Community Rehabilitation Providers and Self-Employment: A Conversation with Beth Durkee and David Hammis NOTE: The slide transcripts have been edited for readability. These edits have not altered the original content of the presentation. Slide 1: How did your program become interested in self-employment? * Staff attended an APSE conference. * Applied for and received a RESEED grant. * Received technical assistance from Griffin-Hammis. * Held forums on self-employment. * Learned about self-employment. Interviewer: Today, I have with me Beth Durkee and Dave Hammis. They are going to be talking with us about involving CRPs, Community Rehabilitation Providers, in self-empolyment and assisting individuals supported by CRPs in becoming self-employed. That’s our topic for today. Beth, I’m going to start with you. Could you give us a little background on your CRP? I know that you are from Allagen County, Michigan. Could you tell us how your program became interested in facilitating self-employment as an outcome for individuals that your program assists in employment? Beth Durkee: I think our initial interest came from staff that went to an APSE conference. They met Dave Hammis, learned about self-employment, and became interested in it. Joe Longcore was the staff person. Dave and Joe e-mailed back and forth. We also were added to the Rural Institute’s mailing list, and they had an RFP for a RESEED grant, which we applied for. Then, we received technical assistance from Cary and Dave, which truly got us rolling. Interviewer: Within the context of the technical assistance that you received, can you give us some ideas about how that technical assistance was structured? Perhaps give us information on how that TA was structured so another organization can understand what they might need to get started. Beth: The technical assistance came in a number of different ways, and Dave may remember some things that I forgot. Dave and Cary worked with our staff in terms of philosophy and understanding self-employment and the importance. Also we talked with the people that we serve people with disabilities. We had forums and discussions about self-employment as well as with community members. There was a whole philosophical piece that we started with. Then the assistance got a bit more technical, talking about funding. We discussed how to create funding for start-up, support people in their businesses, involve Voc Rehab (Vocational Rehabilitation), and make use of the work incentives. They helped us with a lot of the technical and detailed information. Slide 2: How did you identify the first person for self-employment? * Individual wanted to work. * He was not happy with what was available. * It was a good fit! * Agency now supports 23 operating businesses! * It is a choice that is “on the table” for anyone. Interviewer: Give me an idea about the point where you had your initial assistance where they did the philosophical background. From that point to the training that it sounds like they provided, was it a really long time before you identified someone who was interested in self-employment? How did you pick that first person that was interested? Or did that person pick himself or herself? Beth: Well, it didn’t take a long time actually. I think it was less than a year after we started that a person started up their own vending machine business- Michael J’s. We picked that person, because they were not happy with what they had. At that point, the workshop was kind of phasing out. There weren’t many people left. The work there was a lot of fine motor things that was not Michael’s strength, but he wanted to work. He came to the forefront as someone who wants to work but was not happy with what we had available. It just seemed that he would be a good fit for self- employment. He had certain family things that were going on too. He was out of town a lot so this seemed a good fit. He started his business in 2000, and we got involved with the RESEED grant in 1999. Dave: Actually, Joe who had been coming to APSE for two years had been looking at businesses. He was doing a reverse approach, which was demand driven. He was getting some local consulting from the Small Business Development Center. The approach was to go find out what the community needs and then put people in those businesses. It wasn’t a bad approach. We were trying to counsel him to use a person-centered approach. If you put somebody in a business that doesn’t fit their strengths, the business may not be successful. Joe, at the second APSE conference, had a rough business plan that he had come up with. This was a pretty new thing for your agency as I understand. They really hadn’t supported people with businesses before. I just wanted to brag a little bit about you guys. Since 2000, you now have 23 operating businesses and a department that just deals with small business. It is a choice that is on the table for anyone when they are entering service or choosing an employment goal. I think that’s a pretty powerful example of sustainability of how you have continued past the initial year of technical assistance from us. Slide 3: What made Beth’s CRP right for the implementation of self-employment? * Staff came back from an APSE conference with new ideas. * Support is the key to implementation! * Staff felt the