How Funders Can Help Advocacy, Service Groups Achieve Unity
Though unity long has been a goal of small-business advocacy groups and service providers, the truth is that money, rivalries and insularity often stand in the way.
The Los Angeles mayor’s office and a regional nonprofit agency are attempting to address the problem. But the real solution may come only when corporations, foundations and government agencies that fund these small-business groups start requiring them to work together.
“People are territorial when it comes to the dollars,” said Libby Thompson-Lumpkin, director of the Regional Business Assistance Network, or RBAN, whose 450 member organizations and agencies range from work-force training providers to economic development agencies. “Be it corporate sponsors or government dollars, we’re all vying for the same dollar.”
Competition for funding prevents this part of the small-business community from being a powerful advocate for the thousands of small-business owners seeking to start and expand their enterprises.
The competition for dollars has become particularly acute because funding available since the mid-1980s is drying up. Federal and state money flowed freely then for out-of-work aerospace and defense engineers. More followed for economic revitalization after the 1992 civil unrest and the 1994 Northridge earthquake.
As the small-business service agencies proliferated and their programs expanded, a need for some sort of unifying referral system became apparent. The result was the Business Resource Network, a fledgling effort out of the mayor’s office that later shifted to a more regional approach in 1996 with the creation of RBAN, run by the Los Angeles Economic Development Corp.
Quarterly meetings allow members to find out how others are helping small-business owners. The group’s bible is a resource guide that RBAN members use to make referrals to other service providers. An online version is in the works for direct use by small-business owners.
“Before we all got together, we didn’t know what each other did,” said Ronald A. Lowe, a senior credit officer with FAME Renaissance and an RBAN member. RBAN has helped him work with other lending agencies to benefit small firms, Lowe said. For example, FAME, an economic development initiative of the First African Methodist Episcopal Church, will sometimes partner on small-business loans that may be too risky or too large for one agency to handle.
Seeing what can be created when groups are brought together was also the intent of a mixer last week sponsored by the Los Angeles Office of International Trade. More than 35 organizations were invited to display their wares in booths and chat during an informal cocktail reception focusing on international trade, held at the L.A. World Trade Center downtown.
“Too often these groups . . . just keep bringing in the same crowd, and the same people end up seeing each other,” said Vance Baugham, Los Angeles city trade manager. “We wanted to bring together a large number of business owners who don’t normally come together.”
But even as these groups work together, funding cutbacks are pulling them apart. With disaster-related funding diminished, the small-business-provider community will have to stand or fall on regular budgets, said Mari Riddle, of the Los Angeles Community Development Bank. The funding increasingly is tied to job generation, creating even more competition among groups. It’s not enough to help small-business owners improve their businesses; the help must also create more jobs. That requirement can shift the focus away from aiding start-ups and home-based businesses toward larger companies that can hire workers.
One way to stretch tight dollars and reduce competition would be to require nonprofit agencies and groups to work together. Government and foundation grants and proposals could require that partnerships be created. Credit and funding could be given for making referrals to other agencies. Corporations could take the same approach, recognizing that requiring collaboration from the small-business entities they sponsor would actually give them more bang for their corporate marketing or community-service bucks.
“There is no financial incentive for them to work together now,” said Thompson-Lumpkin. “But funders could require 100 businesses be given direct help and 50 to 75 businesses be referred to others for help.”
The bottom line is that there is plenty of help out there for the thousands of small businesses in the region, but small-business owners often spend hours hunting down that help. With reduced competition and more focus on collaboration, the vision of a seamless regional referral system can come closer to reality, aiding small-business owners and the region’s economy.
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Vicki Torres is a former Times reporter who is pursuing entrepreneurial opportunities. To reach The Times regarding small-business issues, contact small-business editor Pat Benson by fax at (213) 237-7837 or by e-mail at pat.benson@latimes.com.
