Latest Blog Posts

From the office of Governor Jerry Brown

PROCLAMATION BY THE GOVERNOR OF THE STATE OF CALIFORNIA

California is home to the most innovative and competitive firms in the world, placing us consistently among the top ten economies. The vast majority of these businesses employ 500 or fewer workers.

Small businesses embody the entrepreneurial spirit that has driven the economy of our Golden State. Over half of our private-sector workforce is employed by small business.

This month, we reaffirm our commitment to helping California’s small businesses thrive and prosper. The Governor’s Office of Business and Economic Development, along with key agencies of state government, works to facilitate economic growth through collaboration with small businesses. Supporting small-scale private-sector job creators is among our most promising strategies to enhance California’s human capital, expand job opportunities and increase our competitive advantage in the global marketplace.

NOW THEREFORE I, EDMUND G. BROWN JR., Governor of the State of California, do hereby proclaim May 2012, as “Small Business Month.”

IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 1st day of May 2012.

Bills

The Entrepreneurial Training Improvement Act was written by Rep. Lois Capps (D-CA23) to direct the U.S. Department of Labor to develop performance measures for self-employment in order to increase entrepreneurial training activities at the local level.

The Entrepreneur Startup Growth Act , or H.R. 3571, was introduced by Rep. Judy Chu (D-CA32) in December of 2011. The bill would provide free schedule C tax advice and help low-income business owners file taxes. CAMEO is quite pleased as the bill would institutionalize our successful CA-Self Employment Tax Initiative project.

The Microenterprise and Youth Entrepreneurship Development Act of 2011 was introduced by Representative Cedric Richmond (D-LA) in October 2011 with several California co-sponsors:

• Rep. Karen Bass [D-CA33] (joined Oct 24, 2011)
• Rep. Laura Richardson [D-CA37] (joined Oct 24, 2011)
• Rep. Barbara Lee [D-CA9] (joined Dec 08, 2011)
• Rep. Janice Hahn [D-CA36] (joined Apr 19, 2012)

The bill, H.R. 2809, would restore and enhance the SBA’s PRIME Programs and give Micro a seat at the table. AEO worked hard to make this bill a reality.

CAMEO’s FY2013 Budget Recommendations
• $8 million – SBA PRIME
• $25 million – SBA Microloan–Lending
• $22 million – SBA Microloan –Technical Assistance
• $14 million – SBA Women’s Business Centers
• $108 million – SBA Small Business Development Centers
• $22.5 million – USDA RMAP
• $32 million – USDA RBEG
• $221 million – CDFI Fund
• $769 million – DOL WIA – Adult Employment. And Training Funds
• $125 million – DOL Workforce Innovation Fund

Taking Advantage of Community Advantage

In 2011, the SBA unveiled Community Advantage, a pilot loan program that provides mission-oriented non-profit financial intermediaries with 7(a) loan guaranties for loans of $250,000 or less. It’s a potential game changer, but the roll out is slower than expected. Notes from the session follow:

The SBA Community Advantage program fills an important gap for lending in the $50,000-$500,000 range. The program opens up CDFI’s to CRA money and secondary market capital.

Bank of America has a just in time, only borrow when you need it product for Community Advantage lenders (sounds like a line of credit).

The Community Advantage program is a pilot program and the participants want it to be made permanent.

Referral programs need to improve
7(a) guarantee won’t solve all problems, as many clients don’t fit.
It’s only a guarantee, the lender still needs to find capital and create a strong balance sheet. CARS is one tool to measure that.

Organizations have a capacity issue. They need to know how to

• pre-qualify loans,
• underwrite loans,
• settle the loans the way the SBA wants, and
• collect on loans.

The SBA is working on a training, potentially on June 30, 2012.

Obstacles/growing pains include

• efficiency in the internal process
• other loan products don’t require as much documentation
• labor intensive
• SBA process is lengthy – takes 3 weeks, and
• SBA compliance has a steep learning curve.

The Community Advantage capital is not as financially attractive as the micro loan program (the capital is better.)

