Supporting
Self-Employment
May 1998
A Menu of State & Local Initiatives that Support
Microenterprise:
Provide Management Support
Expand Capital for Micro-Loans
Support Marketing & Business Networks
Strengthen Business Capacity
Provide Personal Support
Association for
Enterprise
Opportunity
AEO
Access to Credit
Media Project
ACMP
Supporting Self-Employment:
A Menu of State & Local Initiatives
that support microenterprise
Table of Contents
Page
Summary of Menu ............................................................................................... i
I.
Introduction
A. The Microenterprise Movement ............................................................. 1
B. Need for National & Local Visibility ..................................................... 1
C. How to Use this Menu ............................................................................ 1
II.
Menu of State & Local Initiatives
A.
B.
C.
D.
E.
Goal:
Goal:
Goal:
Goal:
Goal:
Provide Management Support for Micro-Programs .................... 2
Expand Capital for Micro-Loans................................................. 4
Strengthen Marketing & Business Networks .............................. 6
Strengthen Business Capacity of Micro-Entrepreneurs .............. 8
Provide Personal Support for Micro-Entrepreneurs .................. 10
III. State & Local strategies
A. Strategic Planning ................................................................................. 11
B. Funding Sources ................................................................................... 13
C. State Networks & Intermediaries.......................................................... 14
iV. Resources
A. Source Documents for State & Local Initiatives .................................. 15
B. Technical Assistance Organizations ..................................................... 15
C. Readings & Reference Materials .......................................................... 15
V. Acknowledgments
A. Microenterprise Support Programs ....................................................... 17
B. National Visibility Partners .................................................................. 18
C. Funders ................................................................................................. 19
Endnotes ........................................................................................................ 19
Fax-Back form for Resources
Summary of Menu:
State & Local Initiatives that
Support Microenterprise
Paradigm Program
A. Goal: Provide Management Support for Micro-Programs
1.
2.
3.
4.
State & Local Administration of the Federal C.D.B.G. Program ......................... San Francisco, CA
State Budget Support for Microenterprise Programs or Intermediaries ................ Nebraska, Virginia
State & Local Application for a Federal E.T.A. Grant ........................................................ Michigan
State Administration of Welfare Reform
B. Goal: Expand Capital for Micro-Loans
1.
2.
3.
4.
5.
6.
State CDFI Programs .......................................................................................................... New York
Risk Management Programs for Private Lenders ....................................................................... Ohio
Secondary Market Programs .............................................................................................. California
State-Level Guidelines For Community Reinvestment ....................................................... New York
Linked Deposit Program ....................................................................................................Oklahoma
Bank Consortia
C. Goal: Strengthen Marketing & Business Networks
1.
2.
3.
4.
Internet Technology for Marketing or Business Operations ..................................................Vermont
Buyer - Supplier Networks ............................................................................................ Pennsylvania
Production or Service Networks .................................................................................. ACE-net/Ohio
State & Local Procurement of Microenterprise Goods & Services ............................................ Iowa
D. Goal: Strengthen Business Capacity of Micro-Entrepreneurs
1.
2.
3.
4.
E.
State & Local Administration of the Job Training Partnership Act ............................................ Iowa
State Administration of Agricultural Extension Services .................................... Mississippi State U.
Conversion of Unemployment Insurance to Self-Employment Training .......................... New Jersey
Self- Employment Training Programs ............................................................................ Ventura, CA
Goal: Provide Personal Support for Micro-entrepreneurs
1. Transportation & Child Care .................................................................................................
2. Business Facilities ..............................................................................................................................
3. Individual Development Accounts ...................................................................................... New York
i
I. Introduction
A. The Microenterprise Movement
Between 1991 and 1995, microenterprises created 3.8 million jobs nationally, while corporations
with 500 or more employees lost 3.1 million jobs.1 “Microenterprise” includes people who
create their own “self-employment” jobs, and they often hire others as well. Recent surveys
define microenterprise as a business that has five or fewer employees and a low budget.
Since 1990, the number of microenterprise support programs has grown from a handful to over
500 organizations that work at the local, state and national level.2 Most of these organizations
belong to a national network, the Association for Enterprise Opportunity (AEO). There are
state-wide networks that are active or organizing in at least 19 states, which are interested in
asking public officials to support the microenterprise movement as a strategy for job creation.
