Funding Formula Query – February 2008 Feedback from ASDs
initiated and compiled by
Lisa Spalding, Associate State Director
Indiana Small Business Development Center Network
Indiana Economic Development Corporation
One North Capitol, Suite 900
Indianapolis, IN 46204
317-234-2077 (phone)
317-232-8872 (fax)
www.isbdc.org
Florida SBDC Network Funding Formula
We take Federal funds off the top to support the State Director’s Office, our Professional Development Program, and the ASBDC Dues.
We then distribute the remaining Federal funds by County using the formula below:
60% Population
10% Business Population
30% Service Area
INDIANA
We take Lead Center budget and the funds for a FT director, counselor and admin per center off the top. We then distribute the remaining federal and state funds by county using the formula below:
50% # of established businesses with 1-99 employees
20% Service Area
30% Population 18-64
NEW YORK
On an annual basis, just prior to the development of our proposal to SBA to request funding, the regional center directors are asked to submit a proposed budget for the next fiscal year. If the request is significant deviation from the previous year’s allocation, the director is asked to provide justification for the difference. The primary variable used is the number of full time and part time personnel.
With this year’s increase in federal funding, we asked the directors to submit a proposal explaining their need for additional funding and providing justification. A few more than half the centers submitted something. All of the centers will receive some funds to increase their OTPS amounts, which have been very low for the last three years.
PENNSYLVANIA
In Pennsylvania we do not have a formula for distributing funds to centers. Funding is provided to centers based on a variety of factors, including ability to obtain match; needs of the communities to be served; size of the communities to be served; institutional resources available to address client needs; support of the provision of specialized services (such as technology commercialization); contributions to achievement of the network strategic plan; demonstration of ability to provide high-quality services; and amount of other funds supporting the center, in particular the amount of SBA funds (if any). As per our Policies and Procedures Manual, funding for all centers is dedicated first to continuation of core services, and then to expansion of core and specialized services, and anything remaining is allocated to fund new activities.
We very purposefully do not have a funding formula. Such an approach would be extremely detrimental to the program, for several reasons:
1. Funding becomes an entitlement. This would not allow us to manage the program for quality. Centers would know that they would receive a certain amount of funds regardless of how well they utilize those funds.
2. Funding allocations would shift dramatically. On a per capita basis, rural areas of the state are best served. On a population based distribution formula, funds would have to be reallocated to southcentral and southeastern Pennsylvania.
3. Can cause a match problem for centers. Under such a formula, some centers may not be able to come up with the required match.
4. Impedes our flexibility to enable centers to develop new programs in response to changing community needs.
5. Impedes our flexibility to enable centers to develop new programs and areas of specialization, such as technology commercialization assistance services.
6. Impedes our ability to fund the initiatives outlined in the strategic plan. Most of the innovations and development of new programs and services that take place in the Pennsylvania SBDC network are based on establishing pilot programs at specific centers. This is done for two reasons: 1. this allows us to prove the efficacy of a model and make adjustments before rolling it out statewide, and 2. we often do not receive a significant amount of new funds to distribute a new service or activity to all 18 centers so we take an incremental approach to deploying new services.
7. Will lead to reallocations in other sources of funding because of match requirements. For example, if state dollars are moved out X Location because of a formula, this reduces the amount of funds they have available to match federal dollars, and therefore, they could see a further reduction in funds as SBA dollars are cut back to a level that the center can match with state funds. This would essentially then mean that we would also have to distribute other sources of funding to centers on a formula too in order to meet match requirements.
MARYLAND
We are also looking for guidance on the same issue. Currently, federal and state funds are allocated in the same manner that they were allocated when I first started at the SBDC, 10 years ago. It appears that the original allocation was based on a combination of population and geographic coverage. Any new money has been directed toward developing new programs and the creation of a new region. We have not made any changes to the current baseline allocation to lessen disruption to the organization (cash match and staffing levels). Please share any interesting formulas that you get in response to this e-mail.
NEW JERSEY
For state funding, we look at prior year's actual performance along various indicators that are our goals in the strategic plan, the SBA goals, and the State goals. Our operations and budget director than calculates across the board so it is fair and consistent and based on performance record.
LOUISIANA
We re-organized our statewide network two years ago after Hurricanes Katrina and Rita devastated Louisiana. During the reorganization, we looked at several funding formulas for our regional centers, including population, businesses population, a combination of population and square miles, etc. In the end we went with population as a funding formula.
NEVADA
No formula – whoever we think deserves it, but we do consider past history/performance, population, and match (support from the community).
ARKANSAS
In Arkansas we really don't use a formula as such. Funding is primarily based on the staffing a center is willing to provide with consideration given to match and territory. In most cases we get a 2 to 1 match. We like to see each office have a director, counselor, training coordinator, and a clerical person.
IDAHO
We distribute our federal money to our six regional centers based on the percent of the population that they serve. We also receive state money which we distribute evenly - because we expect each center to serve clients in all of the counties that they serve.
The level funding for the past 10 years has gotten that a little out of whack - we don't ever take money away from centers. But with the little increase we are getting this year, we are trying to balance that out.
NORTHERN CALIFORNIA
We have been sort of stuck with a distribution that doesn’t relate to anything but we are moving to a population bases distribution with a pretty big holdback for performance to goals. Interestingly the of our 10 centers the center is the most remote region of our state consistently does the best job dollar per dollar in impact milestones, investments, 5hr + clients etc. They also consistently contribute more than their share to regional operations and activities. They would be punished for excellence in a strictly population based allocation.
NORTH CAROLINA
Our local Centers are housed at other UNC campuses and we use “activity” as well as # of businesses in the combined counties as an indicator. Most Centers have 7-8 counties in their service area. We view a basic Center as having a minimum of 4 professional staff (Center Director, Assistant Counselor/Admin and 2 General Business Counselors). We provide all the SBA funds as well as State cash match for salaries/fringe and use a non-personnel funding calculation of $6,000 per each professional FTE (full-time employee). If the Center has admin personnel they are funded at $3,000, as they have limited travel expenses. We try to “reward” the high-performing Centers with some funds for students, as well as Faculty Liaison funding