| Greetings!
Please welcome Marian Doub to our firm! Marian is nationally respected for her expertise in building high-integrity systems for measuring client and program success and promoting best practices. Marian has worked as the Research and Evaluation Manager at Women's Initiative for Self Employment, has consulted with the Aspen Institute and worked with dozens of MDOs and CDFIs to build capacity. Check out her article below on Successful Practices in Measuring Success!
Thanks for stopping by!
Jason Friedman, Publisher, All Things Microenterprise Development |
| What's Your State's Microenterprise Score? |
Check out CFED's Assets & Opportunity Scorecard which measures the financial security of families in the United States by looking at the whole picture of asset ownership and protecting against financial setbacks.
CFED asks the question, " Is the opportunity to work in a high-quality job or to start and grow a business available for all who seek these opportunities?" Click here to see how CFED assesses your state, especially in terms of microenterprise development.
Got a good grade? Do the following: (1) Get out a press release and tie your work to the Scorecard and follow up with a call to your local newspaper and TV stations. Have a Facebook page?; (2) Send out an e-mail blast to your funders, stakeholders, partners, and clients with a link to your state's page on CFED's website and grade in microenterprise. Emphasize your role in small business retention and creation; and (3) Create some simple talking points for staff and board to use when they are out in public.
Got a poor grade? Don't despair! Bring your state's poor grade to the attention of your state legislators, economic development officials, and key supporters. Tell them how relatively small investments in programs like yours lead to new and retained businesses, jobs and assets! |
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Successful Practices in Portfolio Management |
 We're working with microlenders and CDFIs to address portfolio management challenges as a result of the recession. We recommend they read a recent article by Nancy Andrews, CEO of the Low Income Investment Fund, that was recently published in The Economic Crisis and Community Development Finance: An Industry Assessment by the San Francisco Federal Reserve.
In Strength in Adversity: Community Capital Faces Up to the Economic Crisis, Nancy focuses on the coping strategies of CDFIs trying to survive the current environment. Nancy interviewed CEOs of CDFIs and found they are experiencing higher risk (as evidenced by increased delinquency, loan loss provisions and loan extensions) and decreased liquidity (caused by the confluence of increased delinquency and decreased access to capital). Nancy posits (and I agree) that you must communicate to donors that immediate help is vital in order to guarantee that our organizations will continue to operate in the mid-term. In addition, she suggests:
- Forecast the worst case scenario: How long can you operate with severely diminished repayment? Funding? Complete stress tests around these two areas. For instance, assume a much lower repayment rate or loss of key funders. How long can you operate if either scenario comes to pass? Work to deflect that worst case scenario.
- Determine future risk: It's time to conduct a portfolio review and determine what percentage has low Debt Service Coverage ratios. This ratio relates the borrower's net income (before repaying the loan) to the loan's monthly payment. If the ratio is low, a minor decrease in income can be catastrophic to the borrower and may jeopardize the loan. You may also want to determine what percentage of your portfolio is completely unsecured vs. that which has cosigners. If you notice that you have a large percentage of unsecured loans, loans with low Debt Service Coverage ratios or loans with high LTV ratio, you should consider changing the underwriting requirements.
- Review your underwriting standards and your decision-making controls. Talk to us about how to help you re-assess your underwriting standards and review your internal operations.
- Learn to conduct work-out and restructures. We can help you develop strategies for saving loans as well as to avoid delinquency.
- Contact borrowers as soon as they miss payments.
- Focus on fundamentals: Increase your net worth through capital campaigns and decreasing costs; make sure that you have adequate liquidity; and budget a surplus so you can tackle mistakes and emergencies.
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| National Survey on Struggling Families Makes the Case for Local Small Business Support |
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I was fortunate recently to work with the Northwest Area Foundation on the release of Struggling to Make Ends Meet, a survey they commissioned that asked adults across the U.S. how they see the struggle to make ends meet within their homes and communities.
You should use the survey results to emphasize that your work is more important than ever and that you are addressing the issues facing your clients and the people in your community. In the section on "Jobs and the Economy," the survey of 4,000 individuals revealed that:
- Nearly 70% of those surveyed are worried about the economy and nearly 30% say they have seen someone in their household lose a job or get laid off in the past year. Thirteen percent say they themselves are unemployed.
- More than 80% say that it should be a top or high priority for local elected officials to keep and attract more businesses that have good-paying jobs.
- Nearly half (49%) say they don't know where to turn in their community for help.
- Half, 51%, say the government is doing too little to help.