freedom to “try it out.” * Agency provided funding beyond the initial grant. * Self-employment became an option for people who had not been successful. Interviewer: What made Beth’s CRP right for the implementation of self-employment? It sounds as if they have really run with it. What do you think is unique about her organization, the people who work in her organization, or the individuals who are served by her program? Dave: I would credit Joe for having the energy and the interest in taking back new ideas from APSE. Sometimes, staff comes back from conferences with a new idea and then feels frustrated. So, the bigger credit would go to Beth and the directors above her, the board, or the director of these programs to listen to Joe’s ideas and his excitement and supporting them. It could have been, well we’re not going to do that. Leadership is always the key. Somewhere, the leadership sponsored Joe and other staff from their agencies to go to the national conference. Also, Joe came to a National Self-Employment Conference in Montana that we sponsored just before the RESEED grant, which stands for Rural Entrepreneurship and Self-Employment Expansion Design. It’s designed for rural communities, and Allegan is a pretty rural community. I think there was a combination of a lot of things. The staff felt the freedom to try out new things and had the energy to do that. I don’t think staff can do that unless the leadership above them empowers them. Another thing was the notion of wanting people with disabilities involved all the way through. The first kick-off event, if I remember, was held in Grand Rapids in a big forum that was well orchestrated. Your agency had to pull some additional funds beyond anything that we provided. The event became a celebration. There was the first business, and then Judy T’s business came along. I think some of the ingredients was an openness to consider that anyone can choose self-employment if they want to. The question was how could we facilitate that for those with developmental disabilities? That’s a tough question to answer for a lot of the agencies who feel like they are already doing ten jobs in one job description. Where are we going to find the time? Beth, do you have a thought on that? Beth: I think that the other piece that helped us realize that we needed to do something was we were heavily involved in supported employment but that wasn’t working for everyone. So, here is another option for those folks that community supported employment has not been helpful for. Here is another option for those folks. I think that’s how we were able to get the support from my boss. I have certainly tried to be supportive of Joe too. Slide 4: How did your organization restructure funding? An Innovation and Expansion (I&E) grant funded the initial staff person. The workshop was downsized and funds were moved to support supported and self-employment. I&E grants may be available in other states to support self-employment. Michigan also has an excellent Medicaid Waiver. Waiver can be used for a person to hire a staff person to assist with self-employment. Interviewer: You had the initial seed money from the grant. How did your organization restructure their funding? How did you go about moving funds so that this could be supported as an option within your agency? Beth: After the RESEED grant, we also received a grant from Voc Rehab for Innovation and Expansion (I&E). This funded our initial staff person that was ultimately responsible for self-employment. During that time, we were downsizing the workshop as people were successful at getting jobs in the community. There were fewer people in the workshop. We still had staff there. I was able to transfer those resources from the workshop to supported employment and self-employment to sustain that effort within the organization. Interviewer: The VR grant that you just mentioned is this something that would be available in any state? Is that specific to Michigan? Dave: I work in other states, and Beth can address this too. In some states, I&E grants are kept in- house for VR only. In other states, Innovation and Expansion grants are put out more to community vendors, such as community rehab programs. To generalize and say that all community rehab programs can access I&E funds would probably not be fair. It would be a fair notion that if a state doesn’t allow it that you could call Beth and look at that model. In other states, you could use this information to help VR. Certainly, it is within the legal parameters of what VR can do with that funding. Maybe advocate for VR to change their state policies. I wish it were available in all states. The other thing that I think is unique in Michigan is their Medicaid structure. I believe Michigan has one of the best Medicaid waivers in the country. You use fiscal intermediaries in your agency, Beth, and you probably describe this much better than I do. Within the individual budgets, you can budget for someone to support a small business who is a community person, not even a Medicaid worker, which is a powerful savings actually for Medicaid. Interviewer: This something that is really import for our listeners to have additional information. Beth, can you expand a little more on what Dave has just explained? Beth: What Dave is explaining is