you're going to become that go-to person for employee ownership in your state or your city. Does that make sense?
Steve Storkan: 23:04 I would agree. Yeah. It's a win-win situation because on the other hand, if you're an employee ownership service provider or practitioner and you're looking for, you know, your client is looking for some sort of funding or assistance from the SBA, having that relationship rather than just being a guy off the street, you know how it is. You know,you have your, your local car guy that you've got, you brought in your business to three or four times. Your looked upon a little different than the guy off the street. And so I think that relationship is something that I think we can, I think the state centers can have a lot to do with that, but I think outside the state centers, that's a relationship that if I was still practicing, the more I know about that, if I was still in the third party administration banking industry, I'd definitely be connecting with my SBA office or even my SBDC office.
Bret Keisling: 23:50 And it would be so easy, Steve and I did this a lot as a trustee, to bring in the third party administrator, bring in the ESOP or EO, lawyer, valuation advisor, and trustee and the SBA, and do it for a variety of people. And the other thing, and I, and then we'll move on. I don't want this to be an SBA thing you did mention, and we've always mentioned the SBA is on the small side, they finance up to $5 million. What I didn't realize, never thought about it until David pointed out, is now they're willing to guarantee up to 5 million regardless of the transaction. So now you, couldn't -- still not going to be super big, but you could easily see a 10 or $15 million transaction where the SBA piece of it is a third to 50%. So part of my goal is just to point out that the SBA has more, if we figure out the right way to, to utilize it.
Steve Storkan: 24:51 Correct. And if we figure out the right way to have guarantees and all the other things that people say, you know, that's why I'm not in the SBA office. And then that's what the Main Street Act can do. So I think we're getting there. And, again, the more people, the more connection we can have between the EO community and the SBA, the better off we can be.
Bret Keisling: 25:09 Steve, let's take the conversation in a different direction. You have plans for 2021, you have plans beyond 2021, but you're also at the point where that's not going to happen without funding. And you can't do as much as you can do without funding as an ongoing part of your mission. So talk to me a little bit about fundraising efforts or financing opportunities -- for EOX and the state centers to be specific.
Steve Storkan: 25:37 Sure. So, you know, it's an interesting move from the private sector as an ESOP practitioner, to a nonprofit world that I had never been part of before. But you know, nobody -- everybody wants to see that their dollars are going to be used wisely and, you know, I'm no different than that, you're no different than that. When we give to a charity and I like to use the word nonprofit more than charity. But when we contribute to a nonprofit organization, in my past, I was always looking at what good have they done? What I didn't realize is that nonprofits have to start at some point and nobody wants to be the first one to do that. They want to make sure that their money is being put to good use.
Steve Storkan: 26:19 And so what we're doing, what we're in the process of doing now is we're trying to get state centers to the point where we do have some metrics. You know, we can look at the Pennsylvania center, which is our model, and Kevin's done an amazing job, Kevin McPhillips has done an amazing job, and I can point the Pennsylvania. I can point to Ohio. I can point to Vermont and Indiana, and I can talk about all of the great things that are happening, but until I get metrics, you know, foundations across the country are not really willing to open their doors to us at this point. We're working with them and working hard to change their mind and to get funding that way. State governments, city, and local governments, you know, COVID hasn't helped, but, you know, they want to see metrics as well.
Steve Storkan: 27:01 So we're in this mode of, this is a privately funded advent-- or venture. And the people that are closest to the ground are the ones that we're depending on. And that's the service providers, the employee owned companies, the selling shareholders, people who are passionate about employee ownership. That's where we are in Georgia, Tennessee, and Florida. You know, we've been working hard to produce, to raise money and I won't give what state center, but we've been working very hard and, you know, over an 18 month period, we've, we've raised I think $12,000 in one of those state centers, even though we've put the work in to do that. Well with a budget of a hundred and, you know, a full-time employee, 125,000 for a state center, or a part-time somewhere around 60 or 70, you know, there's a gap there. And so I'm trying to get metrics to show people their money will be put to good use, but at the same time, you need people to do that.
