Case #C Wisconsin Women s Business Initiative Corporation ( WWBIC )

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1 Case #C Wisconsin Women s Business Initiative Corporation ( WWBIC ) Mission The Wisconsin Women s Business Initiative Corporation ( WWBIC ) is a leading innovative statewide economic development corporation with a social goal to improve the economic well-being of targeted individuals by building assets and advancing selfsufficiency. WWBIC opens the doors of opportunity by providing people who are interested in starting, strengthening or expanding businesses with access to necessary resources and tools, such as quality financial and business education and responsible financial products. It focuses its services on individuals who face barriers in accessing traditional financing or resources primarily women, minority, and low-income individuals. History and Background WWBIC just recently celebrated its 27 th anniversary. Through its lifecycle, the Agency has helped 1,000 s of fledging businesses, countless entrepreneurs, many first time homebuyers, and provided hours of financial and business education to assist the economic development of the citizens of Wisconsin. WWBIC provides three distinct service lines: Workshops Over the course of the year, WWBIC has up to 3,500 attendees in one or more of its 450+ workshops. Topics include small business exploration, business planning, operations/accounting, marketing, and personal money management offerings. These interactive workshops not only provide quality content, but also provide an introduction to WWBIC s financial products. Many of the workshop attendees do not seek other services/products from WWBIC. Business Loans Currently, WWBIC receives approximately 600 small business microloan applications a year and underwrites approximately 150 to 200 new loans annually. The current portfolio consists of approximately 500 outstanding loans totaling $10 million. WWBIC is the state s largest micro lender. Average loan size is $35,000 and the term is about 5 years (see below for further statistics on this program). Individual Development Accounts (IDA) This financial product is a matched savings plan for low-income clients seeking to increase selfsufficiency via the purchase of a qualified asset such as a first home, postsecondary education, or starting a business. Each deposit made by a client is matched by WWBIC. Currently, WWBIC has approximately 150 active IDA accounts and brings on approximately 40 to 50 new IDA accounts annually. Average length of time a client holds an IDA account is two years (see below for further statistics on this program). Wendy Baumann has been the President and CVO (Chief Vision Officer) for 21 years. Her background is well grounded in the mission of WWBIC. She is well respected within the greater Milwaukee community, nationally, and internationally for her work in the microcredit industry. Due to her leadership, the organization has expanded tremendously during its lifecycle (from a $200,000 budget and staff of one 1

2 in 1994, to an organization today with 48 employees and a $4.9 million annual operating budget). Annually, WWBIC has a gala fundraiser with approximately 1,000 attendees that features a client trade show, and has attracted internationally known keynote speakers. Current budget for the Agency is approximately $4.9 million. Revenue is derived from multiple streams including public (government), private (foundations, corporations, wealthy individuals), and earned revenue (including fees for service, loan interest/fees, and social enterprise efforts such as its Coffee With A Conscience café). They have four offices, 48 employees, and service a statewide footprint. Client issue WWBIC is seeking to develop a robust client feedback system as part of its strategic plan. Its desire is to obtain consistent feedback with a significant response rate from its clients. It is seeking a model that will allow them to capture the impact of the services/products provided, i.e., not just the number of clients serviced and the dollar value of the loans/ida accounts issued/serviced. Impact would include such things as new jobs created, sales/revenues generated from businesses started/expanded, standard of living raised, etc. The client s goals for this area go far beyond the traditional client satisfaction survey that is currently employed. (See below) Current business model Currently, WWBIC collects data from workshop attendees. The survey provided is a 5- question survey administered at the end of each workshop. The questions include: Did the workshop help you? How could the workshop be more beneficial to your needs? Do you believe you will attend another workshop hosted by WWBIC? Annually WWBIC sends out a survey to approximately 1,200 of more than 4,000 clients. These 1,200 are selected based on the number of contacts WWBIC has with the client. For example, a client that only attended one workshop would not be placed in the survey pool. WWBIC is intent on obtaining the richest information they can from the clients it serves. However, even with this specific selection process, the response rate is approximately 12%, which WWBIC believes can be significantly improved through more modern and interactive methods. (See below under SWOT) While WWBIC does conduct this annual survey, it does not ask its clients questions related to the specific services on a real time basis, i.e., closer to when the services are rendered. For example, WWBIC is interested in obtaining client feedback on the performance/responsiveness of its loan officers immediately after a client closes a new loan; feedback on any one-on-one business assistance received. Both these examples require real time responses. Because of funder expectations, WWBIC also collects signed forms from its clients that validate information about the client s business and the number/types of jobs that the business created. This is currently collected in a manual, one-on-one basis by the staff throughout the year. 2