part of our self-determination initiative that we started back in 1996. Everyone that we serve with a developmental disability has their own individual budget This reflects both their personal income and expenses and any service expenses that they have and any other kind of income that comes from Voc Rehab or the Department of Human Services. Everything is reflected in the budget. Through that budget they are able to select and hire the staff that they would like to support them, in this case, in their self-employment opportunity. They can interview people and hire them. We use Medicaid dollars to pay that support staff person. Because Medicaid can’t go directly to the individual, there is a separate entity, a fiscal intermediary that the money is funneled through. The fiscal intermediary basically serves as a payroll agent. The employee works directly for the person with a disability. Slide 5: Can you tell us about your innovative loan program? One loan program was funded by the RESEED grant. The other was funded through the Knights of Columbus. This is a no interest loan for start-up expenses. Medicaid Waiver funds cannot be used for start-up expenses. Interviewer: Beth, my memory is a little fuzzy here. It seems to me that you also had a really innovative program where you figured out a way that people could get some start-up money for their businesses by borrowing some money. Could you tell us a little bit about that? I really think that’s a great example. I don’t want to describe it. I’d like for you to. Beth: We have two opportunities for people to borrow some money for start-up. One was some funding that came from the RESEED grant where we started up a revolving loan account. People can submit a formal request. We funded computers and embroidery machines and a machine to do dried flowers—and just some funding to get them started. There is another fund that is funded by the Knights of Columbus through their Tootsie Roll drive. It is the same kind of thing. It is a no interest loan that they pay back for some of the start-up expenses. In Michigan, we cannot use our Medicaid waiver for those types of purchases. Interviewer: I know that you said you have a number of businesses. Could you give us a specific example of a business that an individual owns that they have accessed those dollars to buy something? Beth: We have a person who is growing and then selling herbs. His mother actually is in the floral business so she is a big support for him. He needed some money to start with, first of all to buy some seeds. He borrowed some money initially for his seeds and then he decided that he wanted to sell them at the farmers’ market downtown. There was an initial fee for the booth at the farmers’ market and so he borrowed some money for that and then has paid that back. Now, he has decided that he wants to expand that business. He wants to be able to grow bigger herbs. He wants to start growing them in the fall, but in Michigan that’s not really a good time for growing things outside. So, he is going to be borrowing some money for a small greenhouse to put in his yard so he can begin growing things in the fall and then by the spring when the farmers’ market opens up, the plants will be bigger. For him, that fund has been very helpful. Slide 6: What is the payback rate for these loans? What other funds were used? There was an expectation that the money would be paid back. PASS plans were also used to fund self-employment. Agency also understood the importance of benefits planning. The CRP did not rely on only once source of funding but blended resources. Interviewer: Now I am going to play the voice of cynicism. Because, you know some people will probably have a cynical question or two. What is the payback rate for these loans? Has it been good? Beth: It has been very good. I think because we provide support for people. For the loan fund that were funded by the RESEED grant, there was actually an expectation that there was some kind of business plan that goes along with that and how they were going to pay that money back. Not everyone has paid it back, but the majority of people have. Dave: I also wanted to add in here, that whole notion of PASS plans was new to you, the use of those in your agency for the most part. I think you might have had one or two, years ago, before we started with RESEED and this whole project back in 2000. Since then, they have also used PASSs. PASSs have paid back some of the loans. We were talking earlier, and we did not bring exact numbers, but maybe over $100,000 worth of funding from PASSs that’s a Plan for Achieving Self-Support with Social Security. So accessing that source of funding has been part of the mix too. You have had larger purchases, like the first vending business you were talking about, VR purchased (or MRS in Michigan) a series of machines. PASS bought a vehicle. I think it was around $14,000 or $15,000 PASS plan. Recently, there was one that has taken off fairly well. A box business that we talked about in the webcast today grossed $80,000 last year and PASS was used to help get that started, plus a loan fund, plus a couple other venues of funding, and the Medicaid funding. I just wanted to throw that in as a piece that your agency took on and sent benefits planners to BPAO training. I think you sent