Oregon small businesses grapple with loss of federal aid for minority-owned startups

Melissa Bird’s first business venture held retreats where women and women of color could heal from trauma.

She’d like to carry that positive change into a second business, Mermaid’s Garden, an aquaculture farm retreat she founded with her husband in 2020 with the mission to connect clients back to quality food and land, a connection she finds significant as a Native woman. But it’s been difficult to get it off the ground, Bird said — or to find grounds for her business at all.

“We haven’t been able to get property yet,” she said. “We’ve been looking for property for five years, and one of the issues we’re running into is that funding for something like this is really complicated and difficult.”

Now, Bird says, she’s lost funding and bookkeeping assistance that had helped manage the process.

A Native and disabled veteran-owned company, Mermaid’s Garden is one of many small businesses across Oregon and the nation that received aid through the federal Minority Business Development Agency. The agency worked through local business development organizations like the Northwest Native Chamber.

But the $300,000 in MBDA grant funding the Northwest Native Chamber expected this summer, which paid for its work with Bird and other clients, never came — nor any notice the chamber had lost its funding.

Alexis D’Amato, director of government affairs at Small Business Majority, a national organization that supports small businesses, said many such organizations have seen their federal backing disappear.

“Right now the MBDA is pretty much hamstrung,” D’Amato said. “There’s nothing that they’re really doing right now. All of the staff that I knew are either gone out of the government service or have moved to another role in commerce.”

The loss of funds for the nation’s only agency solely serving the growth of minority-owned businesses is one of many to fall under the diversity, equity and inclusion initiatives that President Donald Trump had ordered removed from the government earlier this year.

Business Impact Northwest, a community development financial institution, or CDFI, works with 3,500 business owners, including women-owned, minority-owned and veteran-owned businesses. It lost all of its $450,000 MBDA grant in June. The non-profit operates with a $8.5 million budget — with about $2.4 million of those funds coming from the federal government.

Its CEO, Joe Sky-Tucker, said that while the organization is still operating services in Oregon, it had to cut its programs for minority-owned businesses, including technical assistance, business idea coaching and strategic planning support.

“Clients are going to get less access,” Sky-Tucker said. “The grants paid for our staff time, but the outreach that we had to do to different organizations to find our clients to be out in the community is really what it’s paying for. In general, non-profits are going to be pretty devastated by these federal funding cuts.”

The Northwest Native Chamber, which supports Native-owned businesses like Bird’s, had to drop its program that helped small businesses grow.

James Parker, the CEO of the Northwest Native Chamber, said MBDA-funded economic development can be a lifeline for low-income communities to develop savings and self-sufficiency.

“When communities that are often underserved and economically distressed areas lack the opportunity to create their own resilience and support systems through entrepreneurship,” Parker said, “what we do is see our communities unfortunately forced towards social services, which has a much higher cost per person than supporting entrepreneurship.”

The Minority Business Development Agency last year said it had created and retained nearly 23,000 jobs nationwide.

Some of the business owners Northwest Native Chamber serves, like Adam Becenti and Adrienne Fainman, are left wondering where they can turn now for support.

Becenti had just started a consulting firm, Black Streak Consulting, this year after abruptly being fired late last year as a tribal relations manager for the city of Portland. He said he was in the early stages of working with Northwest Native Chamber to build the business and had been finalizing a logo design when he learned the chamber could not continue its help.

“I understood,” said Becenti, who ended up paying $800 out of pocket for the work. “It wasn’t too bad … but still, that was $800 that I could have used for other things.”

Becenti said he started his business out of a desire to address systemic issues in tribal affairs departments or offices. As a consultant, he said, he can use his own experiences to build tribal liaison positions to better serve Native communities.

Without financial help from Northwest Native Chamber, Becenti is now looking elsewhere for resources to help launch his consulting firm — but their offerings, mentorship and marketing support pale in comparison to the chamber, he said.

Fainman, CEO of CedarStone, a mass-timber design-build firm based in Eugene, won a $100,000 grant through the state’s Economic Equity Investment Program, to help the business grow.

She had looked to Northwest Native Chamber for help with legal and accounting services to handle the new pressures that came with the influx of funds. She’s uncertain if she’ll be able to get that help now.

“We’ll have to look elsewhere,” Fainman said. “It’s really unique getting support from the chamber because they are a Native-run organization, so the people we talk to understand where we’re coming from. They understand what our world view is in a way that helps them be able to advise us and coach us through doing business in a way that makes sense.”

Sky-Tucker warned that the loss of the MBDA grant is only the beginning of budget cuts. President Donald Trump in May proposed a $191 million cut to the federal CDFI program. Business Impact Northwest is beginning to work through its contingency plans for up to $2.2 million in losses.

“There is a pretty massive threat to these programs,” Sky-Tucker said. “And if they’re willing to come after small business support, which is a very broadly supported on both sides of the aisle issue, what else will they come for?”

For Bird and her business, the next steps are to scale back the bigger vision she had for Mermaid’s Garden, which was to create a retreat space with a fish farm for clients. Instead, she plans to farm and sell fish at a farm stand to show investors her business plan is feasible.

“That won’t cost as much money as it will to do a full scale operation,” she said. “We’re just going to take bite-sized pieces, one step at a time.’”