B. Need for National & Local Visibility
Microenterprise is sometimes overlooked as an economic development strategy because the
enterprises it supports are small. In reality it is the fastest-growing job creation strategy in
America. If the promise of microenterprise is to be realized, it is essential that policy-makers and
community leaders have better access to information about the ways that they can promote
microenterprise as a strategy to create new jobs.
To this end, AEO and several partners have joined in a national visibility campaign. One partner,
the Access to Credit Media Project (ACMP), is producing a documentary on the microenterprise
movement entitled, To Our Credit, which airs on the PBS television network in 1998. Another
AEO partner, the Center for Policy Alternatives (CPA), is developing a visibility “took kit” that
local microenterprise programs can use to communicate their mission and needs to local leaders.
This report provides a menu of proven policy initiatives that state and local officials can use to
support their home-grown microenterprise programs. It was produced by the Harrison Institute
for Public Law at Georgetown University Law Center.
C. How to Use this Menu
Part II below identifies five critical needs of microenterprise development programs. Under each
need, there is a menu of “paradigm programs” that provide models for replication by other state
or local governments. Part III provides guidance on how to choose an initiative, how to pay for
it, and where to go for network support. For each item on the menu, there are source documents
and resource people ready to help you. Part IV shows you how to find these resources by phone,
fax, email and Internet web-sites. If you are viewing the web-page version of this report, you can
“click” on any symbol or underlined program for more detailed information.
1
II. Menu of State & Local Initiatives
This section presents a menu of 21 state and local initiatives to support microenterprise. They
are organized under five policy goals, which reflect the paramount needs of the nonprofit
programs (“micro-programs”) that support micro-entrepreneurs. In practice, many of these
initiatives address multiple policy goals, not just the ones that they are listed under below. They
are listed below under a single policy goal in order to illustrate how the initiative meets a
concrete community need.
The decade of the 1990s is a crucial time in the evolution of microenterprise policy. As the
examples below illustrate, there is now a solid body of experience at the state and local level.
However, these programs are still the exception, not the rule. Most cities and states do not yet
include microenterprise as part of their economic development strategies.
This menu is a work in progress; we are still looking for programs to fill some categories. If you
know of a program that can serve as a model, please contact the Harrison Institute (see p. 18).
A. Goal: Provide Management Support for Micro-Programs
“Microenterprise programs” are primarily run by non-profit organizations to
promote self-employment through microenterprise development. Some of the
core services that they provide include: (1) identifying and coordinating public and private
funding sources available to microentrepreneurs; (2) aiding microentrepreneurs in obtaining
business loans; (3) screening potential borrowers; and (4) providing business-related technical
assistance.
Private nonprofit programs are a linchpin for the successful implementation of the public
programs designed to aid microentrepreneurs. They are “leaner,” closer to the community and
much more flexible than most public bureaucracies. If microenterprise programs are underfunded, there is a likelihood that public and private moneys designated for microenterprise will
be inefficiently spent, that microenterprises will fail to reach their full potential for want of
satisfactory technical assistance, or that policies developed to foster microenterprise will be
under-utilized. Adequate funding for management of microenterprise programs is essential to the
success of microenterprise development. The options for meeting this need include:
1. State Or Local Administration Of The Federal Community Development Block Grant
(CDBG). The Federal Community Development Block Grant Program is designed so that
states or localities are able to create economic development programs that meet federal
standards. The state or locality may then fund the program with federal CDBG money.
2
Paradigm Program: San Francisco SEED Program.
The city and county of San
Francisco have developed a microenterprise outreach and training program
called Self-Employment and Enterprise Development. The program is
implemented through a consortium of five community-based nonprofit
agencies. Program funding combines CDBG and private funds, which
support both training and general management expenses of the city and nonprofit
agencies.
2. State Budget Support For Microenterprise Programs Or Nonprofit Intermediaries. Many
states have appropriated funds to support non-profit intermediaries for microenterprise
development. The intermediaries usually serve a three-part role: (1) combining public
and private funds to increase the total amount available; (2) developing a strategy such as
combining loans with training or support for business networks; and (3) maintaining
public accountability for use of funds and compliance with state or federal program
requirements.
Paradigm Program: Nebraska Micro Business Development Act.
