Evaluation Findings

The product and service "outputs" supported by the program, and as provided by the CFDCs, are consistent with client expectations, accessible, and sufficient to support intended outcomes.

Positive impacts at a community and business level can be demonstrated in keeping with established program goals, objectives, targets and expectations.

In keeping with the need to demonstrate effectiveness, the expectations and needs of clients and community members should be met through the provision of services. In addition, positive impacts should be demonstrated as a result of the program and the CFDC activities and "outputs".

1. What services were provided and did they meet expressed client and community partner needs and expectations?

As demonstrated by Table 2 on the following page, there has been a dramatic increase in the total number of client contacts over the past seven fiscal years, which can be interpreted as an indicator of the need for, and uptake associated with, the services provided by the CFDCs. At the same time, other trends such as the decrease in the number of loans and community economic development projects might reflect changes in practices or the constraints of limited funding (i.e., coupled with annual and end-of-fiscal budget allocations).

In general, clients that participated in these focus group sessions were very satisfied with the level and quality of services provided. The services that were received by focus group participants included, but was not limited to:

• Instruction on business planning.
• Access to loan funds in the absence of financing from commercial banks and other financial institutions.
• Financial counseling.
• Mentorship.
• Facilitation and coordination.
• Secretariat functions.
• Provide human and financial resources for projects.

In response to questions on the degree to which client’s expectations were met, and in relation to these services, the comments included:

• Found the counseling to be positive and very helpful.
• The CFDC personnel could really see the business potential in cases where commercial institutions would not provide assistance.
• Strengths include accessibility, the consistency in dealing with staff at the office, and networking opportunities.
• Found knowledgeable, experienced staff, and flexibility to respond to different needs.
• Ongoing support and mentor services have been invaluable.
• Availability and approachability of staff, they care about the individual.

Total Number of Client Contacts

Total Number of Technical Services ²

Total Number of Loans

Total Value of Loans ($ 000s)

Total Number of CED Projects

Short Term CED Projects

Long Term CED Projects

Total Number of Youth Loans

¹ The Other Partnerships Investment Fund did not exist prior to the 1997-1998 fiscal year. This fund sources funding from non-WD investment funds (e.g. Forest Renewal BC).

² Business Advisory Services

“Opened my eyes” in terms of the key steps to starting and running a business – Client Respondent

“They will take a chance on a small business, banks will laugh at you” – Client Respondent

“Didn’t know what to expect, but it was a pleasant experience” – Client Respondent

“Has been phenomenal over the years” – Client Respondent

“Had limited expectations about how much the CFDC could help … and was very pleased with the response” – Client Respondent

• They have a varied and good background in finance and business.

• Well rounded staff, can tap into knowledge and skills.

• Accessible and welcoming.

• Very pleased overall with the services and assistance that was provided.

• They were knowledgeable of the local market.

• The staff is approachable and they care.

• Found the counseling to be positive and staff was very helpful.

• Positive level of support.

Even those individuals that ended up not implementing their business concept reported that this in itself was an indication of the beneficial nature of the CFDC services (i.e., they avoided a potential costly failure through the advice and consultation received). One respondent summarized this point as, “sorted out entrepreneurial individuals with the right skill set from those that would likely not succeed.”

An area that clients sometimes reported as an issue was the level of security required and interest charged on loans, which was perceived by some individuals as being relatively high. To provide a “yardstick” for this expressed concern, a CFDC reported that loans upwards of $125,000 are provided at rates ranging from between prime plus 3.5% to prime plus 8%. The rate was then noted as dropping substantially for loans provided to qualified youth and disabled clients, as well as individuals from commercial or sport fishing sectors, to prime plus 2%. Although the upper level of this range does appear to be high, there is a fiduciary responsibility for the CFDCs to prudently advance funds with adequate levels of security and levels of interest that reflect the risks taken on the loans.

Most clients that accessed loans through CFDCs reported that this has been extremely valued, especially with communities going through economic transition, and businesses and entrepreneurs in the start up or expansion phase. Coupled with the reported trend among commercial lenders and the Business Development Bank of Canada that involves a shift towards larger loan portfolios that have lower risk profiles, this was seen as reinforcing the importance of CFDCs providing access to financial capital for small businesses and entrepreneurs (i.e., there is a “financing gap” that the Program is addressing). The annual operating plan for a CFDC identified an innovative response to ensuring these needs continue to be met, namely the approval of “micro-loans” of up to $5,000 with no security, disbursement of loans for up to $10,000 with minimal security, and provision of access to developmental funds of up to $250,000 over a five-year term with other financial institutions serving as partners in this regard.

