|REAP Works: Building
Assets and Income
A new report based on a REAP member survey shows that
the program has helped rural people raise business and
personal asset levels and increase family income.
BY JON BAILEY, RURAL
RESEARCH & ANALYSIS PROGRAM DIRECTOR
Through funding from the Ford Foundation and the C.S.
Mott Foundation, the Center for Rural Affairs recently
studied participants in REAP’s small business
development program to determine the success of REAP in
building income and asset levels. This article
summarizes the findings.
Prior to involvement with REAP over 55.1 percent of
participants had business assets below $5,000. That is
to be expected – the primary objective of REAP is to
help startup businesses, those with no or very low
business asset levels.
Our survey showed that the business asset level of REAP
participants changes significantly after their
involvement with REAP. The number of participants with
the lowest level of business assets declined by nearly
40 percent; those with the highest level of business
assets (over $50,000) increased by over 117 percent.
Our survey also suggests a very clear “step up” process
in business asset holdings. We provided respondents with
four levels of business assets. The changes in each step
before and after REAP involvement are:
STEP 1 (below $5,000) decrease 37%
STEP 2 ($5,000 -19,999) increase 198%
STEP 3 ($20,000 – 49,999) decreases 40%
STEP 4 ($50,000 and over) increase 117%
These data suggest REAP businesses were “stepping up” to
the next highest asset level after their participation
in REAP. In any event, REAP participation appears to
have a positive affect on business asset levels.
Our survey shows that REAP has a significant impact on
raising the asset levels of participant households.
Using the same asset levels as above, the survey shows
that the number of households at the lowest asset level
remained unchanged after their involvement in REAP.
However, the number of households at the next two levels
decreased by 15 percent and 20 percent respectively. The
highest household asset level increased by nearly 43
percent after involvement with REAP.
It is clear that REAP has helped build asset levels both
in businesses and in participant households, providing
for stronger futures for many participants, their
families and their communities.
Gross business revenue follows much the same pattern as
business assets. As expected, most respondents had very
low income levels before REAP involvement – 53 percent
had less than $5,000 in gross business revenue. But the
same “step up” process in revenue seems to be at work
after REAP involvement. Using the same levels for gross
business revenue, the survey shows:
STEP 1 (below $5,000) decrease 23%
STEP 2 ($5,000 – 19,999) increase 99%
STEP 3 ($20,000 – 49,999) decrease 12%
STEP 4 ($50,000 and over) increase 67%
Although the largest percentage of REAP participants in
the survey still have gross revenue at the lowest
levels, revenues are improving after REAP involvement.
REAP has also shown significant affects on the family
income of participants. The number of participants with
family incomes below $15,000 (a generally accepted
definition of the “poverty level” for many families) was
cut in half after REAP involvement.
Conversely, the number of REAP participants with family
incomes over $50,000 increased by over 25 percent after
REAP involvement. It appears from these results that
REAP has helped alleviate poverty in many families by
helping to increase family income.
While REAP was designed as a rural economic development
strategy that fits the scale and needs of many rural
communities, it is important to note its contribution to
the betterment of people through asset building. Assets
like businesses bond one to a place and help to build
strong, more sustainable communities.