Re: state EO programs

["Don Jamison" <donjam@together.net>]

Hello, Sara --

     I believe that an EO strategy belongs as much under your "asset
protection" category as under "asset building."  When a business spreads
ownership among employees, it is rooting itself more deeply in the
community, making it much less likely that it will leave town.  "Capital
retention" (which in this case is also "asset protection") is one of the
biggest virtues of employee ownership, and is very appealing to those
interested in healthy, sustainable communities.

     Below are the components we've sketched out for the Vermont Employee
Ownership Center.

1. Outreach:

 Provide information to owners and employees of Vermont-based businesses
and organized labor on employee ownership options of all sorts (including
Employee Stock Ownership Plans and worker cooperatives), financial and tax
implications, the variety of possible legal and organizational structures,
and sources of financing.
 Target outreach to small business owners who are contemplating retirement.
 Organize ownership succession seminars.
 Run an annual VT employee ownership conference highlighting best company
practices, as well as providing nuts and bolts workshops on employee
ownership.
 Educate professionals who work with small businesses about employee
ownership.
 Create case studies of existing successful VT ESOP and co-op firms
suitable for dissemination.
 Introduce the idea of employee ownership to students in Vermont schools,
colleges and universities.

2. Pre-development work:

 Conduct preliminary feasibility analyses to determine whether employee
ownership is advisable for particular businesses, and whether a full
feasibility study is warranted.
 If the preliminary analysis shows promise, provide referrals to technical
and legal resources and to trade organizations specializing in employee
ownership.
 Identify funding for feasibility studies, business plans and other soft
costs.
 When necessary, provide funding for soft costs on a matching fund basis.

3. Transaction services, training and technical assistance (provided on a
fee for service basis, in most cases):

 Coordinate transactions, particularly in cases where groups of employees
wish to purchase a business.
 Provide trainings and technical assistance to companies and their
employee-owners on structuring employee participation systems; help create
and implement ownership education programs.

4. Fund for employee ownership:

 Provide matching funds (in the form of recoverable grants) for feasibility
studies and other soft costs.
 Future possibilities – make equity investments in businesses that are
converting to employee ownership and, on occasion, employee-owned start-ups;
make loans to existing employee-owned companies.


     We are setting up the VEOC as a free-standing non-profit.  We hope to
receive state funds in the future (not for a while, it would appear), but
hope to develop multiple sources of funding.  That's what the Ohio Center
has done so impressively, and I believe that it is a key to their success.
Independence for our Center will also give us a board devoted to supporting
the complex work of employee ownership, with representation of our various
groups of beneficiaries.

     I'd be happy to tell you more about what we're up to.

Don Jamison
Coordinator
Vermont Employee Ownership Center
donjam@together.net
802-660-0640


-----Original Message-----
From: Sara Lawrence <sara@cfed.org>
To: 'EOsubnat@cog.kent.edu' <EOsubnat@cog.kent.edu>
Date: Tuesday, October 23, 2001 10:30 AM
Subject: state EO programs


>Hello,
>I would greatly appreciate any feedback on the following:
>
>We are working on a project at the Corporation for Enterprise Development
>(CFED) benchmarking outcomes and policies at the state level that are
>promoting asset building and asset protection for state residents.  Within
>this "Assets Report Card" we are including state policies that promote
>business capital as one set of asset building strategies.  Within business
>capital, one of our measures evaluates  employee ownership programs at the
>state level.
>
>In this measure, we want to make sure that the program meets a certain
>threshold, so that we aren't praising a state that has an EO program that
>isn't good, or effective.
>
>From reading John Logue's recent article, I picked these out as
requirements
>for a quality EO state program:
>
>-disseminates info
>-provides assistance with succession planning
>-encourages employee participation
>
>Do you think this is a decent standard, or do you have any suggestions on
>what we should or should not consider in determining a threshold for a
>quality EO program?  The difficulty here is that we want to define a
>standard for a quality program, yet we don't want to overwhelm
>state policymakers with requirements that seem impossible for state
>officials to consider.
>
>The end result of our project will be a set of criteria, where we can
>"check" or give credit to a state for having these elements in their EO
>program.
>
>Suggestions on what you consider essential for an effective EO program at
>the state level would be greatly appreciated.
>
>Sincerely,
>Sara Lawrence
>
>
>Sara Lawrence
>Corporation for Enterprise Development
>123 West Main Street, 3rd Floor
>Durham NC 27701
>919.688.6444
>http://www.cfed.org
>
>