The program has been made easier over time, but if you can’t sell it on the secondary market, it’s not worth it. You have to put up a lot of reserves to access the program.

You need to do a lot of community advantage loans to make sense.

CAMEO has a strong presence at AEO. Our members are participating in 7 sessions. CAMEO members/staff are noted with two asterisks – ‘**’.

New Tools and Systems for Performance Evaluation & Impact Reporting: Why? Which? How?
Tuesday, May 1, 10:15-11:45am

Moderator: Rohan Mathew, Executive Director & CEO, Intersect Fund

• Elaine Edgcomb, Director, FIELD Program, Aspen Institute
• Paige Chapel, President & CEO, CARS
• Nancy Kopf, Senior Manager, Success Measures Evaluation Services
• Laura Sparks, Director of Development Finance Initiatives, Citi Community Development
• **Marian Doub, Associate, Friedman Associates/ Outcomes in Action Consulting

Impact & Culture: Organizing to Tell the Story of Your Organization
Tuesday, May 1, 10:15-11:45am

Moderator: Angie Moncada, Vice President Communications, Citi Community Development

• Wendy Baumann, President & CVO, Wisconsin Women’s Business Initiative Corporation
• **Gwyneth Galbraith, Major Gifts Director, Opportunity Fund

As resources from all sources become increasingly scarce and competition for attention increases, the need to make a compelling and fact-based case about the importance of your organization and its impact is more critical than ever. Organizations that effectively tell their stories and demonstrate their impact reap benefits in many ways including attracting and retaining talented staff; securing funding and investments; and securing partnership opportunities. In this session you will hear from experts in marketing and PR about what it takes to tell a strong story and you will hear from practitioners about the steps they have taken to build the capacity to do this well.

Helping Underserved Entrepreneurs Create Jobs: Lessons from High Performers
Tuesday, May 1, 2:15-3:45pm

Persistent unemployment coupled with structural changes in the economy create an imperative for job creation through business ownership. In this session, you will hear from experts and experienced practitioners with an impressive track record of job creation through business ownership. They will share insights from their experience on what it takes to systematically generate successful outcomes.

Moderator: John Arensmeyer, Founder & CEO, Small Business Majority

• **Julie Abrams, CEO, Women’s Initiative
• Elizabeth Isele, Co-Founder, Senior Entrepreneurship Works
• Erik R. Pages, President, EntreWorks
• Michael Simmons, Co-Founder, Extreme Entrepreneurship
• Nell Merlino, Founder, President & CEO, Count Me In (Invited)

Outsourcing Lending Operations: How New Business Models Can Improve Portfolio Management and Sustainability
Tuesday May 1, 4:15-5:30pm

Moderator: **Claudia Viek, CEO, CAMEO

• Joshua D. Miller, Underwriting Services Manager, ACCION Texas
• Leslie Hoffman, Vice President Lending & Client Service, ACCION New Mexico-Arizona-Colorado

Technology creates opportunities to standardize the loan approval process in order to reduce underwriting costs and improve risk management. At the same time, specialization permits some organizations the opportunity to create economies of scale or scope. In this session, you will hear from practitioners about the opportunities, tradeoffs and requirements associated with the decision to outsource all or part of your lending operations.

What is the Cost of “Free”?: Expanding Capacity Using Volunteers
Tuesday, May 1, 4:15-5:30pm

Moderator: Vanessa Carter, Executive Director, Campus MicroFinance Alliance

• Shannon Maynard, Director, Bankers without Borders
• Sabrina Quaraishi, Client Relations Manager, Bankers without Borders
• **Sharon Miller, CEO, Renaissance Entrepreneurship Center

Volunteering is a long-standing American tradition. Yet the face of volunteers has changed significantly over the last decade. Students, experienced professionals, and mid-to-late career-changing professionals and retirees are seeking to find ways to use their skills and interests on behalf of underserved entrepreneurs. This enormous talent pool represents a massive opportunity to improve capacity among non-profit microbusiness lenders and service organizations. In this session, you will gain a deeper perspective about what your organization can accomplish by harnessing the enthusiasm, talent, and skill of volunteers and what it takes to manage “free.”