Nebraska has enacted
an innovative budget appropriation which utilizes leveraging techniques to
increase the state’s initial investment by up to four fold. The leveraged
funds are designated to provide operating support to community-based
microenterprise programs. The Act appropriates $250,000 per year from
the state budget and is administered by a state agency. The agency then has two choices:
it may either directly award grants to community-based intermediaries, or it may contract
with a statewide microenterprise organization to award grants to community-based
intermediaries. If the agency chooses to contract with a statewide organization, that
organization is required to match state money dollar-for-dollar. Grant recipient
organizations are likewise required to provide non-state funds (federal, local, or private
funds) in the ratio of 1:1 to the grant amount. Thus, the scheme turns the state’s initial
investment of $250,000 into a potential $1,000,000 for microenterprise programs.
Paradigm Program: The Virginia Enterprise Initiative.
The Virginia Dept. of Housing
and Community Development has outlined legislatin that allows state money
to be used both to leverage federal money and private re-sources. The
initiative could leverage a potential $3 million investment by Virginia into $6
million for the microenterprise sector.
3. State or Local Application for a federal E.T.A. Grant. The federal Employment and
Training Administration (part of the U.S. Department of Labor) administers a
microenterprise grant program for which state and local governments may apply. The
grant program is designed to encourage microenterprise policy development at the state
and local level. Five microenterprise grants awarded in 1997 tallied over $1,240,000.
Paradigm Program: Michigan Jobs Commission ETA Grant Award.
The Michigan Jobs
Commission created a project proposal and was awarded a 1997 ETA grant
for $225,000 to fund Michigan economic development initiatives that
3
promote microenterprise.
4.
State Administration of Welfare Reform. The welfare reform act passed in 19963 requires
states to create criteria for using a federal block grant entitled Temporary Aid to Needy
Families (TANF). TANF funds could be used in numerous ways to address
microentrepreneurial needs. Funding for microenterprise intermediaries is one of the
authorized uses of TANF.
Paradigm Program:
B. Goal: Expand Capital for Micro-Loans
“Loan capital” is money that microentrepreneurs borrow to finance their
enterprise. The principal is repaid by the entrepreneur, usually with interest,
although sometimes at an interest rate that is less than prime rate.
Microentrepreneurs have difficulty getting commercial loans because micro-loans are too small
to be profitable for most commercial banks. In addition, commercial lenders often believe that
microenterprises are unsuitable lending risks due to the lack of collateral involved, or the
borrower’s lack of business experience.
1. State CDFI Programs. CDFIs, or community development financial institutions, are
dedicated to providing credit to individuals denied traditional lending. CDFIs were
established under a federal Act.4 Qualifying CDFI lending institutions are eligible for
competitively granted federal money, which they may then use for community
development lending. A national network of CDFIs is in place. Because of their focus
on “high-risk” lending, CDFIs are uniquely qualified to satisfy the credit needs of
microentrepreneurs.
Potentially, states could support this network of CDFIs and utilize their expertise by
appropriating money to increase the amount of loan capital available to CDFIs and
providing avenues for technical support of CDFIs.
4
Paradigm Program: New York CDFI Act.
In recognition of the valuable role that
CDFIs continue to play in assisting low-income individuals and communities
access to credit, New York has established a “CDFI Fund.” The purpose of
the fund is to provide technical and financial assistance to NM New York’s
network of CDFIs. Recipient CDFIs are required to use Fund money for
investments in needy communities. The fund is administered by a board of governors
who determine how to invest the appropriated money so as to best support the existing
networks of CDFIs.
2.
Risk Management Programs for Private Lenders. States and localities may encourage
commercial lenders to extend credit to microenterprises by mitigating the risk of default.
Initiatives include forming government-backed risk pools, and loan
guarantees.
Paradigm Program: Ohio Mini-Loan Program. Ohio has created a loan
guarantee program in which the state partially guarantees microenterprise
loans.
3.
Secondary Market Programs. Money which is made available for lending to
microentrepreneurs is often organized in a “revolving loan” fund. In a revolving loan
fund, money is made available for microlending. Borrowers’ interest and principal
repayments are used to replenish the loan pool, causing the amount of money available
for lending to gradually grow bigger. However, one significant drawback of a revolving
loan fund is that potential entrepreneurs must often wait until outstanding loans are repaid
before loan capital can be made available to them.
State and local policy-makers may extend the amount of capital available for
microenterprise lending by developing secondary market programs. These programs
begin by identifying outstanding microenterprise loans, which have graduated to a more
“bankable” level. This means that the risk involved in the loan has been reduced, either
by the success of the business or because the entrepreneur has established a history of
repayment. Once these “bankable” microloans are identified they can be sold to
traditional commercial lenders. The purchaser of the loan agreements assumes control of
the outstanding loans, and the revenue generated may used to replenish the fund principle.
