3.0 Conclusions and Recommendations

This last section summarizes the key findings of the evaluation and presents suggested recommendations to improve the program.

3.1 Key Findings

Design and Delivery

According to evaluation findings, the terms and conditions of the program are deemed very flexible and are appreciated for that reason. There is an ongoing debate whether 100% stacking should be allowed. While some advocate that organizations should be able to leverage funds from other sources, others think that many organizations are not capable of obtaining funds from other sources.

Findings also indicate that the selection process of projects lack structure and rigor (see Recommendations in next section). There is a need for clearer selection criteria and policy parameters. Evidence indicates that WD Network partners and most eligible organizations are aware of SDN funding, although not always by name. According to survey results, program recipients (service delivery organizations) are generally satisfied with the delivery of the program.

The monitoring system to SDN is currently being reviewed by WD. According to key informant interviews and the file review conducted, rolling-up the results is a major challenge and there is no consistent reporting when the evaluation was conducted. The monitoring process is considered timely.

Success of SDN

As indicated in the profile (Section 1.0), the objective of the program is to increase access to business services in Western Canada using service delivery agreements with community-based organizations (including Community Futures Development Corporations and other organizations, such as NGOs and economic development organizations working with Aboriginals and people with disabilities) through business services, capital loan funds, community research studies and other business development projects.

Overall, survey findings show that SDN is successful and that significant, incremental impacts are likely to be achieved as a result of the program. Evaluation evidence from various sources show that the vast majority of projects are completed with success and are useful. Projects involving research or studies generally met the needs of the funded organizations and their partners. Software and equipment acquired by SDN is highly appreciated and help the organizations work with a comparable level of equipment, ensuring effective exchanges between organizations as well as quality client service.

Training projects are useful and meet expectations, according to evidence. Most participants are satisfied with training and use (or expect to use) what they learned. Business loan recipients use loans to acquire assets and/or develop new services or products. Loans also create a sizeable number of jobs, according to evidence. While some capital loans are very successful, others however have suffered from high loss rates. Lack of resources to support loan recipients is among the key explanations of high losses.

Cost-Effectiveness and Alternatives

Most WD respondents considered that the program is cost-effective, although more funds could probably be leveraged from other sources (most projects do not involve other funding sources). The budget amounts are considered minimal and that decreasing budget allocations per projects should not be considered.

Rationale

According to evaluation findings, there is a need for funding for projects funded by SDN, especially for projects in large urban centers for specific groups such as Aboriginal groups and people with disabilities. There is also a need for a flexible program that allows regional offices to provide funding without going through an HQ approval process.

SDN is consistent with WD priorities and objectives. Evidence from other evaluations also indicates that there is a need for CEDO and CEDIP components.

3.2 Recommendations

Overall, the findings lead the consultant to conclude that there is need for the SDN, and that it is highly likely that the SDN projects have an incremental impact in terms of providing access to capital and business services.

However, the evaluation indicates that a number of aspects of the program could be improved. The following recommendations are proposed:

Maintain SDN Terms and Conditions. The evidence gathered during the course of this evaluations shows that most SDN funded projects are effective and achieve their expected results. The evaluation also shows that there is a general need for the terms and conditions, but with some improvement in terms of design and delivery (see next recommendation).
Clarify Guidelines. The evaluation has shown that there are a number of inconsistencies in the delivery of SDN. There should be stricter guidelines regarding all aspects of the delivery of the G&Cs, including guidelines in the following areas:
1. Selection criteria. The criteria for selecting projects should be formalized and transparent. The criteria should be based on a weighted point system and reflect WD national and regional priorities.
2. Project monitoring. The guidelines to performance monitoring should be clearly defined and applied systematically.
Increase Success Rate of Capital Loans. While some capital loan projects have been very successful (justifying this type of project), some have met serious challenges as indicated by the rate of non-performing loans (including write-offs). WD will need to develop a better approach to diagnose the risks and capabilities of the organizations to administer the loan funds and support loan applicants (including preparation and follow-up). Organizations partnering with other organizations providing complementary services (business plan preparation, business information, etc.) should be favored. If some organizations lack resources to support entrepreneurs, WD could provide additional support to ensure that the organizations have sufficient staff resources (skills, knowledge and numbers) to support loan applicants. Overall, a maximum write-off rate could be targeted for most at-risk populations (people with disabilities and Aboriginal entrepreneurs).
Encourage Third-Party Participation. Evidence shows that a minority of projects involves other funders. Options and strategies should be developed to encourage other sources of funding. However, some projects will remain very difficult to fund through other sources, including capital fund projects and infrastructure projects for the CFDCs.
Follow-up on Monitoring Improvements. When the evaluation was conducted, monitoring was considered a challenge. Results information was not standardized and not summarized. There are apparently ongoing efforts to improve the process. WD senior managers will need to ensure that these improvements will be implemented in a timely manner. Follow-up will be needed to ensure that the new monitoring approach allows WD management to gain better results-information for decision-making purposes, and to meet accountability requirements.

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