3 WWBIC does have the technology to implement suggested changes to its client survey methods; however, it struggles with the means to harness the data, how best to acquire the data, what data makes the most sense to acquire for their funders as well as internal planning, what data its clients will be able to provide, etc. More specific to the product lines that WWBIC has, the following is presented: Workshops As noted above, WWBIC provides workshops to approximately 3,500 attendees on an annual basis. The fee for these programs ranges from free to $300 (for their multi-session business planning series). Many of the attendees will attend one or two classes and then disappear, having received the information they were seeking. Others will work with WWBIC more closely to secure a financial product or individualized assistance. Still others will not partake in the financial products offered but will still take a litany of courses. Business Loans The average size of the loans granted is about $35,000 with a maximum loan value of $100k. Loans in excess of $100k can be written but require special processes and guarantees plus additional approvals both internal and external. The maximum length of the loans is five years (i.e., the loans are written with five year term payouts) but the clients can pay off the loans faster. In special cases, WWBIC will extend a client s loan beyond five years. As a result, the portfolio of loans is constantly changing with 150 to 200 coming on board and a similar number being closed out as paid in full or charged off each year. Unique to WWBIC s loan product is that each borrower is assigned a staff member who serves as his or her Small Business Consultant for the life of the loan at no charge. This staff member is a guide and resource to the client as business issues and problems arise. IDA The average length of time a client has an IDA account is approximately two years. During this period, when the client deposits funds into the IDA, WWBIC matches the funds 2:1 or 8:1, depending on the specific program. Further, the clients must attend specific workshops to increase their financial literacy. The goal of the IDA program is to allow the client to purchase a meaningful asset, such as a house (first time homebuyers) or start a small business to increase their financial sustainability, or pay for post-secondary education. All IDA clients are required to take a specific workshop and complete the workshop questionnaire. o During the most current fiscal year, WWBIC was awarded a contract with the State of Wisconsin. The program, which is entitled PROMISE, is a collaborative to assist youth with disabilities receiving SSI payments to increase their (and their families) financial literacy and have the ability to secure a job. WWBIC s role in the collaboration is to open 1,000 IDA accounts over the next four years and provide financial capability support. Except for the workshop survey, the responses received on the annual survey and forms it collects, WWBIC only has anecdotal data on the impact of its services. It admits to having no data on the effectiveness of the financial or business coaching it provides. The organization has developed to a point in its lifecycle that having specific empirical data is necessary for the next step of its organizational evolution. 3

4 The demographics of the average WWBIC client are as follows: Average age of the overall client base 43 years old Overall client base is 69% female Overall client base is 53% minority and 67% low to moderate income Loan borrowers are approximately 45% female/55% male Close to 100% of IDA clients are included in a designated minority (mostly African or Black Hispanic American) Madison office has the largest percentage of Spanish speaking clients Milwaukee, due to its size, has a more diverse client base 76% of this office s client base is in a minority designation. Strengths, Weaknesses, Opportunities, Threats (SWOT) Strengths WWBIC has the technology infrastructure to support a revamped and robust client feedback model. It currently uses a database software called Outcome Tracker created by VistaShare LLC. This product was specifically developed for the types of services and products offered by WWBIC and other similar organizations. The software is cloud-based and is able to complete many of the Small Business Administration (SBA) reports required to be completed by WWBIC. One of the tools within the software is an ability to send surveys and then populate the client data based automatically once the client responds through the Web. WWBIC is a leading provider within the state of Wisconsin assisting the population that needs the services and products it offers. Its reputation is stellar. Due to its longevity and ability to document success and tell their clients stories, the organization and many of its key staff members have received numerous awards and recognitions statewide and nationally. WWBIC has a strong and seasoned staff; many employees have come from the private sector and have significant business skills, which, in turn, it applies to running a solid organization as well as to sharing with their clients. Weaknesses/Challenges/Threats As with any not for profit, bandwidth is an issue. Any client feedback system must be designed in a way that can be implemented with the least amount of dedicated staff time. WWBIC serves clients that are mono-spanish speaking. Approximately 10% to 15% of its clients fit this profile. As a result, WWBIC must deal with cultural issues that could affect the sort of information it seeks to gain from its clients. Many of its clients do not have regular access to , therefore, while the Outcome Tracker software is Cloud based, WWBIC struggles with how it notifies its clients itwishes to survey that a survey is available for them. Due to the low response rate currently being experienced, WWBIC believes that its survey questions are possibly too difficult to answer. However, since WWBIC is looking for empirical data that is more than just how was the experience, it currently struggles with these two elements seemingly be at odds with each other. 4