Paradigm Program: California Secondary Market Initiative.
California requires a state
agency to solicit bids from financial institutions to buy packages of
“bankable” microloans. Through this solicitation the agency is expected to
create a secondary market for community and economic development
lenders. The agency is also required to help identify outstanding loans that
these lenders may sell.
5
Paradigm Program:
4.State-Level Guidelines For Community Reinvestment. State or local policy-makers may
develop guidelines for community reinvestment that particularly encourage investors to
invest in state and local microenterprise loan funds.
Paradigm Program:
5.
Linked Deposit Programs. Policy makers may make commercial loans more feasible for
microentrepreneurs by developing linked deposit programs with commercial lenders.
State or local funds are deposited with commercial lenders at reduced rates of interest on
deposits. In return, lenders extend credit to microentrepreneurs.
Paradigm Program:
Paradigm Program: Oklahoma State Linked Deposit Program.
Oklahoma deposits state
funds at a reduced rate, and commercial loans are made to “eligible small
businesses” at 3% less than prime. Up to $200,0 00 is available in Oklahoma
linked deposit lending.
6. Bank Consortia. Policy makers may encourage commercial lenders to extend credit to
microentrepreneurs by encouraging banks to organize microenterprise lending consortia.
Consortia arrangements allow lenders to reduce the risk of individual loss through
cooperative agreements which spread higher-risk loans among several lenders.
C. Goal: Strengthen Marketing & Business Networks
Small business networks connect microenterprises with one another and with
the public. Some networks help microentrepreneurs identify and support one
another through mutual patronage. Some networks aid microbusinesses by increasing their
public exposure and marketing efforts for little or no cost. Networks utilize on-line databases,
web-sites or books to market their members.
One of the most challenging aspects of microentrepreneurship in America is the complex and
competitive nature of the United States market. Microentrepreneurs are forced to compete with
6
larger, more established businesses for their market share. Small business networks help to even
the playing field by allowing microentrepreneurs to support one another and by allowing
consumers to identify and support microenterprises.
1. Internet Technology for Marketing or Business Operations. Because of the Internet’s
unique and infinite ability to reach mass audiences at low expense, it is an ideal forum for
marketing microenterprises. Policy-makers may aid in connecting microentrepreneurs to
the Internet by sponsoring programs or sites dedicated to microbusinesses.
Paradigm Program: Vermont “Smart-Site”.
Vermont is using part of its Employment
and Training Administration Grant to create “Market Research Centers” that
will develop an on-line “smart-site” service dedicated to marketing
microenterprises.
2. Buyer - Supplier Networks. Databases or simple listings of state or local small businesses
help to identify and connect buyers and suppliers to one another at little or no cost.
Microenterprise buyers and suppliers can mutually bolster their businesses
through
conscious patronage and thereby establish symbiotic relationships.
Paradigm Program: Pennsylvania “M-net.”
The Economic Development Council of
Pennsylvania, a public-private partnership, sponsors “M-net,” a buyersupplier on-line database to all Pennsylvania manufacturers.
3. Production or Service Networks. Production or service networks are comprised of small
groups of microenterprise firms that combine forces to develop new products to meet
emerging market needs. The network coordinator identifies both a potential market and
network “partners” who are capable of filling it. The goal of production networks is to
identify the human resources available in a particular community and unite those
individuals with a particular product niche, which that community has yet to
fill.
Paradigm Program: ACE-net Food Venture Project.
ACE-net, a nonprofit community
development organization based in Appalachia, has organized a flexible
manufacturing network that focuses on specialty foods in Southeastern
Ohio. ACE-net introduced firm owners to promising market contacts. The
microentrepreneurs then collaborated with the potential buyers to select and develop
products.
4.
State & Local Procurement of Microenterprise Goods & Services. State and local
governments can support microenterprises as market participants by
establishing policies to “prefer” microenterprise-produced goods and
services when available.
Paradigm Program: Iowa’s Targeted Small Businesses. Iowa’s Department of
Economic Development administers a program designed to encourage the
development of state-identified “targeted small businesses” (TSBs). The
7
Iowa state government has adopted a policy of purchasing goods produced by TSBs. All
departments, agencies, community colleges and public school districts have an
established goal to purchase at least 10% of all goods and services from TSBs. In the
1995 fiscal year, Iowa governments spent $33,000,000 on TSB-produced goods.
