Economic Development Produces Hope in the Disadvantaged Delta

In the Mississippi River Delta, one of the Nation’s most disadvantaged regions, an unusually effective development organization is enabling businesses to grow and thrive. Now, the achievements of the Enterprise Corporation of the Delta (ECD) have brought it national recognition in the form of a $20 million grant from the W.K. Kellogg Foundation. “ECD’s demonstrated track record of success led the Kellogg Foundation to approach us,” explains Garrett Martin, ECD’s director of community development and policy. “They searched the Delta region to find an organization that could help them take their existing regional work to the next level. The fact that ECD has an established monitoring and evaluation system that actually informs its practice was important.”

ECD is a private, nonprofit business development financial institution whose primary mission is to improve the quality of life for low- and moderate-income residents of the Delta region of Arkansas, Louisiana, and Mississippi. ECD accomplishes its mission by giving financial and technical assistance to firms, entrepreneurs, and homeowners; forming strategic partnerships with private, public, and nonprofit organizations; and promoting the development of the region’s human and economic assets.

Evaluation with a purpose. “For the Kellogg Foundation, there were three main factors in choosing to make a grant to ECD,” Martin says. “The first was its demonstrated track record of success. The second was its good stewardship of its resources. And the third was its partnerships with public and private agencies both inside and outside the region.”

Each of these factors is related to ECD’s overall businesslike and practical philosophy. It is an organization that pays a great deal of attention to the bottom line and strives to set workable, measurable objectives. Yet, it also has a vision for the Delta region as one of opportunity rather than just severely disadvantaged. ECD’s monitoring and evaluation system is prime evidence of this approach. For instance, rather than just measuring jobs created, which can be somewhat nebulous, ECD measures hourly wages and hours worked by using employers’ tax reports. This kind of careful measurement then is used to revise ECD’s programs. ECD has used such careful techniques for tracking its progress to create a sophisticated management information system that integrates program operations, monitoring, analysis, and design.

A wide range of services—and success. The 1.6 million Delta residents must cope with life in one of the country’s most economically distressed regions. Barriers to business development include low education levels, outmigration, and scarce resources. In addition to its long history of plantation agriculture and low wages, limited training opportunities and inequalities continue to impede the region’s social and economic progress.

To meet the challenges of this depressed regional economy, ECD has given financial and technical assistance to more than 1,200 firms and entrepreneurs and helped create more than 7,940 new jobs since 1995. ECD works in three main areas: commercial finance, technical assistance, and the Delta Reinvestment Fund. Since 1995 ECD has closed 171 loans worth more than $27 million, leveraged $33 million in additional financing from other sources, and made nearly 40 percent of its loans to minority- and women-owned businesses.

To provide technical assistance, ECD has developed a network of public and private technical assistance providers that assist Delta businesses in areas such as workforce development, sales and marketing, accounting, and engineering. These efforts include FastTrac, a training program that helps entrepreneurs learn to use low-cost marketing strategies, develop financing strategies, hire personnel, and manage cash flow; the Delta Employment Enhancement Project, which promotes public programs and incentives that benefit low- and moderate-income workers and their employers; and Delta BusinessLINC, which facilitates mentoring, buyer-supplier ties, and other business relationships between large corporations and smaller Delta firms. More than 1,000 entrepreneurs have benefited from ECD’s technical assistance and training programs.

Finally, through the Delta Reinvestment Fund, ECD creates partnerships to buy, package, and participate in loans with other lenders; provide technical assistance and loan administration services to improve the management capacity of smaller loan funds; and participate in public programs that provide and leverage capital for small businesses and homeowners.

ECD has achieved remarkable success in assisting Delta businesses. For example, ECD has helped Skyline Bus Tours—the first African-American-owned bus charter business in Monroe, Louisiana, a largely disadvantaged Delta city. The company began operations in March 1999 and provides a number of services to residents of northern Louisiana and southern Arkansas.

Skyline has transported 9,775 clients on 624 trips around the country, helped 18 welfare-to-work individuals retain jobs by providing transportation services, and created jobs for 3 part-time drivers and 1 part-time mechanic. ECD has provided Skyline with access to resources for business-skill training, financing for $67,500 in loans, and additional financing to buy a second bus.

Innovative, entrepreneurial partnerships. Last fall, ECD’s accomplishments as one of the country’s most successful community development financial institutions were recognized with the announcement of a new Emerging Markets Partnership of ECD with the three Delta states, Fannie Mae, the W.K. Kellogg Foundation, and Delta BusinessLINC. This new partnership plans to generate $500 million in economic benefits during the next 5 years and is an outgrowth of Kellogg Foundation’s Mid South Delta Initiative. The $20 million from the Kellogg Foundation will serve as seed funding. Fannie Mae plans to invest at least $45 million in customized mortgages that make homeownership possible for disadvantaged people with less-than-perfect credit. Large corporations with a Delta presence, such as FedEx, BellSouth, and Southwestern Bell, will be giving small businesses mentoring and other help through Delta BusinessLINC.

ECD has achieved success by taking an entrepreneurial approach to its public and private partnerships. When the state of Mississippi was recently working on economic development legislation, ECD’s input enabled the law to recognize more counties as being eligible for participation.

In the private sector, similar entrepreneurial activities characterize ECD’s partnerships. It realized that more help was needed to build the rural region’s digital infrastructure and it approached a private firm, Air2Land, which had developed an Internet service provider “backbone” for some of the region’s cities. With a $250,000 investment from ECD, Air2Land has seen a positive cash flow much sooner than expected because of demand for Internet service. It now is negotiating with ECD for a second investment.

Overall, ECD is helping change the perception of the Delta from distress to possibility. Because ECD has the vision to see the Delta’s glass as half-full rather than half-empty, and because it backs up that vision with solid business techniques, its work is producing not only a good return on investment but also hope.

For more information, contact: Garrett Martin, Enterprise Corporation of the Delta, 308 East Pearl Street, Suite 400, Jackson, MS 39201; e-mail: gmartin@ecd.org, Web: www.ecd.org.