5 Since tax returns do provide a wealth of information about financial results, WWBIC needs to create a way its clients will provide its tax returns willingly. (It is noted that for those clients with outstanding loans with WWBIC, an annual tax return is necessary as part of the loan covenants.) o To this end, WWBIC needs to be able to cull and summarize the data from the tax returns for purposes that reach beyond loan covenant requirements. Impact results are illusive, even for an Organization that deals in impact results daily. As noted above, all borrowers are required to provide annual tax returns. WWBIC struggles with ways to cull effective and useful data from the returns and other data obtained from its clients. Since a significant portion of WWBIC clients do not have ready access to the internet, responding to information that is transmitted over could prove to be next to impossible for some of WWBIC s clients. In addition, rural clients face Internet speed and connectivity issues. It is noted that rural clients are a growing percentage of WWBIC s overall client base, therefore, connectivity issues must be addressed. Data received through the annual survey is often times not consistent, meaning, for example, a client will respond in year 1 but for a whole host of reasons will not respond in year 2 or beyond. As a result, data collected through the annual survey is almost akin to single data points and not data that provide a pattern. WWBIC suspects that the questions it is asking on its annual survey are too difficult for its clients to respond to due to the nature of the information it is requesting and the level of financial literacy the clients possess. However, many of these questions are required by WWBIC s funding sources. Opportunities WWBIC is in the middle of implementation of its Strategic Plan It iswilling to dedicate resources to being able to collect and measure impacts of its work, including: Job Creation Businesses Started, Expanded, or Strengthened Increased Individual Income Increased Assets (personal and business) Higher Credit Scores Individual Achievement of Personal Financial and Entrepreneurial Goals Increased Individual Financial Acumen Economic Self-Sufficiency through Less Reliance on Public Assistance Community Stabilization through Business and Home Ownership Social Responsibility The current governor of the State of Wisconsin has proposed to merge two large economic development Agencies (Wisconsin Economic Development Corporation and the Wisconsin Housing and Economic Development Authority) 5

6 to streamline operations and increase efficiencies in business development statewide. WWBIC has strong relationships with both these Agencies. Kiva Zip ( recently launched in Milwaukee. WWBIC is a trustee and supporter of the effort. The potential increase for more entrepreneurs to access crowd-funded sources is a positive for the community, whether they finance in conjunction with WWBIC or if they come to WWBIC s programs after their Kiva Zip loan retires. Wisconsin has a lower unemployment rate than the national overall rate and had such even during the height of the Great Recession. Because of the points above, WWBIC, as one of the leading providers of financial products for women, economically disadvantaged, and people of color is positioned to be a leader in the overall economic development of the State. Call for proposals Because of WWBIC s desire to create a robust client satisfaction tracking system, the client has issued an RFP for consulting services. You are one of the 6 competing firms that have been asked to provide it solutions and suggestions to assist it in this endeavor. The parameters of the RFP are as follows: Develop survey questions that would enable WWBIC to gather appropriate financial and impact outcome information necessary to determine impact/outcome of the services provided over time. Redraft questions to update the workshop surveys. Suggestions should also include how this information could most easily be collected in electronic format, making analysis easier. Suggest ideas for a new just-in-time feedback system and questions to gather customer satisfaction information shortly after services are delivered (specifically designed for loan borrowers and IDA account holders). Suggest how information from clients could be collected differently than how it is currently being collected Provide workable suggestions that will allow non-internet or slow Internet connected clients to address the surveys sent out. WWBIC believes that its annual survey selection method is very outdated and does not allow for proper statistical coverage of its client base. As noted, it is selecting survey recipients based on number of contacts but with a 12% response rate, it is only receiving approximately 140 to 150 surveys, which may or may not be the best or most effective replies. As a result, propose a means for WWBIC to employ a more effective statistical sampling method so it can extrapolate information that is more meaningful.. Impact and outcomes are essential to the overall success of NFPs, specifically to encourage donors to provide ongoing donations. Donors and funders are becoming much more tuned in to the positive impacts and outcomes of NFPs that are more indepth than simply clients served. Donors are interested in how the clients are impacted and,specific to WWBIC, how its clients have improved their overall financial condition. 6

7 Your proposal must clearly address how impact and outcomes can be measured in an effective and efficient manner. All items must be addressed in proposal. Information to be provided in June 2015 Various documents will be made available to the consulting firms by June Documents that will likely be provided will include, but not necessarily limited to: Current strategic plan Current surveys utilized by WWBIC File documentation for survey tool contained within Outcome Tracker Current budget for WWBIC Audited financial statements for most recent year end Form 990 for the most recent year end Current statistics relating to the overall client population Judging criteria Each proposal will be judged on the following criteria: a. Simplicity of the model designed b. Most effective survey questions that will yield the most effective outcome/impact information c. Most effective way to statistically select clients to survey d. Strength of ideas for collecting and summarizing information that can be uploaded currently to the date base software. e. Strength of ideas for collections and summarizing information that is currently not uploadable to the data base software f. Strength of ideas related to obtaining time-sensitive information from clients who have Internet connectivity issues g. All required items are addressed 7