Making Self -Employment a Workforce Imperative
Tuesday, May 1, TBD

Moderator: Patricia Harris, CEO, The Edge Connection (Georgia)

• Lynne Cutler, Executive Director, WORC (Pennsylvania)
• **Shufina English, Director of Member Programs, CAMEO (California)
• Lisa Smith, Executive Director, Enterprise for Equity (Washington)

Self-employment is a labor market trend: out of the 27 million firms in the US, 21 million are non-employer firms and 3.7 million are micro businesses with less than 5 employees. The Dept. of Labor has recognized this trend and encouraged state and local Workforce agencies to support entrepreneurship training with policies and funding, e.g. the Workforce Innovation Funds and the new Self Employment Assistance option for those eligible for unemployment benefits. Yet only a few states have responded to this opportunity. This session will showcase examples of Workforce/Micro Enterprise Development partnerships and show you how to advocate for recognition and support. The lack of performance measures for self- employment is a primary obstacle to local Workforce systems adoption. The Workshop participants will show how to address this key issue.

Plenary Session: High Impact Investing in Women- Job Creation Potential of Women Owned Micro-business
Wednesday, May 2, 2012 8:30 AM – 9:30 AM
Opening Keynote: Lisa Hall, President & CEO, Calvert Foundation

• **Julie Castro Abrams, President, Women’s Initiative
• Beth Harrison, Walmart Foundation (Invited)
• Tina Tchen, Assistant to the President & Chief of Staff to the First Lady and Executive Director of the White House Council on Women and Girls (Invited)

From David Chiu’s office:

FOR IMMEDIATE RELEASE
April 18, 2012
Contact: Judson True
judson.true@sfgov.org
415.554.7451

Board of Supervisors Unanimously Approves City Incentives for New Type of Socially Responsible Corporations
Legislation Provides Bid Preferences to Benefit Corporations Contracting With the City

San Francisco, CA – The Board of Supervisors on Tuesday voted unanimously to support an ordinance sponsored by Board President David Chiu that will provide bid preferences on City contracts to Benefit Corporations, a new form of a corporate entity recently authorized by the State of California. The ordinance will be voted on for a second time next Tuesday, April 24, with passage expected.

“As the first city to provide contracting preferences to Benefit Corporations, San Francisco is again leading the nation by supporting new types of socially responsible companies” said Supervisor Chiu. “Since benefit corporations create value for shareholders and society at the same time, we are demonstrating our commitment to sustainability, economic innovation, and social entrepreneurialism.”

The City currently provides contract bid preferences to local businesses, a program administered by the Human Rights Commission. This new bid preference for Benefit Corporations is modeled after this existing program. However, the bid preference for Benefit Corporations cannot be used to outbid a local business.

In October 2011, Governor Jerry Brown signed Assembly Bill 361, making California the sixth state to charter this new kind of corporation, joining New Jersey, Virginia, Hawaii, Vermont and Maryland. A Benefit Corporation is defined as 1) having a corporate purpose to create a material positive impact on society and the environment; 2) redefining fiduciary duty to require consideration of non-financial interests when making corporate decisions; and 3) reporting on its overall social and environmental performance using recognized third party standards.

Currently, there are over 450 Certified Benefit Corporations in 60 different industries nationwide. These companies measure their impact on society and the environment with a third party standard and include stakeholder considerations in their business decisions. San Francisco has the most Certified Benefit Corporations of any city, and the Bay Area is the home of approximately one quarter of all Certified B Corporations. San Francisco will be the first U.S. City to provide contracting incentives to these companies, which will further encourage the formation and growth of Benefit Corporations here.

“Contrary to traditional corporations where the maximization of profit is the sole requisite purpose, benefit corporations are required to create a material positive impact on society and the environment,” said Matt Bauer, of BetterWorld Telecom, which is a Benefit Corporation. “We appreciate Supervisor Chiu’s work to pass this legislation, which will help the City and County of San Francisco purchase goods and services from the sorts of businesses that San Francisco should be supporting.”