Who's Looking Out for SCORE?
The beleaguered SBA says it can't afford to keep SCORE services free
The Service Corps of Retired Executives (SCORE), known for helping out
cash-strapped entrepreneurs with free advice from former business
leaders, is having cash-flow problems of its own. And that could force
SCORE chapters to charge for some of their popular programs which
serve 300,000 people through some 5,000 workshops annually, the upcoming
print edition of Business Week frontier reports.
Each year, Congress doles out $5 million to the group's 389 chapters,
staffed by ex-execs who dispensed 1 million hours of consulting advice
during 1998. The Small Business Administration has typically helped pay
for chapters'administrative expenses, such as photocopying, advertising,
travel, and Internet access. Now the SBA says it can't ante up its
latest chunk $400,000 worth.
While expressing regret for putting a burden on all-volunteer SCORE chapters, an SBA spokesman argues that the additional funding has always been discretionary. What's more, says the SBA, the agency needs the dollars to cover its own basic operations.
Cutting funding to the popular SCORE program won't improve the SBA's
standing with Congress. The agency is already in the doghouse with
lawmakers for alleged mismanagement of funds, and is under political fire
from Republicans for requesting $85 million to fund President Bill
Clinton's "New Markets Initiative" for inner-city entrepreneurs.
Republicans see the latter as a pre-election boondoggle for Democrats.
As a result, Congress has taken steps to drastically cut SBA funding in
the fiscal year 2000 federal budget.
The move has already drawn the ire of Senate Small Business Committee
Chairman Christopher "Kit" Bond (R-Mo.). In a letter to SBA
administrator Aida Alvarez, he warned the shortfall "will create a
severe hardship to SCORE services and the Main Street businesses that
use it." Bond wants the SBA to cut spending elsewhere to keep SCORE
SCORE executive director Ken Yancey says most chapters receive $500 per
year from the SBA, with the largest groups taking in $4,000 to $6,000.
"It's a small check," says Yancey, "but it's important to our chapters."
In particular, says Yancey, the money reimburses travel expenses of
volunteers who conduct on-site visits with entrepreneurs one of SCORE's
bedrock services. To help fill the gap, Yancey says SCORE is soliciting
corporate sponsorships from the likes of Visa and Bank of America.
Yancey stresses the picture isn't completely bleak for those who count
on SCORE's bargain help. Much of the group's traditional one-on-one
consulting has moved to the low-cost Internet, where it fields more than
6,000 questions per month. "No one's going to shut down over this," adds
Still, the mood at the SCORE chapter in Miami, in Dade County, wasn't
optimistic. Without the SBA's help, the group's volunteers may have to
pay for newspaper advertisements out of their own pockets. To cover
other sundry expenses such as postage and photocopying, chapter Chairman
Louis Garcia is contemplating tacking on a small fee to the group's
introductory meetings on entrepreneurship. "We have free seminars three
times a month that draw 60 to 70 people," says Garcia. "If we start
charging, it's going to get down to 15 or 20. I don't like the idea."
In Tyler, Texas, SCORE director Perry Smith says that without the SBA's
$1,000 check, his chapter will put off buying business software for
training entrepreneurs. Luckily, his office is housed at a local
community college, which provides free rent and telephone. "If we had to
provide for rent and telephone, we'd have to shut down," he predicts.
Absent money, some of SCORE's retired execs are relying on humor to
cope. The Tyler chapter has concluded that money that would have been
SCORE's was spent for a more pressing need, Smith says. "The government
spent all the money on the Monica [Lewinsky] situation," he jokes.
By Dennis Berman in New York