Women's Business Centers in the Spotlight

Lawmakers on Capitol Hill are turning their sights to women's business issues with an eye on Women's Business Centers (pdf), a program partly funded by the Small Business Administration.

The Senate Small Business and Entrepreneurship Committee has scheduled a Sept. 20 hearing on the future of women's small business programs that is expected to be lively. The House Small Business Committee plans a hearing on SBA contracting issues, including women's programs, on Wednesday.

Late last month, the top lawmakers on the Senate small business panel pressed the SBA in a letter (pdf) to comply with a law that make grants available to established women's business centers throughout the nation.

There are currently about 100 of these centers across the United States designed to aid women in business formation, particularly those who are socially and economically disadvantaged. The majority of the centers' clients have household incomes of less than $50,000 and 49 percent hold only a high school diploma, according to a 2005 Babson College study.

Chairman John Kerry (D-Mass.) and Sen. Olympia Snowe (R-Maine) tucked language into a much broader emergency appropriations bill signed by President Bush in May that would enable matching funds to continue to be available to the longest-serving centers.

"The SBA needs to act quickly so that successful centers throughout New England and the United States are not forced to close their doors because they lack the funding to continue providing women with the business counseling and technical assistance," said Snowe in a statement.

At the Center for Women and Enterprise in Boston, many of the women who show up on its doorstep have no idea how to take their business idea to operation, said Donna Good, CEO of the women's center that also has offices in Worcester, Mass., and Providence, R.I. On average, 60 percent of her centers' clients are actively managing a business venture, "but most of the centers don't have the ability to self-sustain and need the federal funding they've relied upon," Good said during an interview at the June Bug Cafe in the Boston suburb of Jamaica Plain.

Good's operation boasts success stories like Helen Greiner's iRobot, which became well-known for its popular Roomba hands-free robotic vacuum.

Dallas Oskey incorporated Telforward with his wife Tracey in June 2002 after attending classes on entrepreneurship at the Women's Business Center of Northern Virginia, located in Springfield. Dallas, who was the lone male taking the women's center course, attended while Tracey helped build the business in its Tyson's Center, Va., office. It now employs 15 people and is profitable.

"The center kept us from making some mistakes that we would have made," said Tracey.

The SBA and the Senate panel appear to disagree over the funding disbursement for the longest-serving centers. The senators are urging the SBA to disburse funds by Jan. 1, 2008 at the latest, but the SBA says that conflicts (pdf) with Office of Management and Budget guidelines, the intent of the Small Business Act and other legal language.

The SBA gives each center $150,000 per year for five years. The individual centers are required to match at least 50 percent of that money for the first two years and then match 100 percent for years three to five, explained Barbara Wrigley, executive director of the center in Springfield, Va. As the centers begin aging, they become eligible for "sustainability funding" for five years.

The Springfield center, which is more than six years old, received $102,000 from the SBA in fiscal 2007. Wrigley believes her funding will increase for fiscal 2008, but that depends on how much Congress allocates toward the program overall.

Until May of this year, a center was expected to graduate out of the federal funding program after 10 years. Now centers can be funded permanently. However, some business leaders have expressed concern that centers nearing their 10-year mark will have to significantly cut back on services or shut down unless they get their fiscal 2008 funding soon.

Women Entrepreneurs of Baltimore, known as WEB, reaches its 10-year anniversary as an SBA-affiliated center at the end of this month.

"In the non-profit community, funding is a mosaic," said JoAnne Saltzberg, the group's CEO. "Anytime you lose a piece of the mosaic, there's a hole. For Baltimore's center, losing the SBA funding is a significant loss."

WEB received a little less than $100,000 for fiscal 2007 from the SBA, which was about 10 percent of the center's total budget, according to Saltzberg. "In effect, we're losing about 10 percent of our '07 revenue."

"We've known it's been coming and we've been working extremely hard to replace it, but there are two kinds of loss," she said. "There's the financial support, primarily for the people who serve women-owned businesses...and [losing the funding] takes us out of the SBA family. We'll always be a women's center but we're losing our strategic relationship with the SBA."

Although the law was signed in May allowing for continued funding, "there's a whole set of rules and regulations and process and bureaucracy that has to happen," said Saltzberg. "The [longest-serving] centers may not even get to an application process to ask for more funding for six to nine months." Saltzberg plans not to fill two and a half vacancies on her staff, which currently totals six employees.

About 190 people were accepted into WEB's program this year. Center data shows that it graduates 85 percent of those people, while about 80 percent of graduates start businesses. After five years, 72 percent are still in business, said Saltzberg.

Meanwhile, Sen. Kerry requested in May an SBA inspector general investigation (pdf) into why some of the agency's payments to the centers were made up to two years late.

The SBA's most recent strategic plan (pdf) acknowledged that the agency plans to better leverage its resource partners such as women's business centers in the upcoming fiscal year.

The Association of Women's Business Centers, a virtual organization with staff based in Maine, was in town last week to lobby, meet with SBA Administrator Steven Preston and rendezvous with the staff of the Women's Business Centers from around the nation who gathered in Washington for an annual meeting and SBA training.

By Sharon McLoone |  September 17, 2007; 1:55 PM ET Regulation Legislation
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Read the U.S. Women's Chamber of Commerce testimony about the failure of the Small Business Administration to implement the women's federal procurement program.


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