Another issue often raised was a general lack of awareness of, and positive outreach on, the Program as well as the existence and breadth of CFDC services. Comments ranged from “there is a need to increase public awareness” to the Program being the, “best kept secret”. Although many management respondents acknowledged this as being a significant challenge and in need of action, it was also noted that the attendant risk of being successful in outreach activities is the creation of demand for services that might exceed what is possible using available resources. As a result, it was reported that CFDCs must be strategic in their use of funding for marketing, rather than simply investing larger amounts in advertising and media placements.

Other respondent recommendations for potential service improvements included:

• Provision of a regular “mixer” and more frequent networking events would be beneficial.
• There should be more follow-up with supported businesses.
• Further assistance should be provided with bookkeeping, possibly by providing tools and templates.
• Broaden the use of loan funds to address such expenditures as overhead and staffing.
• Survey the interests in a community and then host guest speaker seminars.
• Follow-up assistance, with this currently being more reliant on the initiative of the client.
• Increase the amount of available funding.
• It is a difficult process for obtaining small amounts of funding.
• Provide managerial training.
• Host more seminars and information luncheons.

On the whole, the majority of respondents suggested that the CFDCs have been very successful in delivering needed and valued services that met expectations for quality. This is consistent with the findings from a study conducted in 2002 that found average ratings of 4.1 and 3.7 among those community representatives and clients surveyed (on a five-point scale, where “5” is very successful) and in response to a question on how successful the CFDCs have been in achieving their objectives.⁸

• The CFDC helped to sustain the business.
• Supported businesses that are now generating employment.
• Business is doing well and demand for services is high.
• More people shop locally as a result of business retention.
• One company has been in business for eight years, has thirty employees, and $1 million in payroll.
• This organization is good for the community, with several businesses in the downtown area being a direct result of the CFDC.
• Businesses would not be here if not for the services.
• Businesses, jobs and the spin-offs from successful small businesses.
• Numerous jobs have been created.
• Have seen ten to twelve businesses in the downtown area that are there as a result of the CFDC.
• Over one-third of the businesses in the region have been impacted or influenced by the activities of the CFDC.
• Stimulated the development of businesses and entrepreneurial spirit.
• Would not have gotten into business in the absence of CFDC support. These results would not have been realized if the services were not provided by the CFDC.
• Would not be operating without the CFDC loan.
• Could not have started a business without the CFDC.

With respect to the last few comments, even in cases where clients indicated that a business would have started in the absence of CFDC support, it was commonly stated that the CFDC provided a means for improving the success of the ventures and advancing its development. This is a critical consideration in that any evaluation must examine the extent to which results are attributable to an organization or initiative. As it relates to the Program, and in addition to the above commentary received from the focus group participants, another study found that surveyed clients reported that almost 60% of their business revenues were derived as a result of the services provided by the CFDCs. Furthermore, over 40% of these individuals indicated that their business would not have developed in the absence of these services. The authors of this study estimated that overall, the business services provided by the CFDCs:

• Were used by 30,000 to 35,000 small businesses;

• Generated between roughly 26,000 and 32,000 person years of employment; and

• Resulted in $1.1 to $1.4 billion in revenues over the six-year period 1995 to 2001. ⁹

Respondents did raise though, the potential risk of CFDCs raising their standards on loans, and following the same evolutionary path as the Business Development Bank of Canada and commercial financial institutions. To the extent that this was to occur, it could result in the exclusion of some entrepreneurs and individuals with business proposals in terms of their ability to access needed financial capital. Such negative impacts would be intensified in smaller communities where commercial banks might not exist, or other alternatives to access loan funds were minimal to non-existent.

Additional statistics based on the quarterly reports, and that serve to demonstrate across the CFDC network the combined impacts that have been realized in terms of employment and leveraged funding, are summarized in Table 3 below.

¹ The Other Partnerships Investment Fund did not exist prior to the 1997-1998 fiscal year. This fund sources funding from non-WD investment funds (e.g. Forest Renewal BC).

² Leveraged Funds are based on lending activity.

³ Business Service job statistics were not collected prior to the 1996-1997 fiscal year. These figures are provided by CFDCs, and are generally not obtained through a specific follow-up with each client.

• A manufacturing plant supported through CFDC loans and assistance that employs five people.

• A client that purchased manufactured homes and secured the exclusive dealership rights with financial assistance from a CFDC has generated almost two million in annual sales and employs two full-time and two part-time people.

• A business that was supported through the Youth and General Investment funds of a CFDC is being managed by young entrepreneurs and has generated over $465,000 in annual sales as well as employing two full-time and six part-time positions.

