Principal bails out debt-laden Junior Achievement
Principal Financial Group Inc. has bailed out the financially troubled Junior Achievement of Central Iowa by lending it $1.9 million that might never be repaid. “It’s a friendly loan,” said Principal CEO J. Barry Griswell. “There’s no interest, and the loan doesn’t have to be paid back.”
Griswell said the non-profit education organization was $2.3 million in debt last fall. Local businessmen Bill Krause and Dick Jacobson also became involved in resolving the issue, he said.
Principal’s commitment involves “a significant amount of money, but this is a significant organization and we wanted to make sure it succeeds,” Griswell said. Although the debt is not expected to be repaid, Principal would have a claim on the Junior Achievement building at 6100 Grand Ave. if it is ever sold.
Griswell confirmed the arrangement at an event hosted last week by Junior Achievement. The occasion marked several milestones: Kevin Graving, who has worked for the organization for about 11 years, was named president; John Deere Credit, a division of Deere & Co., announced a donation of $250,000 to be allocated over three years; and the local group marked its 50th anniversary and the participation of 15,000 students in its Exchange City program.
Graving succeeds Terry Click, who stepped down as president in November 2004. He said the organization’s budget for the fiscal year beginning July 1 will be approximately $800,000, down from a peak of $1.4 million within the past few years. “A lot of non-profits have struggled, and we were one of them,” Graving said. “We have to do a better job of getting our name out in the community.”
Krause, who has been a major donor to Junior Achievement personally and through his company, Krause Gentle Corp., said: “There was a period when management took its eye off the ball. If you’re receiving contributions, somehow that gives the impression that it’s an ongoing thing; but it’s not an annuity.
“If you quit ‘selling’ Junior Achievement to the public, people don’t call up and say, ‘Where do I send some money?’”
Krause’s company contributed $200,000 last year. He said the budget allows for $100,000 in 2005, and that amount is in the form of a performance-based incentive.
Larry Sidwell, senior vice president of John Deere Credit, said the contribution announced last week is a continuation and expansion of an existing arrangement. The company increased its previous three-year commitment by $60,000, Sidwell said.