D. Goal: Strengthen Business Capacity of MicroEntrepreneurs
Microentrepreneurial training and technical assistance programs are designed to
teach microentrepreneurs to learn how to start and maintain a successful microbusiness.
Programs also counsel clients in obtaining credit and repaying loans. Training and technical
assistance programs often extend to both pre- and post-loan guidance.
Many potential microentrepreneurs have a great idea for a small business and the motivation to
make that business a success, but virtually no business experience. Without business training,
many would-be entrepreneurs could not advance beyond the initial planning stages. Without
follow-up technical assistance, many microenterprise ventures could not reach their potential,
and in many cases, could not repay their credit obligations.
1. State & Local Administration of the Job Training Partnership Act. The federal Job Training
Partnership Act of 1982 makes federal money available to states to be used for training
unemployed individuals. States may use JTPA funds to provide self-employment training
for potential entrepreneurs.
Paradigm Program: Iowa JTPA and Microenterprise Program.
Iowa has begun to
integrate its JTPA program with existing microenterprise training services
throughout the state so as to make self-employment an option for its
recipients.
Paradigm Program:
2. State Administration of Agricultural Extension Service. There is at least one Land Grant
University (LGU) in each state.5 LGUs have an on-going obligation to service the needs
of their communities through research and educational programs called Agricultural
Extension Services. State policy-makers may use this resource by partnering with LGUs
to develop a self-employment training curricula.
8
Paradigm Program: MSU “Home-Based & Micro Business Briefs.”
Mississippi State
University Extension Service, in cooperation with the United States Small
Business Administration, state and local governments and the private sector,
offers “one-stop” management and technical assistance to home-based and
micro businesses. The assistance is provided at 22 community sites
throughout Mississippi.
3.
Conversion of Unemployment Insurance to Self- Employment Training.
The North American Free
Trade Agreement (NAFTA) Implementation Act allows states to use Unemployment
Insurance (UI) funds to establish voluntary employment training programs. The Act
permits states to create programs in which eligible dislocated workers are offered the
option of accepting entrepreneurial training and self-employment support in lieu of UI
benefits.
Paradigm Program: New Jersey SEA Program.
New Jersey has enacted a UI waiver
program that allows UI claimants to voluntarily waive their UI payments and
instead receive benefits under the New Jersey Self-Employment Assistance
and Entrepreneurial Training Program (SEA). SEA benefits include
counseling and technical assistance in developing a business plan, financial
assistance for entrepreneurial training courses, and weekly compensation.
E. Goal: Provide Personal Support for Micro-entrepreneurs
State and local governments can foster microenterprise development by
supporting microentrepreneurs. Often they are in need of transportation, child
care or business-related personal items such as business wardrobes. Policy-makers can address
these needs by providing subsidies either directly to entrepreneurs or through tax credit
programs.
Fledgling microenterprises often have unique start-up costs. Individuals trying to start a business
face challenges beyond obtaining loan capital, networking and business training. If
microenterprises are to become viable sources of economic sustenance, states and localities must
continue their commitment to fostering these enterprises through the vulnerable early stages of
their development.
1. Transportation & Child Care.
Paradigm Program:
2. Business Facilities.
9
Paradigm Program:
3. State-Administered Individual Development Account Programs.6 TANF (welfare reform)
funds may be used in conjunction with a state-designed individual development account
(IDA) program. In an IDA program, the state creates a savings account for an individual
beneficiary. The state encourages the beneficiary to contribute to the savings account by
establishing a “matching” incentive. The state agrees to deposit money into the account
in a ratio proportionate to the amount contributed by the beneficiary. The beneficiary
may then elect to use the account funds for state-specified purposes such as start-up
expenses related to a microenterprise venture.
Paradigm Program: New York Individual Development Account Act.
New York has
developed a pilot IDA project that permits community development
organizations to design an IDA program within specific state guidelines and
submit their proposals to the state for approval. New York beneficiaries are
permitted to use their IDA money for state-defined microenterprise
expenses. TANF funds are also designated to compensate community development
organizations for the cost of administering the programs.
10
III. State & Local Strategies
This section provide some ideas on how to design a state or local initiative to support microenterprise. A successful strategy is likely to: (1) meet the needs of local micro-programs at their
current stage of development; (2) use available funding sources efficiently; and (3) take
advantage of state networks or intermediaries in order to assure flexible implementation.
