Carolina Small Business Development Fund is celebrating its 30th anniversary in 2020. To kick-off those celebrations, CSBDF’s President/CEO Kevin Dick offers a retrospective of our past and a preview of how we’re working to ensure the long-term success of the region’s entrepreneurs.
In the world of community and economic development, a lot can happen in 30 years. The North Carolina of 2020 looks much different than it did in 1990. A globalized and interconnected economy has transformed how many businesses operate and created economic prosperity for many. But these trends have also showed how economic development can be uneven. At this point there is overwhelming data that small businesses and entrepreneurship are vital for economic growth, especially in terms of sustainability and equity. Beyond their economic contributions, nothing can replicate the value that Main Street entrepreneurs bring to local quality of life.
Where We’ve Been
Similar to the state, the CSBDF (then the North Carolina Minority Support Center) of 1990 looks very different compared to the CSBDF of 2020. We began our work as a provider of assistance and capital to local community banks and credit unions. A few years later the organization became a certified Community Development Financial Institution, a designation which we have retained ever since. Through 2008 we provided millions of grants to help local financial institutions provide services to disadvantaged individuals and places.
Though we had long noted how small businesses were integral to community economic development, their importance was cemented during the Great Recession. As the country’s banking institutions tightened credit access, we were front-line witnesses to the invaluable role of Main Street firms. Though the financial crises was hard on North Carolina’s economy, there is evidence it could have been worse if not for the state’s vibrant small business community.
Many community nonprofits support North Carolina’s robust entrepreneur ecosystem, but few statewide entities serve small firms in a holistic manner. Providing affordable credit to small businesses is important. Yet we know to be truly successful those activities must be backed by other forms of support. This includes both comprehensive technical assistance for clients and objective policy research that empirically demonstrates the value of small firms to policymakers.
In 2011 we issued our first direct loan to a North Carolina small business entrepreneur. The rest, as they say, is history. In the intervening years we’ve been proud to expand our efforts by opening satellite offices throughout the state and founding three entrepreneurship centers. Our programs are available to all, but we have a passion to help individuals (veterans, racial minorities, women) and places (rural communities, disaster-affected areas) that face structural challenges to small business success.
What We’ve Done
We think the below data speak for themselves. While we’re proud of the impact these numbers show, we’re also proud of our efforts to ensure the data are collected and analyzed in a way that is transparent and accountable. CSBDF’s organizational structure enables research staff to retain editorial independence over all reports and program evaluations, which help ensure data integrity.
Affordable capital. Since beginning revolving loan operations, CSBDF has injected tens of millions in affordable capital throughout the region. Clients receiving those loans report they have hired thousands. CSBDF publishes our definitions for job creation and retention in order to show how we derive these numbers. As we’ve previously shown through economic impact analysis, on average each loan helps generate $224,383 in earnings and $20,755 in taxes.
We conduct follow up surveys of small business owners that receive loans from us. Highlights from the 2019 version of the survey show how affordable finance contributes to community economic development. And as always, our research department’s independent evaluation of the data has been publicly released for the sake of transparency.
If we’ve done our job right, the entrepreneurial ventures we fund will grow and become more financially stable. While we love helping clients with multiple loans as their business needs change, its exciting when they “graduate” to working with commercial banks. When the small businesses who receive loans from us have future credit needs, an overwhelming majority report securing financing from traditional sources.
Trusted business guide. A total of 10,795 participants have attended a CSBDF hosted workshop, group training session, or conference since 2017. And so far in fiscal year 2019 our events have hosted 1,916 participants. Each year, hundreds of individuals receive customized one-on-one counseling from our staff across the state. So far in fiscal year 2020, our staff have worked to assist 322 clients through coaching. Reflective of our holistic approach, assistance programs are tailored to local needs. For example, we offered disaster recovery and resiliency planning in the wake of Hurricane Florence. In the coming years we will continue to adapt our programs to the changing needs of the state’s economy.
How We Got Here
Community support of Main Street entrepreneurs. Sustainable economic development is a team sport, and neither the scope nor scale of our impact would be possible without CSBDF’s many supporters. For years we’ve been fortunate to receive appropriations from North Carolina’s state government, but we have not become fully dependent upon those appropriations. Our success is also due to the community institutions who partner with us in support of small business. That support comes in many forms – through donations, grants, sponsorships, and non-financial partnerships. In just the past few months we’ve been honored to receive multiple grant awards from the Small Business Administration for over $300,000 to support technical assistance and women’s entrepreneurship. Prominent financial institutions like Southern Bank have also recently provided $50,000 in operating support grants.
Openness and accountability. Like most non-profit organizations, we provide annual reports of our activities as well as our audited financial statements. But that isn’t enough if we want to live up to our organizational values of transparency. Independent financial and performance evaluation audits have affirmed CSBDF’s organizational capacity. CSBDF has voluntarily submitted to annual financial and program assessments since 2013. These assessments are conducted by a leading rating and information service. Our Aeris rating from July 2019 included:
- A three-star impact management rating, highlighting a strong degree of alignment between CSBDF’s mission, programs, and research activities.
- We received a BBB financial strength and performance rating, which demonstrated analysts felt CSBDF has satisfactory financial strength, performance, and risk management strategies.
- A policy plus rating, recognizing our efforts to shape community development policy dialogues in a positive manner.
Where We’re Going
As we look toward the next 30 years, we are ever reminded of how the past few decades have shaped our mission. Though our goals have evolved over the years, our core intent remains the same: promoting community-based economic development in a way that is efficient and effective. More than ever before, we know that the primary way to uplift distressed areas is through small business and entrepreneurial growth. And we know that the effects of our work are wide-reaching. Over the next 30 years, we want to make sure that every North Carolina small business owner and aspiring entrepreneur has the tools they need to succeed.
The work of sustainable community economic development is not easy. If it were, small business owners would not have to face such persistent challenges to success. But we are inspired and invigorated by the entrepreneurs we serve every day. There is much more to come from us as we celebrate our 30th anniversary this year. The story of Carolina Small Business has many chapters, and this newest one is just beginning. Come join us on our mission to be dream catchers. If you’re as passionate as we are about small business growth, I hope you’ll join us as we gather to celebrate the triumphs of entrepreneurship and give a glimpse of the future during our 8th annual Small Business Weeks Awards Luncheon on May 4.