The Advisory Council of the SBA’s Rhode Island district office is no more – effective this past Saturday (Sept. 30). But a new group – the Rhode Island Small Business Alliance — has already been formed to take its place.
RISBA incorporated as its own non-profit organization June 22.
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The charter of the SBA Advisory Council has not been renewed as the U.S. SBA’s fiscal year comes to a close. It has reportedly not been renewed because the very existence of the Advisory Council did not follow the guidelines set by the Federal Advisory Council Act of 1972.
That Act provides the framework for various boards and commissions, including the SBA’s National Advisory Council. The National Advisory Council remains intact, but the viability of local councils created under its umbrella is now in question. The Rhode Island SBA Advisory Council is no longer in question – it’s out of existence.
The U.S. SBA’s Inspector General – after having been asked to look into the matter — has reportedly pulled its charter because it did not meet the letter of the law of FECA. In effect, the Inspector General has ruled that a federal agency – the SBA – has created a policy of overseeing Advisory Council that should not exist.
Susan Baxter, the former director of public affairs for BankBoston in Rhode Island, has served as chair of the Advisory Council for the past two years.
Baxter said she is extremely proud of the accomplishments of the group.
“We have been recognized nationally for some of our initiatives,” she said.
She sounded disappointed that it is being disbanded – and suggested that the group could still exist, if those were the wishes of SBA Providence Office District Director Mark Hayward.
“As far as I know, my tenure as chair of the Advisory Council comes to an end at the end of this month (September),” she said. “It is then up to Mark Hayward as to whether he will re-charter the Advisory Council. My understanding is that the choice was his.”
Asked if Hayward had a choice, given the reported opinion of the SBA’s Inspector General, Baxter said that it is her understanding that the Advisory Council could still exist in an advisory role – with a limit to the number of times it could meet each year, for example.
Hayward was out of town and unable to be reached for comment.
Baxter did make it clear that she supports the efforts of RISBA.
“I believe that small business leaders and associations need to come forward and take leadership,” she said. “I certainly wish the leadership of the alliance success.”
The SBA Advisory Council had traditionally been the force behind many of the events of the SBA’s Providence office including the annual “Salute to Small Business” celebration, which draws thousands to the Rhode Island Convention Center. RISBA is expected to take on many of those duties – and more. This past May, in fact, the SBA’s Advisory Council stepped away from the “Salute to Small Business” event, which was co-sponsored by the Northern Rhode Island Chamber of Commerce.
RISBA’s creation does not come without a price.
Mark S. Deion, a small business consultant is among the founders of RISBA. Its creation, he said, has been “time consuming and costly.” For example, he points out that as a separate entity, RISBA had to acquire directors and officers insurance – at a cost of about $2,000 per year.
Deion suggests that in some ways the Advisory Council of the SBA’s Providence office is partly a victim of its own success. He also expects that other such SBA-affiliated groups around the country will soon facing the same situation. In fact, said Deion, he has already sent information to representatives in Vermont, briefing them on the situation here.
“Many states are going to find that they can no longer maintain an Advisory Council,” said Deion. “Whether they come up with a solution, as we have, is up to them.”
Deion clearly points to the dismantling of the Advisory Council as a legislative technicality, rather than the result of any misdoing on the part of its members. Eventually, he said, the SBA’s Inspector General was bound to reach the same conclusion – that the existence of the Advisory Council did not meet the letter of the law. Deion said the creation of RISBA was a way to address a potentially difficult situation as quickly as possible.
“RISBA was created because there were a whole bunch of programs that the Advisory Council had created, sponsoredand we saw a legal inability for that to continue,” said Deion.
RISBA’s Mission Statement describes the organization as “dedicated to providing technical, educational, outreach and networking support to the small business community including but not limited to supporting the initiatives of the RI District Office of the US Small Business AdministrationThese activities include advocating small business initiatives on a local, regional and national basis.”
Joining Deion, who serves as vice chairman, on the RISBA board, are: Larry E. Morse, chairman, Cheryl Watkins-Snead, vice chairman, John C. Gregory, assistant treasurer, George E. Furtado, secretary, David J. Lucier, treasurer, and Lori Webber, assistant secretary.
Morse said that individuals began getting together months ago in anticipation of the Advisory Council becoming extinct.
“We were not going to wait for the handwriting on the wall to become quite clear,” he said.
Like Deion, Morse expects other Advisory Councils to face similar circumstances.
“The federal government is reviewing the activities of Advisory Councils on a national basis,” said Morse.
Morse said RISBA’s board came about not so much as part of a long-range plan, but more after it became apparent which individuals would be able to quickly “get the ball rolling.”
Morse was a member of the executive committee of the SBA Advisory Council. He said the Advisory Council did not have an annual budget, instead operating on a program-to-program basis. There is a small amount of money left in the organization’s coffers, he said. The SBA’s Rhode Island district office and the federal SBA office in Washington, D.C, he said, will determine the fate of that money.
For now, RISBA is busy soliciting members and is in the midst of various programs, including its sponsorship of “Minority Enterprise Development Week.”
It has been a busy few months – lots of legwork, and some expense. But long term, according to RISBA’s founders, it may prove to be worth all the trouble.
“The initial rules of the Advisory Council were pretty limited in scope,” said Lucier. “This new organization gives us more flexibility and its probably better off for the state of Rhode Island.”