A. Strategic Planning
If microenterprise development is going to continue to grow, it is essential that
policy-makers and advocates make wise decisions as to which policies to support. When
choosing among possible policy alternatives, it is helpful to consider the following factors:
A question implicit in this inquiry is, “what
are the needs of your community?” The needs of every state and locally are unique.
Some states’ microenterprises are primarily urban, others rural. Some states and
localities have excess loan capital but no technical assistance. Others need loan capital to
meet the demand for credit.
1.
What are the needs of your microenterprise community?
2.
Would the policy maximize your potential funding sources?
3.
What is the most capable state network or intermediary organization to implement a policy?
4.
Many times a need may be met in one of
several ways, some more fiscally efficient than others. For example, if federal money can
be captured, it makes sense to do so and leave state budget appropriations when federal
funding is not available. If state funds are sufficient, could the state appropriation be used
to leverage federal or private money?
If no appropriate
implementing structure is available, it is unlikely that an initiative will reach its full
potential. Policy-makers should consider state networks and intermediaries as
community development “infrastructure,” which have or could develop the capacity to
implement state policies more efficiently and flexible than a state agency could.
Would a policy maximize your opportunities and minimize your obstacles?
Finally, policy-makers and
advocates must consider their political climate. It is important to understand the forces
working both for and against one’s advocacy. It is also helpful to seek coalitions and
allies.
One way to design a viable policy initiative is to analyze your options with a framework that
compares your needs with the fiscal and political considerations. The following chart is an
example of how to compare various options.
Framework for Designing a Policy Initiative
11
Type of
Policy Component
(selected examples)
Criteria for Choosing Policy Components
Program
Needs
Funding
Sources
Fiscal
Agent
Political
Opportn.
Political
Obstacles
Provide Operating Support for Micro-Programs
State appropriation
CDBG funds
TANF funds
Expand Loan Capital for Entrepreneurs
State CDFI program
Unemployment benefits
Risk management
Create Small Business Networks
Internet technology
Buyer-supplier networks
Manufacturing / service networks
Increase Business Capacity of Entrepreneurs
JTPA funds
Agricultural extension
Welfare reform
Provide Personal Support for Micro-Entrepreneurs
Transportation & child care
Business facilities
Individual development accts.
B. Funding Sources
Some state and local initiatives have been successful because their planners
carefully analyzed potential sources of existing funds that could be tapped to start the program.
In the case of federal funds, the most likely sources are large block grants (such as CDBG and
JTPA) or smaller demonstration programs for microenterprise (such as SBA or Department of
Labor). While these are federal funds, the allocation of funds is planned and implemented by
state agencies, usually on the basis of an annual plan that most states file in order to receive
12
federal funds. The kind of framework shown above can also help to analyze which and how
many federal sources are needed to meet state or local microenterprise needs.
Potential Federal Funding Sources
Block Grants or Demonstration Programs
Microenterprise
Needs
(selected examples)
HUD:
CDGB
Labor:
JTPA
Provide management support.
_
_
Expand capital for micro-loans.
_
Support marketing & networks.
_
Strengthen business capacity.
_
Provide personal support.
_
Commrc:
CDFI
_
Commrc:
SBA
HHS:
TANF
_
_
_
_
_
_
_
A similar kind of analysis can help to identify state funding sources as well. Instead of block
grants, the most likely sources of existing funds are agency budgets that are appropriated by the
legislature. The following is an example of an agency-based framework.
Potential State Funding Sources
State Funding Sources
Microenterprise
Needs
Economic
Development
Labor:
Job
Training
Provide management support.
Expand capital for micro-loans.
Support marketing & networks.
Strengthen business capacity.
Provide personal support.
13
Education:
Adult or
Continuing
Education
Telecommunications
Other
C. State Networks and Intermediaries
For policies to succeed, they must be implemented by nonprofit-sector
organizations and individuals with expertise and experience. It is also true that turf issues can
emerge at the state level, which require sensitive management. Whether for reasons of politics or
capacity, participation of state nonprofit networks is important for most successful state-level
policies. State-wide microenterprise networks are now either active or organizing in 19 states.
Several cities and states have delegated to the nonprofit sector the role of financial intermediary
and broker or provider of technical assistance services to support microenterprise.
IV. Resources
1997 Directory of State Microenterprise Associations,
includes contact information, contact persons and
mission statement. Compiled by Barbara Anderson, Corporation for Enterprise Development.
Available from CfED, 777 North Capitol St. NE - Suite 801, Washington, DC 20002, phone 202408-9788, fax 202-408-9793.