Steve Storkan: 27:51 So we definitely are in a fundraising mode. We're looking for support from anybody who's interested in growing employee ownership. And that's kind of the mode that we're in. And I, you know, I've got all sorts of ideas around that, grand plans for that, but that's definitely a focus in 2021. I wish EOX could find a national funder. I wish we could find a foundation that would take a leap of faith on us and look at what the state centers have done across the country and make a really, really large grant, because imagine what we could do, if we could, if we can fund those state centers from EOX's standpoint. And right now we're trying to fund as much as we can. We fund $75,000 over a three-year period is our commitment right now, if I could make that 150 or $250,000 commitment for every state center, I can tell you, Florida, Tennessee and Georgia would have executive directors. So that's kind of where we're at
Bret Keisling: 28:44 When you're considering fundraising and budgetary needs, that sort of thing. Have you come up with a sense of where you think the money could, or, or preferably will come from, have you given any thought to that?
Steve Storkan: 28:56 We have, you know, we started with this concept that you mentioned the PaCEO, we really followed that model. That there were some, you know, some people who wanted the PaCEO to happen, a couple of selling shareholders had the idea, they helped fund it, the NCEO helped fund it. But the service providers really were the catalyst to get that thing going and to get you know, to get an executive director hired and away we went -- or away they went. And we're trying to follow that model. And so we came out of the gate thinking that service providers and employee owned companies, if we could get a three-year commitment from them you know, and somewhere between the $2,500 and $5,000 per year-- more would be helpful, but that kind of commitment over a three-year period. So maybe a 10, 15, $20,000 commitment you know, you start adding up the numbers, 10 15 of those service providers, you're going to provide that budget.
Steve Storkan: 29:48 So that's really what we're focusing on now in each of the state centers. Typically these service providers and employee owned companies which, you know, we're looking for usually 500 to a thousand dollars from them. You know, they're located in that state. They do want to take pride in their state. They want to grow employee ownership in their state. And it's the service providers and employee owned companies and selling shareholders who, yes, it is a return on investment. You do want to be at the table when someone's talking about employee ownership, but more than anything, it's giving back to a community that's given you probably a really good career over the years, your employees, you know, it's both philanthropy and maybe a little bit of return on investment.
Steve Storkan: 30:30 And so, trying to get that message across that this is not advertising dollars. This is not a return on your investment, a hundred percent. This is about giving back to a community. You know, I was sitting thinking the other day about this three year, this three-year commitment. And I thought, you know, I was thinking about service providers and let me just give you a thought that I had. You know, there was about 1,900 people who attended the last NCEO conference in 2019. And let's just say a third of them, well, not even a third, let's just say 500 of them were service providers at that meeting. And I know we've got more, but let's just take the number 500. If we had 500 service providers across the country who took one transaction this year, and by the way, I'm hearing the service providers are busier than ever. I talked to a service provider the other day who said and not the only, not the first one who said this quarter has been the busiest quarter they've ever had in their history of their career. Let's give, so let's just say we had 500 service providers each providing $5,000 one year, just one year commitment. That's $2.5 million. ESOP company: Let's say we take half of the ESOP companies that are out there roughly -- do we use the number 6,000, let's take 3000 ESOP companies. And they each give $500 to a state center initiative. That's 1.5 million. And then each year the NCEO reports about 200, 250 new ESOPs are created. What if we had 50 selling shareholders who gave $10,000 from the proceeds of their sale to an ESOP you know, that's 500,000. We would have $4.5 million given to EOX and/or state centers to start the state center movement.
Steve Storkan: 32:15 If we had 10, 12 state centers to split that money up, we can, we could fund state centers -- 10 to 12 state centers -- for a three-year period. We wouldn't even need a three-year commitment. So I know this is pie in the sky -- and I can hear the word, the song "Imagine" in the background -- but it's a movement that we can make happen! And think of what we could do if we were able to fund that many state centers and get the word out about the power of employee ownership, think of what the states would do, think of what the foundations would do.
