Women’s Policy, Inc. Washington, DC November 10, 2010

1. Women’s Policy, Inc.Washington, DCNovember 10, 2010 Lynne Cutler, President 2010 Chestnut Street Philadelphia, PA 19103 Telephone: (215) 564-5500  Facsimile: (215) 564-0933 Website: www.worc-pa.com

2. Mission, Services, & Philosophy • Mission • To promote social and economic self-sufficiency for economically disadvantaged women and their families. • Services • Microenterprise Training • Microenterprise is a business with: • 1-5 employees • Capital needs under $35,000 (50k) • Access to Capital • Incentive Savings Program • Philosophy • Asset-Building Strategy

3. WORC Accomplishments Impact Trained 3,000 individuals; 800+ businesses currently generate $20 Million in annual revenues; 361 loans totaling $1.18 million 1000+IDA graduates; Economic impact of $36.7 million. Awards/ Recognition Presidential Award for Excellence in Microenterprise Development, U.S. Department of Treasury (2001). Technology Innovation Award for Building Blocks to Financial Success (2005). 3

4. Financial Disparity in America Income Poverty: 12.3% of Americans live below federal income poverty line Asset Poverty: 27.3% of families with children have less than 3 months’ savings 37.2% of minority population have zero or negative assets 4 Statistics: CFED Assets and Opportunities Scorecard, 2010

5. Why Microenterprise? History WORC’s Microenterprise Program Started in 1985 500+ Microenterprise Programs nationwide Importance Viable Career Path Small Business Small businesses created 60-80% of the net new jobs since the mid-1990’s. 87% of all businesses in US today are microenterprises Women start businesses at twice the rate of men Strengthen Communities Buy local Tax revenue

6. Precious Jewels Daycare – Elsie D • Home-based day care center since 1998 with 3 employees. • Revenues of approximately $75,000/year. • Developed business plan and registered business as S Corp. • $1,800 loan to buy a computer, fax machine and copier and a $2,500 loan for a down payment to expand her business to a larger facility. • Grew business – also trains Haitian immigrants on establishing of day care business

7. Classic Design Jewelers - Diane C. Virtual jewelry store - 1998 Two employees $150,000 annual gross sales 7

8. Why Microenterprise? 1990-91 & 2001-02 recessions: More businesses started up than closed down Creation rate goes up in a downturn "Starting a business in a recession is like vacationing in the off-season. It's a little less crowded, and everything starts going on sale.“ –Eric Ryan, Method Cleaning Products 8 Statistics: SBA, US News & World Report, NWBC, US Census

9. National Research • Microenterprise reaches traditionally disadvantaged populations (women, minorities, and low-income households) • 813 clients study, 1 year after receiving services: • 60% in business full-time • Average revenues for full-time owners $111,185 • 36% net reduction in number of owners whose families lived in poverty Aspen Institute 2005 9

10. WORC’s Microenterprise Training Program • Training • 36 hours, 6 weeks, 2 times per week. • Management, Marketing, and Financial. • Trainers with business experience. • Individual Business Assistance • Market Access/ Commercial Linkages • WORCweb.com: Online business directory. • Access to contract opportunities. • Participation at expos. • Capital

11. WORC’s Training Impact • 70% complete training • 40% start or expand their business within six months • 30% employed or pursue further training • 50% stay in business over time

12. Keys to Success • Practical / action-oriented • Trainers - business people • Intake criteria • Peer support • One-on-one counseling • Access to capital • Market access & commercial linkages • On-going support

13. Markets Served • Low-income/Underemployed workers • People with disabilities • Dislocated workers (SEA) • Retirees (RIS) • Immigrants

14. Self-Employment Assistance (SEA) Program • 1993 North American Free Trade Agreement (NAFTA) HR Bill 3450, Title V, Sec. 507 • Allows unemployed individuals to receive UC benefits while starting a business. • 8 states participate: DE, ME, MD, NJ, NY, OR, PA, WA • 1997 PA HR Bill No: 1475 established PA SEA Program • PA SEA Results – 1997 to 2008 • Over 1,700 businesses statewide • $45 million in annual revenues • $8.8 million employee annual earnings

15. SEA Program Results • Overall Results • 800 businesses • $20 Million annual gross revenue • 250 additional jobs created • $4.6 Million annualized payroll • Aspen Institute Follow-Up Study FY 2006 WORC Participants • 73% operating a business one year after receiving services • 90% still in business at 18 months • $4 million gross annual revenues with estimated $240,000 sales tax revenue in 2007 • 1 in 5 businesses created new jobs • Cost per business created $4,315 • Cost per job $2,890

16. Family Care Giver’s Network- Geraldine F. 2001 Lost job as Director of Private Duty Nursing. Established nursing and staffing agency. $2,500 start-up loan. 45 employees. Annual gross sales $350,000. 16

17. Mugshots Coffeehouse & Café – Jill F. & Angela V. • Completed training in 2002 • 2 coffee shops • Voted Best of Philly 2005 • Committed to positive contribution to the community by being mindful of the environment and their neighbors, both locally and globally.  • sends day’s end surplus food to a local homeless shelter.  • Leaders formed a cooperative of local independent coffee houses • Turned profitable after just one year.