1996 Directory of U.S. Microenterprise Programs,
includes contact information, contact persons, mission
statement, operating budget, sources of funding, target population, area served, services
provided, accomplishments and future plans. Compiled by Peggy Clark, Self-Employment
Learning Project of the Aspen Institute, Washington, DC. Available from AEO, 70 East Lake
Street, Suite 1120, Chicago, IL 60601-5907, phone 312-357-0177, fax 312-357-0180, email
aeochicago@aol.com.
AEO Exchange,
a monthly newsletter on AEO activities, policy alerts and best practices in the field.
Edited by Mary Lou Egan for AEO. Available from AEO.
AEO Policy Paper,
provides a summary of the role that microenterprise plays in the U.S. economy,
the case for public sector report of microenterprise development, principles to guide federal
policy, and recommendations for federal policy, many of which would strengthen funding for
programs administered at the state and local level. Prepared by AEO board members, notably
Kate McKee and Ellen Golden, and policy advisor Alison Feighan of Rapoza Associates.
Available from AEO.
Community Capital Builders, A Leadership Brief on Rural Intermediaries,
explains what nonprofit intermediaries
do, how they relate to state government programs, and how states can support intermediaries.
Written by Robert Stumberg for the Center for Policy Alternatives. Available from CPA, 1875
Connecticut Ave., NW, Suite 710, Washington, DC 20009, phone 202-387-6030, fax 202-98614
2539, email info@cfpa.org, web-site /www.cfpa.org/.
Journal of Developmental Entrepreneurship,
a semi-annual academic journal devoted to issues concerning
microenterprise development. William Lewis Randolph, managing editor. Published by the
School of Business and Entrepreneurship, Norfolk State University, 2401 Corprew Avenue,
Norfolk VA 23504, phone 757-6883-2563, fax 757-683-2506, email wrandolph@vger.nsu.edu,
web-site /www.nsu.edu/schools/business/jde/index.htm/.
Using the CDBG Program to Support Microenterprise Development,
provides guidance on how cities and states
can meet technical HUD requirements for use of block grant funds. Written by Joyce Klien for
the Corporation for Enterprise Development, 1994. Available from CfED.
Realizing the Promise of Microenterprise Development in Welfare Reform,
identifies the ways that microenterprise
promotes self-sufficiency and makes policy recommendations for implementation of welfare
reform. Written by Ray Boshara, Robert Friedman and Barbara Anderson, Corporation for
Enterprise Development. Available from CfED and AEO.
The Practice of Microenterprise in the United States,
documents the operational scope and economic impact
of microenterprise programs. Written by Peggy Clark, Self-Employment Learning Project of the
Aspen Institute, Washington, DC. Available from AEO.
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V. Acknowledgments
This report was written by Meredith Render and edited by Robert Stumberg, both of the Harrison
Institute for Public Law at Georgetown University Law Center. The Institute worked under
contract with the Center for Policy Alternatives and the steady oversight of Delba Riddick
(CPA). Several people deserve credit for their helpful comments on drafts, without which this
report would be much less interesting or accurate. They include Jason Newman and Erin Boggs
(Harrison Institute), Chris Benuzzi (AEO), Rob Rooy (ACMP) and the many AEO members and
supporters who are listed in the following section.
A. Microenterprise Support Programs
This report is based on the commitment and ideas of many microenterprise
support programs. Our special thanks go to the following organizations and individuals who
provided information on state and local initiatives.
Africa Fund ......................................................................................... Susie Johnson
California - CA Association for Microenterprise Opportunity ..................................
California - Ventura County ......................................................................................
CDFI Coalition...........................................................................................................
Illinois - Women’s Self-Employment Project ........................................ Sheri Moses
Iowa Department of Economic Development ...........................................................
Iowa - Institute for Social & Economic Development .................... Jason Friedman
Kansas Center for Rural Initiatives ......................................................... Carol Peak
Massachusetts Association of CDCs .................................................. Joe Kriesberg
Massachusetts Microenterprise Coalition ............................................... Chris Sikes
Maine - Micronet and Coastal Enterprises ........................................... Ellen Golden
Montana Microbusiness Lending Association .......................................Charles Hill
Ohio - ACE-net ........................................................................................ June Holly
Pennsylvania Microenterprise Coalition .................................................. Jill Mahon
Pennsylvania - Mennonite Economic Development Associates .........Howard Good
Minnesota - Alliance for Minnesota Microenterprise ...................... Mary Matthews
Mississippi State University Extension Services .......................... Susan Cocciarelli
Missouri Association for Social Welfare ...............................................Betsy Slosar
National Conference of State Legislatures ................................................................
