A major resource for women entrepreneurs in Rhode Island is facing a fiscal
crisis, with one-quarter of its roughly $507,000 budget in peril due to a federal
funding cut.
The Center for Women & Enterprise Rhode Island, part of a Boston-based nonprofit, has helped 116 clients secure $13 million in business loans since its opening in January 2000, according to director Carol Malysz. In addition, the center has provided technical assistance, training and mentoring to hundreds of women, and fostered the creation of 2,250 jobs with $65 million in wages.
Now, however, the center is among 53 nationwide slated to lose their $150,000 annual SBA grants.
“Without federal money,” Malysz said, “it would be very difficult to continue to operate.”
The organization has two additional centers, in Boston and Worcester. All three sites rely on Small Business Administration grants for women’s business centers under a program established in 1988 that provides five years’ worth of seed money: $150,000 annually for each site. The home office in Boston is also in line to lose its SBA grant, but the impact would be far smaller, said CEO Donna Mullen Good.
The agency’s Worcester center is still in its first five years of startup funding.
Karen Hontz, deputy director of the SBA’s Office of Congressional and Legislative Affairs, said the SBA’s goal is for centers to be self-sufficient after five years. A “sustainability” program has continued to provide money for successful centers beyond that five-year term, but SBA Director Hector Barreto hasn’t been supportive of that part of the program. Now disagreements in Congress have left the SBA with the funding and legal authority to provide grants only for 34 existing centers, along with any new ones.
When Congress considered extending the SBA’s funding right before its July 23 recess, two key votes were blocked by individual House members. The first would have extended the authorization of the program and put 48 percent of the $12.5 million budget into the “sustainability” part – for grants of about $115,000 to $125,000 per site. The second would have provided 30.2 percent of the budget, or about $70,000 to $80,000 per center. Congress could still restore the funds when it returns on Sept. 7, but if it doesn’t act by Sept. 8, according to the SBA, what remains of the budget would have to be used to open eight new centers, in addition to 21 others already slated to open this year.
A memo from leaders of the Association of Women’s Business Centers to the members describes the chances of saving the federal funds as “slim.” U.S. Rep. Nydia Velazquez, a New York Democrat, who blocked the first extension vote, issued a statement in response to a Providence Business News inquiry saying she would support an extension, but she was frustrated that a full reauthorization of the program had been stalled for a year – blocked, she said, by the House Republican leadership.
“The House has yet to take up the comprehensive SBA reauthorization bill (HR 2802), which would improve access to capital, open the federal marketplace and strengthen the WBC program,” she said. “My hope is that rather than pass extension after extension, we will finally adopt HR 2802 when Congress comes back into session. This reauthorization is integral for the future of small firms – if we want to ensure that this vital program continues to operate for the success of our nation’s women business owners, then we need to pass the SBA reauthorization.”
According to the SBA, women business owners are “critically important” to the U.S. economy, employing 27.5 million people in 9.1 million businesses and contributing $3.6 trillion to the economy. Last year, the nation’s women’s business centers served more than 106,600 clients, including many low-income women and women of color.
At the Center for Women & Enterprise’s Boston headquarters, Mullen Good said she and her colleagues are mobilizing to try to save the federal funds by aggressively lobbying Congress. On the home front, Mullen Good is also alerting the center’s supporters to the plight of the Providence site.
“Providence is probably the outstanding CWE office,” she said. “Carol Malysz is a brilliant director, and it’s a shame above shames that this is happening.”
The crisis is even more serious, Malysz said, because the Providence center’s state support is also in jeopardy. The center’s current budget includes $150,000 in state money, she said, “but we’re not certain that we’re going to get state money this year” because of the state’s own financial woes.
What’s left, Malysz said, is smaller grants and private support. On Sept. 9, the center is holding a fund-raiser, aiming to raise $40,000.
“We are asking for support from corporations, individuals and foundations, we’ll continue to ask for their support and we’re hoping that we’ll be able to make up the difference,” she said. “But we still would like to be an SBA-supported program.”