Steve Storkan: 32:49 We always try to get this as, you know, we always want it to be mainstream. I don't know if employee ownership will ever be "mainstream," but boy, we can go a long way with just the one year. If we just all stopped one year and said, let's make this happen. You know, again, a dream of mine but boy, it would be great if we could do that!
Bret Keisling: 33:09 It's a very worthy dream, indeed. And boy, nobody would be happier with mainstream than me. If nothing else, I'd have a lot more to talk about!
Steve Storkan: 33:21 [Laughter.].
Bret Keisling: 33:21 Steve, this has been great. Before we wrap up, as you probably know, in the last couple of months on the podcast, I've been collecting people's EO "A-ha moments." And I started a couple of months ago with mine at an ESOP meeting when I was the CEO and a team member said something that just made me go, "wow, this is different!" We probably did cover it on your original episode, but is there a moment or two in all of your career with employee ownership, related to it, where you heard about it, you know, liked it. Maybe you didn't quite get it. Was there a moment where you were like, a-ha, holy moly, this is different.
Steve Storkan: 34:04 You know, I can think of an "a-ha moment" later in my career that I'd love to share, but the first "a-ha moment," you know, my job was, I was a third party administrator and so we were the ones creating participant statements and seeing account balances. And I think like, just like an ESOP participant when I started to grow my business and then have more clients and customers, I think the, one of the A-ha moments was I started to see account balances and I would do that year to year. I was also the one that was, you know, part of my practice was to go out and hand off participant statements and describe them and explain what a beginning balance was, what a dividend was, you know, to have that. And so I would see the same people over and over again. So it wasn't necessarily an A-ha "moment" from that standpoint. It was a little bit of a over time and I think I finally, probably had an A-ha moment when I saw one account balance of someone.
Steve Storkan: 34:52 I think the moment that I will never forget is that I put an ESOP in place in 1996, helped put it in place in 1996. It was a manufacturing company in Minnesota. In 2016, or 2017, their share price had reached an astronomical number. They had had great successes as a hundred percent S-Corp ESOP and they sold the company to a friendly competitor in the Boston area and they're continuing to operate just fine and it's a great story. But I'll never forget standing in front of that -- you know, I stood in front of those manufacturing employees many of them were from Cambodia, from the Hmong community. And each year those balances would get bigger and their smiles would get bigger, but to actually -- I didn't get to hand them the checks, but I got to hand them that final statement.
Steve Storkan: 35:42 And when you're, when you're, when you're handing people like that six figure and even one person seven figure dollar amounts and asking them what they want to do with that check and trying to be as much of a financial planner as possible. It was an amazing moment to watch it from day one to year 21 and to see many of them stick around and have four or five, $600,000 account balances. And those are life-changing numbers! And I will never forget that, I shared that story all the time and it's not the only time it's happened to me.
Steve Storkan: 36:13 It's it's it's, just, it's a life-changing opportunity that we -- it'd be so easy to do for so many other people across the country! Imagine what we could do there -- I go back to saying "imagine," but imagine what this country would look like if we had more of those companies. Yeah. It's a long A-ha moment. Sorry for that. But it's I just love to tell that story.
Bret Keisling: 36:37 No, Steve, that's actually perfect. And it's a beautiful story because here's something that sometimes we forget, that's why we're doing this!
Steve Storkan: 36:49 That's exactly why we're doing it.
Bret Keisling: 36:50 What employee ownership is, people retiring -- so much more goes into it, but at the end of the day, particularly ESOPs qualified retirement plan, as you know. So by metrics someone retiring, I've gotten a little goosebumpy here. That is an absolutely wonderful story! And the fact that you mentioned, bunch of people who came to this country or their parents or grandparents did in search of the American dream, and they found it with employee ownership, I love that!
