February 2021

Greetings from the North Dakota Small Business Development Network (ND SBDC, ND PTAC, and VBOC of the Dakotas)!

2020 challenged small businesses unlike any year we have seen before. Lockdowns, unstable supply chains, family and personal sickness, surging COVID-19 community spread, fewer customers shopping local or in stores, and many other things all contributed to the challenges small businesses faced. But at the ND SBDC, we also saw businesses proving to us something we already knew – our small businesses are North Dakota tough, and they faced 2020 head-on. Our network met the demand and helped small business owners and entrepreneurs address their challenges and needs, serving nearly 3,500 individuals with advising and training workshops throughout 2020.

Our organization’s funding is broken down into three main “buckets”: federal, state, and local.

Federal
Funding for the ND SBDC and ND PTAC programs begins at the federal level. The ND SBDC receives funding through the U.S. Small Business Administration (SBA) and the ND PTAC receives funding through the Defense Logistics Agency (DLA) within the Department of Defense. Both of these programs require state and local “match” in order to receive these federal funds. Funding for these programs is structured this way because the economic impacts of both programs are seen and felt directly at the state and local level: the growth of local businesses, enhanced local spending, the creation of more jobs in the state, local tax revenue impacts, quality of life and community vibrancy, and many other local economic and societal gains. The investments into our programs come back to directly benefit North Dakota.

Our third network resource, the Veteran’s Business Outreach Center (VBOC) of the Dakotas, on the other hand, is funded entirely through the federal government by the SBA – no state or local match is required.

State
The federal funding for the ND SBDC and ND PTAC programs comes with a caveat – each must find a certain amount of state and local funds to support operations. The ND SBDC program requires a 100% non-federal match, therefore, for every federal dollar received there must be an equal dollar from a state or local source (a 1:1 ratio). The ND PTAC program currently requires a 60% federal to 40% non-federal ratio.

Since January, we have been focusing on our state funding which is allocated by the state of North Dakota through the Department of Commerce. As North Dakota’s legislature meets to discuss the state’s budget for the 2021-23 biennium we have been offering testimony to the legislature on bill SB 2018, where our programs’ state funds are allocated in Commerce’s “Partner Programs” line and “Discretionary” line.

Local
We operate nine ND SBDC service centers throughout the state of North Dakota. The Lead Center has been hosted through the University of North Dakota (UND) since our inception in 1986. The rest of our service centers are hosted by local universities and economic development organizations and are awarded SBA funding to operate through a contractual agreement with UND. To help the statewide program meet federal match requirements, these centers depend on their hosts and other community organizations such as JDAs, EDCs, Regional Councils, lending institutions, and city or county governments, to provide local funding support in order to meet the 1:1 requirement of the SBDC program.

The Final Product
All of these funding sources come together to support our programs, so we can effectively serve the entire state of North Dakota. While federal funding is our baseline and starting point, we cannot iterate enough how important state and local partners are to our programs. When state and local funding gets cut, the repercussions are two-fold as we then cannot accept all of the available federal funds. Unfortunately, we then must compensate by reducing services and/or consolidating service centers and shrinking our physical reach in the state.

We are working hard to maintain the high quality of our services while seeing an unprecedented increase in demand and we sincerely thank you all for your continued support. 2021 is only the beginning of the real recovery work from the pandemic and its effects on small business in North Dakota. We look forward to updating you on our progress and to continuing our partnerships and relationships with you. Thank you for all you do for the small businesses of North Dakota.

Thank you,
Tiffany Ford, State Director
And all the Staff of the ND Small Business Development Network