Nebraska Enterprise Opportunity Network ........................................ Gene Severens
New York - Statewide Emerg. Network for Soc. & Econ. Security .... Lois Johnson
New York State Banking Department ......................................................................
Ohio Department of Development .............................................................................
Ohio Microenterprise Network ........................................................ Patricia Barnes
Oklahoma Treasury Department ................................................................................
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Rhode Island Microenterprise Association ........................................ Ken Proudfoot
Tennessee Network for Community Economic Development.......... Michelle Flynn
Texas Microcredit Network ...................................................................... Ed Mason
U.S. Department of Labor ..........................................................................................
U.S. Small Business Administration..........................................................................
Utah Microenterprise Loan Fund ...............................................................................
Vermont - Technical Assistance Providers’ Association ........................ Carol Flint
Virginia Microenterprise Network ............................................... Becky Christensen
B. National Visibility Partners
The following organizations are partners in a national visibility campaign to
promote microenterprise. The campaign includes production of To Our Credit, a public
television documentary, presentations to national networks of nonprofit developers and public
officials, self-help visibility efforts by local micro-support programs and their state-wide
associations, and direct dissemination of this report to state and local public
officials.
AEO
Association for Enterprise Opportunity. AEO is a member-based association of more
than 500 organizations that are committed to microenterprise development. AEO
provides its members with a forum, information and a voice to promote enterprise
opportunity for people and communities with limited access to economic resources.
AEO members include practitioners, advocates, public agencies, funders. Executive Director:
Christine Benuzzi; AEO Chair: Mary Matthews. Contact AEO: 70 East Lake Street, Suite 1120,
Chicago, IL 60601-5907, phone 312-357-0177, fax 312-357-0180, email
aeochicago@aol.com.
Center for Policy alternatives. CPA is the nation’s leading non-profit, non-partisan
public policy and leadership development center that is devoted to communitybased solutions to strengthen families and communities. CPA links elected leaders
across the fifty states with private and non-profit sector leaders in the search for
common ground, new ideas and resources to create solutions that work. President and CEO:
Linda Tarr-Whelan; Chief Operating Officer, Delba Riddick. Contact CPA: 1875 Connecticut
Ave., NW, Suite 710, Washington, DC 20009, phone 202-387-6030, fax 202-986-2539, email
info@cfpa.org, web-site /www.cfpa.org/.
Access to Credit Media Project. ACMP creates visual media to foster a public
awareness of the idea that fair access to credit for self-employment is a fundamental
part of equal opportunity. ACMP’s flagship project is To Our Credit, a two-episode
documentary that explores the issue of micro-credit through the lives of real people.
It will air on the PBS television network during the autumn of 1998. Other ACMP
projects include nonbroadcast videotapes and a tape clearinghouse. Principal: Rob Rooy.
ACMP
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Contact ACMP: 7407 Hilltop Drive, Frederick MD 21702, phone 301-473-8797, fax 301-4738695, email rer@rooymedia.com, web-site /www.rooymedia.com/.
C. Funders
This report was made possible by a grant by the Charles Stewart Mott
Foundation. We wish to express our sincere appreciation to Jack Litzenberg for his support of
this project and his leadership in the field of microenterprise in the United States. Additional
funding was provided by Georgetown University Law Center.
If you have ideas for expanding this policy menu, please contact:
The Harrison Institute for Public Law. The Harrison Institute is a part of Georgetown
University Law Center that promotes political and economic democracy. The
Institute serves community advocates, national networks and public officials who
are developing a bottom-up strategy for responding to social, economic or
environmental needs. Director: Jason Newman; Clinical Director/Policy: Robert
Stumberg. Contact Harrison: 111 F St., NW, Suite 102, Washington, DC 20001-2095, phone
202-662-9600, fax 202-662-9613, email hinst@law.georgetown.edu, web-site
/www.law.georgetown.edu/clinics/hi/.
Endnotes
1
Small Business Administration Report.
Research Division of the Massachusetts Dept. of Employment and Training.
3
The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996.
4
The federal Community Development Banking and Financial Institutions Act of 1993 provides a federal definition of
“community development financial institutions” (CDFIs).
5
The Morrill Acts of 1862 and 1890 established and funded Land Grant Universities (LGUs).
6
Section 404 (h) of PRWORA.
2
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