Rutgers initiative to help minority and women-owned businesses

Linda Lindner//June 23, 2020

Rutgers initiative to help minority and women-owned businesses

Linda Lindner//June 23, 2020

The Rutgers NJ/NY Center for Employee Ownership together with the W.K. Kellogg Foundation on Monday announced a program designed to preserve minority and women-owned businesses, save jobs, build employee wealth, and strengthen local economies affected by the COVID-19 pandemic.

The nationwide initiative centers on employee ownership strategies that enable business owners to sell the enterprise to their employees.

Research by the Rutgers Institute for the Study of Employee Ownership and Profit Sharing, supported by the Kellogg Foundation, finds employee ownership enables low-income and moderate-income workers to build significant wealth, narrowing the gender and racial wealth gaps.

Earlier Rutgers-led research found that employee-owned firms have the potential for higher productivity, lower turnover and more stable employment when the firm implements a supportive corporate culture.

“A large percentage of retiring business owners have no succession plan and no family members willing to take over,” said Rutgers NJ/NYCEO Executive Director Bill Castellano. “The pandemic is pressuring them to make a quick decision under severe economic conditions. Our program highlights employee ownership strategies that can help their businesses, employees, and local economies succeed.”

Rutgers NJ/NYCEO, a branch of the institute that works directly with businesses, will launch a national awareness-building campaign as part of the new program. This will include:

  • Conducting nationwide outreach to inform businesses about succession strategies;
  • Developing a series of free, online programs guide that will assist through the process of becoming an ESOP or worker cooperative;
  • Educating service providers about these succession strategies; and
  • Extending scholarships to professors from historically black colleges and universities to attend the Institute’s annual employee ownership conferences.

Rutgers NJ/NYCEO, with help from its advisory board members and noted employee ownership organizations, will collaborate with the Democracy at Work Institute to develop the online resources.

“This is an ambitious plan and we’re going to form partnerships all over the country to make it successful,” said Jim Terez, associate director of Rutgers NJ/NYCEO. “We will be talking to federal, state, and local agencies, business groups, chambers of commerce, community organizations, and universities to build awareness of these job-saving strategies.”

The Kellogg Foundation’s grant to the Rutgers School of Management and Labor Relations supports both the Rutgers NJ/NYCEO program and an initiative by the Rutgers Center for Innovation in Worker Organization (CIWO) to diversify leadership in the worker justice movement.