"I wish we could fund everyone – but no funder can." Kauffman's @nataliemself offers her insights on what may be helpful for entrepreneurship support organizations to know about grantmaking.
From left to right: Chief Grants and Compliane Officer, EpiCenter Memphis, Fayre Crossley; Senior Program Officer, Entrepreneurship, Melissa Roberts Chapman; President and CEO, EpiCenter Memphis, Leslie Lynn Smith; and Program Officer, Entrepreneurship, Natalie Self, attend the Close the Gap convening in 2017.
It was raining in Minneapolis. Unseasonably cold even for the Great White North; it mirrored the chill of Waltham, Massachusetts, two years earlier. Entrepreneurship support organizations (ESOs) – 115 staff members – representing organizations funded by the Kauffman Foundation as best practices in removing barriers to entrepreneurship across the United States gathered for two days of learning and community building.
I walked into the convening as a program officer, which in some ways felt like a world away from how I walked into the last convening in November 2017. Then, I was there in the capacity of a grantee, representing the St. Louis Equity in Entrepreneurship Collective, which had been awarded funding at the end of 2016. But from both convenings, I walked out feeling almost exactly the same: entrepreneurship support organizations are critical to our American economy, and they are sorely under-supported.
Entrepreneurship support organizations, broadly defined, are groups that support, train, and sometimes fund entrepreneurs. They are based in local colleges and universities, government agencies, independent for- and nonprofit organizations, and sometimes in other public-serving institutions such as libraries or healthcare facilities. Their job is to help current or aspiring entrepreneurs move closer to starting or growing a viable business.
With entrepreneurship being responsible for most net new jobs in the United States, business starts and growth are not optional for our communities. As traditional economic development continues to chase headquarters, entrepreneurship matters. For our communities that have been systemically left behind by corporations and local government, entrepreneurship has been the easiest option – and no one calls entrepreneurship easy.
We’ve learned so much from the ESOs that we work with – many of those lessons will be featured in a forthcoming report. One key lesson is that the most effective ESOs provide resources around the whole entrepreneur. Not just in the areas of opportunity, funding, and know-how, but support, as well, creating spaces where entrepreneurs feel safe enough to take risks and be vulnerable. Our best entrepreneur support organization leaders, nationally, are also willing to take on the extra work of building an organizational infrastructure to support entrepreneurs. They are building businesses and building the infrastructure to help others do the same. This is a huge lift.
The job of an ESO is complex because entrepreneurs need more than just knowledge or relationships to be successful. Add in the resource-constrained environment ESOs operate in, and it feels untenable sometimes. Sure, funding is tight for all organizations with a charitable or social benefit purpose, but for some context – the 2019 Inclusion Open request for proposals received 777 applications from 42 states and two territories. As I think about the pool of applicants in aggregate, the thing that strikes me the most is how many of them were strong, local programs who served the needs of their towns. They were doing foundational entrepreneurship support, and in the absence of adequate local funding resources, they turned to a national foundation for support.
Organizations that operate in every city and town in America are being asked to do a lot with very little. As a result, funders and local governments have created an environment where our entrepreneurship support organizations are themselves facing many of the same issues as those they serve. As they talk to participants about variable cash flow, they are thinking about the numerous grants they are juggling. When they advise on customer discovery, they are deciding which of their programs will deliver the most impact. While connecting entrepreneurs to reputable bookkeepers, they are trying to set up their own back office functions. The lack of consistent funding keeps ESOs from focusing directly on the reason they do the work – directly supporting entrepreneurs. Local funding is critical to ensuring that communities can grow their own entrepreneurs.
I wish we could fund everyone – but no funder can. In the absence of that, I offer my perspective on what one program officer wishes more ESOs knew about the process of funding, particularly grant funding.
Have you listened to entrepreneurs to hear what their challenges are?
Do you have a solution to help them with those challenges in a way that takes into account who they are and where they come from?
What have you learned from that?
As for the 50 organizations who have received Inclusion Open grants since 2015, they have collectively served 12,242 entrepreneurs. Of those served, 69% grew their businesses’ revenue, and while not every entrepreneur needs or wants to raise capital, 31% did. The impact all ESOs have on removing barriers for entrepreneurs, especially from communities that have been systemically left behind, is immeasurable.
I believe our grantees are among the best ESOs in the country. But I know they’re not the only ones – and I hope those ESOs and their local funders, know that too.