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Creating target participation goals requires little direct funding. Programs that actively build capacity and create networking opportunities, however, generally require staffing and funding. This often is part of a municipal budget, but there are different ways to approach it.
DOT. Local transit agencies receive 10 percent back on the cost of a contract every time a Disadvantaged Business is hired. This incentive alone makes it financially worthwhile to develop a minority contracting program, and is one reason why they are most common in transportation-related projects.
CDBG. Community Development Block Grants have been used for some capacity building projects. The Black Contractors Association in San Diego received $1,500,000 through CDBG funds and used it to build a comprehensive Apprenticeship Training Center. Winning Opportunities for Responsible Contractors (WORC) targets companies who do less than $10 million in business annually and offers classes on the business of contracting - software, bonding requirements, certified payroll, etc., and pairs contractors with First International Bank and Willis Corroon Surety Co. who coach contractors individually. WORC was partially funded by CDBG money.
State economic development agencies may be inclined to support programs to develop local businesses. For example, WORC was partially funded by an award from the California Technology, Trade, and Commerce Agency.
States may also have their own offices of Minority and Women Business Enterprises, like Washington State's (currently threatened by budget cuts).
Non-compliance fines. Any program that has strong enforcement can direct fines for non-compliance back into the program itself.
RFP standards. While active capacity-building and certification programs generally require some funding, building a commitment to increasing minority business participation into agency RFPs and community benefits agreements should be a fairly low-cost measure. San Francisco's Women/Minority/Local Business Use Ordinance, for example, required contract awarding departments to discount bids by up to 10 percent to firms that are at least 51 percent women- or minority-owned. Local business enterprises received 5 percent discounts. When this ordinance came up for renewal in 1998, it was considered to be a potentially no-cost measure - no specific funding was sought for it.
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