seven staff for a week-long training. You also invested in another week in training on self-employment around benefits. So, you have a lot of internal capacity. If people have questions about their benefits, it’s not that you are not using the WIPA resources in Michigan, but you enhanced it by having additional self-employment knowledge. It’s been an interesting piece. Interviewer: Really what it sounds like to me is that you have done a great deal of exploration. And you haven’t really relied on any one source. It’s been a blending or combining of different resources to reach your end goal. Beth: That’s exactly right. I think because we are blending those, it helps get funding from some of the other places. When you go to Voc Rehab and say, we would like for you to fund this piece, and we’re asking for a PASS plan for this piece, and the revolving loan account is going to help fund this piece, all three of those entities are much more willing to say yes, than if we were just relying on them alone. Slide 7: What other questions do you think people may have? People who start businesses have long careers. This is assuming there has been a good match to the person. Some people have seasonal businesses and need “income patching.” This concept has seemed overwhelming to some CRPs. But, if the agency has a “can-do” attitude, it can be successful. Interviewer: Dave, can you think of anything that we might have missed as far as questions in people’s minds? Dave: Sure, a few things. There is one thing that I just wanted to point out. It has been our experience nationally that people who start businesses under these frameworks seem to have a long career in business. I have been working with businesses, probably actively for 15 years (since I was maybe14 in my own life). All the businesses that we started initially, back seven or eight years, are still in business. But in your agency, similar people who have been interested in employment may have had four wage jobs in those same eight years. The intriguing thing for me about small business, assuming we’ve matched it well and haven’t harmed the process by trying to do a demand side, there is this longevity to small business and it’s fascinating to me. Some of them have continued with their businesses and gotten wage jobs in between. In the field of small business, it’s called income patching, someone who has a seasonal business and in the winter works at McDonald's. This is true for people without a disability and is common in the business world. I’ve been fascinated with the longevity, plus the fact that in the first few years, you only had four or five businesses there. It has continued to grow. There have been some new barriers. The initial RESEED grant and I&E grant have run out, but you have effectively been able to keep it funded. Self- employment is just part of your employment program. From the numbers, you have 120-some people supported or in community employment jobs, individual jobs, and 23 or so in small businesses. This represents about 20% of the people you serve, which is an interesting statistic that happens to correlate with the Robert Wood Johnson grants and the Choice grants that were out years ago. One of their reports was that 20-30 percent of people involved in those demonstration grants were expressing an interest in self-employment. Yet, VR nationally closes 1.85% in self-employment. You are one of the agencies that we can look at longitudinally. Over an eight year span, you are now supporting about 22%, almost exactly the percentage of people with disabilities who say that they want self-employment. I think the fascinating part is that sometimes we go and work with CRPs. Self-employment just seems too overwhelming. The concepts are overwhelming of how to look at spreadsheets and where do we get business ideas. There is so much more involved. I guess the thing that I have admired at your agency is the leadership to say that we are going to do this. When staff knows that we are going to do this, self-employment is not a question anymore. Here is a choice on the table for you. We are not going to restrict you from choosing self-employment if you are interested. Interviewer: Actually what I am really feeling is that your agency has a “can-do” attitude. You say, “We’re going to figure that out!” You don’t say, “It sounds too complicated, and we can’t figure it out.” In closing do you have one piece or a couple of pieces of advice that you would give to another agency? Beth: I think Dave is right. It did seem overwhelming at first. But when we started the work with self- determination, we developed a whole new vision and mission statement and values. The last one was: “Whatever it takes.” So, the message was, there is going to be barriers. But we need to figure out what it’s going to take to remove the barrier so we can move forward. We took that same approach with self-employment. It did seem overwhelming at first, but we took it one step at a time. We tried to figure out how to move through whatever issue that was and whatever it took. We just moved forward. Interviewer: Thanks to both of you for being with us today and we will have a link on the website that people can ask you questions about this. Really, I think you have given us a lot of really good food for thought. Thanks a lot.