Steve Storkan: 37:20 They did. And you know, just one last point to that. You know, in the nonprofit world right now it is, it is the buzz word is to fund you know, to help communities of color, to help women business owners, just, you know, I don't want to use the word minority, that's not the right word, but to help people that may not have been helped in the past. And I think unfortunately, some people have gotten the impression that an ESOP specifically, they think about the selling shareholder. You know, they think about the millions of dollars that they're taking off of the table that goes into their pocket. I tell that story because we forget about the demographics, regardless of who that employee, who that selling shareholder was, whether he was a 65 year old gentlemen from Pennsylvania, or whether she was a 40 year old from Minnesota, the demographics of who becomes an employee owner is what we need to look at.
Steve Storkan: 38:17 You look at the floor of that manufacturing plant and the people like you said, whose parents came over here, searching or grandparents searching the American dream. If we dug deep and did a study on employee owners and the demographics of the employee owners, I think people might change their opinion if they do have a slightly not-so-positive opinion on how these operate we're changing lives and lives that other people are trying to change in different ways. So I think employee ownership has a place at the table and should be talked a lot about a lot more.
Bret Keisling: 38:48 And just a final point. We're also providing the means for people to change their own lives. You know, you and I will do what we do, but once there's a trend, you know, once there's an employee owned company, as much as we love to talk about the culture and we pop in, they're going day to day and doing their jobs and getting all of these great, you know, results on top of that. So you and I are on the same page.
Steve Storkan: 39:13 Yeah. It's an amazing thing,
Bret Keisling: 39:16 All right Steve, thank you so much. I am looking forward to, hopefully, recording with you and Jenn Krieger before too long about Texas. I would like to share if you don't mind you and I spoke a couple of weeks ago, setting this up and as you kind of went through everything that was going on your mind at the moment was all the kind of weeds and challenges and stuff you're looking at. And I really want to say on behalf of the employee ownership community, not that I have the right, but on behalf of the ownership community -- you, I hope we'll pause over the Thanksgiving and Christmas holidays and take some satisfaction in what you and those working with you have done, because I suspect in employee ownership like many other areas, 10, 15 years, when we are looking back, the seeds that you are planning this year are going to bear fruit and end up having a huge effect. So thank you. And when you're starting to get a little bit tired, keep the faith dude, because you are doing great work!
Steve Storkan: 40:17 Hey, I appreciate that. And you're right. You know, you do get in the weeds a little bit and you forget that you are doing a good thing. You can think about it, but I appreciate it when, when people give me that feedback and it makes me think of something that I didn't mention. I have an incredible board of directors who had this idea. This started in the NCEO as a task force with Loren Rodgers. It started with my chairman, Cecil Ursprung. But you know, my board members, Jim Steiker from SES, Ken Baker from New Age, Daniel Goldstein from Folience, and Neil Brozen from Ventura ESOP Services -- I mean, those guys working with them, they have the dream I'm just I'm implementing it. So I would be remiss if I didn't include them in all the great work that's happening while so, but we appreciate your support and thanks for having us on. I really do appreciate it,
Bret Keisling: 41:01 And Steve with that let me just say that, as a reminder, Episode 91, you did a great job of talking about the origin of EOX, the connection with NCEO and initially I believe you spoke at length about modeling after PaCEO. So in terms of your board, the work that you're doing, for our listeners, great time to circle back to www.ESOPpodcast.com for Episode 91. Yes, I'm doing a commercial now, Steve...
Steve Storkan: 41:28 [Laughter.].
Bret Keisling: 41:29 ...where they can circle back to Episode 91 or wherever they get their podcasts. And you're also one of those ones that you've popped up in a number of them where we're talking about the work of EOX. So Steve, any time at all the you and EOX or one of your state centers is doing something that we can help spread the word, just know that we are we are here and really happy to help you in any way that we can.
Steve Storkan: 41:53 Okay. Thank you, Bret.
Bret Keisling: 41:55 All right. Thank you.
Bitsy McCann: 41:57 We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email Bret@KEISOP.com, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling, and I'm Bitsy McCann.
Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.
A note on the transcript: This transcript was produced by Temi, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.