18. Barriers to SEA Implementation • Not eligible for extended benefits • Funding • Performance standards • PA 15 benchmarks: • Completion of training • Business plan • Legal entity • Checking account • Home office • Lease signed • Equipment & supplies • Marketing package • Solicited customers • Insurance • Licenses • Staff • Schedule C for Income Tax • Full-time • Other

19. Sen. Wyden (D-OR) Proposal – “Self-Employment Assistance Act of 2010” • Self-employment assistance programs were established following enactment of NAFTA in 1993. • Self-employment assistance programs serve as a cost-effective method for promoting rapid reemployment & reducing time individuals require unemployment compensation. • In 2009 more than 588,000 business were started every month in the United States.

20. Self-Employment Assistance Act of 2010$150,000,000(Under Development by Senator Wyden) • WHO CAN APPLY: • States that has already enacted self-employment assistance programs, or           • States that establish programs and wish to extend the program to eligible individuals.  • COVERED COSTS: • 100% of allowances paid to individuals, plus administrative expenses incurred by State. • CONDITIONS: • Number of individuals receiving Self-Employment Assistance may NOT exceed 1% of the number of individuals receiving unemployment compensation.  • ONE grant per State. Eligibility • Any individual who was not eligible to participate in SEAP  while collecting unemployment because: • They were not identified as likely to exhaust their regular benefits, or • SEAP was not available in their state. • Any individual who is eligible for emergency unemployment benefits.

21. Why Provide Access to Capital? • Lack of access, especially among low-income & women • 48% increase in demand for microloans since May ’08 • Repair credit through financial education & counseling • Pathway to traditional financing

22. Small Business Job Act of 2010 – HR 5297 Modernizes and increases SBA funding: Max. size of microloans increased from $35,000 to $50,000. Increased microloan intermediary borrowing cap from $3.5 million to $5 million. 22

23. Economic Opportunities Fund Loan Products • Impact • 361 microloans totaling $1.18 million • Products • Credit Builder Loan- $500 to $1000 • Line of Credit - up to $2,500 • Small Business Loan - up to $20,000 • Near Equity Product - up to $35,000 • Use of Funds: • Start Up Costs • Working capital • Equipment • Inventory • “Step” loans

24. Beautiful Beginnings Childcare, Inc. - Lalita P. Certified childcare instructor 3 loans: $2,500 Start-up loan in 2004 $2,500 to continue marketing & outreach $7,000 for 2nd location start-up costs 14 employees 50 children Grossed over $200,000 in 2nd year of operations Recently opened a 2nd childcare center 24

25. Pennsylvania Family Savings Account Program • Developed in partnership with PA Governor’s Office in 1997 • One of largest statewide IDA Programs in nation. • One-to-one match up to $2,000. • Savings can be used for: • Business start-up or expansion • Home purchase/home improvement • Education for themselves or child • Other (car, debt/credit repair) • Basic Financial Education Classes.

26. Why Savings & Assets? Pew Economic Mobility • Higher personal savings promote greater upward income mobility • 66% of individuals who had low savings remained in the bottom quartile of personal wealth compared to 45% who had high savings • 71% of children of low-income, high-saving parents are more likely to experience upward income mobility compared to 50% of children of low-saving parents “A Penny Saved Is Mobility Earned,” Cramer, R., O’Brien, R. et al CFFI 2009

27. WORC’s Family Savings Account Program – 9/30/10 1010 graduates Home purchases: 245 Home Improvement: 156 Education: 124 Business: 58 Retirement: 51 Car: 228 Economic Impact $36.7 million $2 million saved $1.8 million matched Leveraged with $ 3.1 million in personal savings and other resources $ 29.6 million in mortgages and loans

28. National Research Current research on the outcomes and impact of asset-building IDA programs show IDA savers are: 84% more likely to own a business. Twice as likely to attend college. 35% more likely to own home. More than half who previously received public assistance no longer receive assistance Low incidence of foreclosure 1 of 171 in WORC’s study

29. Community Economic Development Benefits • Homeownership • Real estate taxes • More stable community • Equity for future business start-up • Education • Workforce • Small business • Job creation • Tax base

30. INVEST NOW!Federal Funding Sources

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