Grant breathes life into self-employment program

HER OWN BOSS: Lori Allen, right, Center for Women and Enterprise manager of corporate, foundation and government giving, gives a certificate of completion to Elaine Walle, who participated in a class at the center. / PBN PHOTO/BRIAN MCDONALD
HER OWN BOSS: Lori Allen, right, Center for Women and Enterprise manager of corporate, foundation and government giving, gives a certificate of completion to Elaine Walle, who participated in a class at the center. / PBN PHOTO/BRIAN MCDONALD

Rhode Island workforce-development leaders are broadening the landscape for entrepreneurs with the revival of a state program that allows some residents collecting unemployment insurance to create a new business instead of hunting for a job.
A $159,700 federal grant to the R.I. Department of Labor and Training announced in February breathes life into the Self Employment Assistance program that’s been on the books – and on the shelf – since the mid-1990s.
“The Department of Labor and Training can find no recorded instance of an unemployment-insurance claimant using the Self Employment Assistance option prior to the awarding of the grant last month,” said DLT spokeswoman Laura Hart.
So why has the option to develop a business plan and launch a new enterprise been lying fallow for more than 15 years?
“That’s exactly the question I had,” said DLT Director Charles Fogarty, who said he heard about the SEA program from colleagues in the National Association of Workforce Administrators.
The state program apparently sat idle for lack of funding, Fogarty said. Now the federal grant will spark life into the SEA program, with the launch anticipated in late March. The SEA program will utilize expertise in entrepreneurial training from the Center for Women and Enterprise and will collaborate with mentors from Social Venture Partners Rhode Island.
“It’s one more tool in the box on the public-sector side that may help some folks get back in the workforce,” said Fogarty. “With the high unemployment rate, we have to look at a whole range of strategies.”
Rhode Island had the nation’s third-highest unemployment rate in 2012 at 10.4 percent, behind Nevada at 11.1 percent and California at 10.5 percent, according to annual averages released by the U.S. Bureau of Labor Statistics on March 1. Rhode Island’s unemployment rate dropped to 9.8 percent in January 2012.
Not everyone collecting unemployment will be eligible for the program.
“Unemployed Rhode Islanders do not apply for the program on their own,” said Hart. “They are selected for invitation, based on a variety of criteria measuring their ability to benefit from the program.”
Part of the consideration will be related to the estimated time for collecting unemployment.
‘Those who are less likely to reconnect to the workplace through a traditional work search are those for whom SEA is a proposed alternative,” said Hart.
Details on notifying unemployed workers who are eligible are being finalized, she said. Those who demonstrate a commitment to pursuing an entrepreneurial path will be required to attend a “reality check” workshop, according to a Feb. 13 press release from the governor’s office.
Unemployed Rhode Islanders who think creating a business under the SEA program may be easier than finding a job will have to think twice. It won’t be about offering up a hastily sketched business plan.
“We do have to work within the time constraints of their unemployment benefits, so we’re asking a lot of these folks who are participating,” said Lori Allen, manager of corporate, foundation and government giving for the Center for Women and Enterprise, which will assist participants in developing a business plan. Women and men are eligible for the SEA program.
Formal training will be held Monday through Thursday from 9 a.m. to 1 p.m. Participants are expected to use the afternoon to work independently on the elements of their business plan, she said.
“Our regular business-planning classes meet once a week for 14 weeks,” Allen said. “We are asking SEA participants to do a lot of work in a short amount of time.”
The dates of the program are being finalized, but it will be condensed into a substantially shorter time frame than the regular 14-week program, Allen said.
“This is unique in that it allows participants to focus full time on starting their business, without worrying about meeting work-search requirements for unemployment,” Allen said. “Entrepreneurship is a full-time job and our expectations are that participants will treat the training just like a full-time job.”
After developing a business plan, participants will be matched with a mentor from Social Venture Partners Rhode Island, which assists businesses created with the goal of improving the community or responding to a societal challenge.
Individuals in the SEA group may be somewhat different from others who commonly tend to launch a business, said Social Venture Partners CEO Kelly Ramirez.
“These are people who are unemployed and may need to be reimagining a new career,” she said. “We will help them execute their plan.”
The federal grant is for operational costs and does not provide funding for unemployed residents who are participating, Hart said.
“This federal funding will help hard-working and entrepreneurial Rhode Islanders spur business creation and provide them support to turn their ideas into a successful business,” Sen. Jack Reed, D-R.I., said in the press release. Reed, according to the release, helped secure federal funding for SEA grants in the Middle Class Tax Relief and Job Act, which was signed into law by President Barack Obama in February 2012. According to the U.S. Department of Labor website, states that have an active Self Employment Assistance program are Delaware, New Jersey, New York, Maine and Oregon.
Fogarty said he heard about SEA programs in Oregon and Maine and sought information on how those programs operated.
“We wanted to see how it could be adapted to Rhode Island,” said Fogarty.
The Oregon program was spotlighted in the PBS television show “Need to Know” that aired Nov. 21, 2012. The program followed a few participants, including an airplane mechanic who was successful in starting his own company and hired three people, a caterer who hired three full-time and several part-time workers, and a tech company that hired nearly 100 employees, according to the “Need to Know” program transcript posted online. One of the startups highlighted in the show, an online service to locate pet sitters, was dissolved.
And while Maine has had its SEA program, Maine Enterprise Options, up and running since 2005, it was put on hiatus in 2012 for lack of funding to administer the program, said Julie Rabinowitz, spokeswoman for the Maine Department of Labor.
“We had about 2,600 people accepted into it,” Rabinowitz said. “They’re given a business-plan workbook and they can select from different programs to identify the training they need.”
Those in the program were able to get assistance from agencies including Women, Work and Community and the Maine Small Business Development Centers, and had online resources for training, she said.
The state recorded categories of common small businesses started under the SEA program, such as small-engine repair, property maintenance and bed-and-breakfasts, but there is no readily available data on which businesses are operating, Rabinowitz said.
“The administrative costs and technical assistance were coming out of Workforce Investment Act money, that was state money,” Rabinowitz said. “Because of budgetary issues, budget cuts were made and we lost significant discretionary funding.”
Rabinowitz said state officials are checking into possible options for federal funding to revitalize the Maine program. •

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