The economic crisis continues to dominate legislative focus and news coverage. Policy makers play a critical role in shaping policy and funding decisions that directly affect your organization and the people you serve. Struggling to Make Ends Meet offers an opportunity for you to build, or initiate your relationship with policymakers and provide them with valuable information on the issues important to both of you.
Elected officials want, and need, to hear from their constituents regarding issues they will ultimately have to make decisions about. This survey should be important to them because it includes data on what people say they want from their elected officials and what issues motivate them to vote one way or the other.
For the full survey results, as well as helpful tools to guide you in using the survey findings to establish value-based relationships with your local, state and national elected officials, go to the NWAF website at www.nwaf.org |
| Successful Practices in Measuring Success! |
 Outcomes - mission-defined benefits or changes for individuals or communities that occur during or after program participation - are the new bottom line for nonprofits and agencies charged with serving the social good. In addition to attracting more funding and resources, outcome-driven organizations are also leaders with the knowledge needed to innovate and implement evidence-based changes to better serve their communities and target customers.
Here are a few successful practices as you build or improve your systems for measuring success:
- Define Success on Your Terms: The core of this process is to define success by selecting indicators (data points) and describing relationships that show your outcomes. Use tools such as theory of change, logic models, visioning and context mapping, and longer term outcome indicator definitions and questions.
- Do Not Reinvent the Wheel: There are many effective tools and resources for managing outcome data and analysis - from online outcome measurement capacity building tools (see innonet.org, liveunited.org, aecf.org) to databases (VistaShare, Efforts to Outcomes) to outcome tracking products and services like MicroTest or SuccessMeasures.
- Be Practical and Useful: Pilot, pare down and use only what you need to know vs. what is nice to know. Include outcome indicators required by donors, benchmarks for your field, and a few that describe your unique contribution. And stop there. In a mature system, the focus is on using the data and not on collecting it - from information management to knowledge management.
- Invest In & Sustain Systems: TechAtlas suggests that organizations budget 10 percent of annual resources for Management Information Systems that support outcome measurement - 70 percent for staffing and training, 30 percent for fees, hardware and software.
Knowledge created by clients, staff and other allies is powerful. We look forward to learning more about and improving how you measure success! Free free to e-mail me at marian@friedmanassociates.net or call at 415-730-1873. |
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| What's your Business Retention Strategy? |
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We're all clear on the case for starting a microenterprise in a recession - higher unemployment rates that turn displaced workers into owners; additional income to support wage employment, etc.
But we also know that a robust and relevant microenterprise program must also have an intentional and outcomes-based strategy for business retention. Whether we have "skin in the game" with a loan or not, we have an obligation to help our clients strengthen and stabilize their businesses.
We believe the key word here is "intentional." Create a Business Economic Recovery Team, for example, and offer to assess the current health of your business clients and re-package and/or re-tool some of your workshops to focus on strategies to stabilize businesses in tough time. Above all, call your clients and let 'em know you are there for them!
Use this as an opportunity to remind your donors, partners, and stakeholders that you are market-focused and prepared to be a leader in the economic recovery of your community! |
| Stand Up and Be Counted! |
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The Aspen Institute's FIELD program, in partnership with the Association for Enterprise Opportunity (AEO) and state microenterprise programs (SMAs), is launching a comprehensive survey of the U.S. microenterprise field. The goal is to produce updated, quantitative information on the scope and scale of the industry, and to track the evolution of its products and services.
The data you contribute will be published in a directory of programs and accessible online.
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| Local Study: Microbusiness Generate Twice the Economic Impact of Big-Box Retailers! |
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Check out Thinking Outside the Box: A Report on Independent Merchants and the Local Economy, which was conducted by Civic Economics. It examined financial data from 15 locally owned businesses which sell a wide variety of goods on Magazine Street, a vibrant, traditional business district in the heart of New Orleans. For comparison, the study analyzed revenue and expenses at an average SuperTarget store.
The study found that only 16% of the money spent at a SuperTarget stays in the local economy, primarily in the form of wages paid to local employees. In contrast, the locally owned retailers in the study returned more than 32% of their revenue to the local economy, in the form of local wages and profits, as well as goods and services purchased from other local businesses! |
| Welcome New Clients and Partners! |
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Let's Talk!
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Friedman Associates can assist you in strengthening your training and loan programs, develop a strategic plan, and create capacity in communications and fund development.
We work closely with staff at all levels of your organization to ensure that you have the tools and skills necessary to maintain and adapt your goals and objectives.
Call us for a free consultation at319.341.3556. | |
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