• A participant in the Self-Employment Program received coaching and a loan that resulted in the continued operation of a company, which would have not been the case in the absence of this support. This company generated sales of $80,000 in 2002 with expectations for significant growth, and currently employs two people.

• A loan from a CFDC for the expansion of an existing software business and to implement a marketing plan has supported an increase in annual sales from $647,000 to $3.4 million, and growth in employment from 13 staff to 32 staff over the same period.

• A client required financing in the amount of $150,000 for the purchase of equipment and as part of an expansion to enhance mill production capacity. Annual sales have grown to over $7 million, employment has reached almost 40 full-time staff, and production levels have increased by 50%.

• A partnership initiative between a CFDC and the Business Development Bank of Canada, with in-kind contribution from a First Nation, provides participants with access to credit ($5,000 maximum per individual) and training. Participation has reportedly increased with repayment rates reaching 98%. The initiative has also enhanced business skills.

• Proprietors received funding to purchase and renovate a building. Through financing provided by a CFDC in partnership with other agencies including a second CFDC, the business has been able to generate sales of approximately $800,000 and increase employment by six positions.

In addition to these business related impacts, the CFDC network was often perceived by respondents in the focus groups and interviews as acting as a catalyst for community economic development and diversification from both a local and regional perspective. Specific observations made by respondents included:

• The CFDC is helping communities with working together. Five years ago, communities would have thought locally. Now they are thinking and acting regionally.

• Facilitated the development of a direction for a wide array of communities.

• It is important to note that the results of the program are not just jobs, with employment being a by-product of healthy communities.

• The CFDC has provided support towards the realization of a diversified economy.

• Have assisted a broad cross-section of communities with economic development.

• Have seen diversification of the local economy.

• The CFDC brings communities together to address issues.

• Have brought communities together and built dialogue with Aboriginal bands.

• Promoted regional cooperation and bridging between communities.

A related challenge though, was that there could be a concentration of impacts in the community in which the CFDC office is located, particularly if financial pressures prohibit the ability to travel to, or maintain partnerships in, other areas in the service region.

Community economic development efforts are seen to be instrumental to achieving the mandate of the CFDCs and the Program. Although further progress can be made in establishing and tracking relevant measures of success, a recent study quantified a range of employment, business start-up and revenue impacts. Coupled with the project file reviews provided in Appendix A and highlighted below, it is evident that a range of benefits, both quantitative and qualitative, can be realized through investments of this nature.

• A CFDC facilitated the formation and ongoing operation of a local committee to formulate an integrated watershed plan, enhance stakeholder engagement and address sustainability of a major lake. Through this committee, funding has been leveraged from several organizations and levels of government, and a four-year study of two basins is underway.

• A CFDC has successfully received funding from two forest companies that is used to act as a secretariat for a public advisory committee. This committee, formed to fulfill a public consultation requirement, has broad representation and provides ongoing direction and advice on forest operations and planning.

• A CFDC provided staff support for a tourism marketing initiative that since inception has seen an increase in the level of partnership, developed and distributed over 40,000 brochures, re-launched a website, established a toll-free number, hosted a Familiarization Tour, and provided for active outreach through workshops and other events.

• Through funding provided by a CFDC, as well as a First Nation, the Gilaxdamix Arts and Cultural Centre was formed. It is anticipated that this project will lead to greater diversification of the economy, and during construction phases, create temporary employment for local people as well as generating expenditures in the community.

• An Independent Employment Program funded by a Provincial ministry provides those on income assistance with skill assessments, training and guidance on the preparation of business concepts, a personal action plan, and a business plan. As of March 2002, over ninety clients have participated with a successful completion rate of 81%. Participant satisfaction ratings are relatively high, and at least seven successful business ventures have resulted from the program.

• Through funding provided by a CFDC, a diagnostic tool known as the Business Vitality Index was developed. This tool was subsequently applied to two remote communities, and supports the identification and development of community economic adjustment plans and projects. It can also serve to attract partnerships and additional resources in support of community transition planning. Although there is little quantitative data to demonstrate success, testimonials and anecdotal information indicates that the project is viewed as having positive results.

• A multi-stakeholder watershed coalition was formed in the late 1990s with a CFDC providing a staff coordinator and serving as a primary facilitator. Membership in the coalition has grown from fifteen participants to over 80 groups and 200 members, and the organization was able to obtain Provincial government grants to complete more than 60 projects. These grants were equivalent to $1.75 million, which led to the leveraging of $2.6 million in other funds and $1.3 million in in-kind contributions for a total of $4.35 million invested in watershed improvement.