Meet Your Silent Partner
According to its dues schedule, annual membership fees for the National Small Business Association rise from $50 to $625 as a member company grows. But most pay the minimum, and the NSB is happy to get it.
The smaller of two national organizations representing exclusively small business interests in Washington, the NSB knows little about who its members are, except that there are fewer and fewer of them. Its ranks decreased by 2,000 companies last year, falling to a total of 45,309. All but two of its field salesmen have retired. And, increasingly, when reporters from the New York Times or the Washington Post want quotes from a small business spokesman, they call NSB's crosstown rival, the 512,000-member National Federation of Independent Business.
Thus it's a bit surprising to learn that congressional aides consider the NSB one of the most innovative of the business lobby groups and one of the most pragmatic. One House aide, who works for Rep. Berkley Bedell (D-Iowa), illustrates it this way: "Say the government proposed a new environmental regulation. The U.S. Chamber of Commerce would call it creeping socialism and oppose it. The National Federation of Independent Business would say its members once voted to oppose any new environmental regulations. But the NSB would quietly go to the agency and ask if it had ever considered excluding companies with fewer than 50 employees from meeting the proposed regulation. The exclusion would be written in, and everybody else would claim a victory for small business and ask where NSB had been during the fight."
That hypothetical anecdote contains several points worth making about the NSB. As a lobby for small business, it works quietly and often effectively within the federal and congressional bureaucracies on problems of special interest to its members. It does good work, but it doesn't know how to draw attention to itself. "The Regulatory Flexibility Act wouldn't have passed without [NSB lobbyist] Jerry Gulan," says Jere Glover, a former aide to the Small Business Administration's chief counsel for advocacy. But the NSB's regflex role is a well-kept secret outside of Washington.
When the U.S. Chamber of Commerce's president, Richard Lesher, speaks in public or to the press, the words come out of his mouth with quotation marks around them. The NSB has no such quotable spokesman. When the NFIB released its recommendations for reforming Social Security last fall, it sponsored a day-long seminar, invited political hot shots, and made sure that the national press and television were there. The NSB doesn't indulge in such showmanship.
Nor does the NSB believe in making partisan alliances, even when to do so would seem to strengthen its image. During the 1981 tax debate, for example, the U.S. Chamber of Commerce and other business lobbies urged members and legislators "to support the President" on his general economic program. The NSB, on the other hand, decided to support, or not support, specific tax measures according to their direct impact on small business. It didn't matter whether the proposal came from Reagan or from liberal Democrats. The "10-5-3" depreciation plan was, the NSB decided, a symbol of Reaganomics rather than an answer to small business tax problems. It pushed, unsuccessfully, for a more modest accelerated depreciation bill that would have left room for additional cuts in corporate income tax rates and for other initiatives aimed primarily at small companies.
Herb Liebenson, the NSB's president, and NSB trustees argue that keeping its policymaking procedures informal and out of the hands of the membership at large makes possible such flexibility as it demonstrated during the tax debate. Consequently, the vast majority of NSB members get involved in the organization only by mailing in their annual dues, though some also use its insurance and procurement services. (See "Private Offerings for the NSB Membership," page 137.) Fewer than 100 sit on a policy advisory committee that meets only once a year.And even the 35 board members never vote on hard-and-fast policy positions. Liebenson and his five-person Washington staff ultimately decide what the NSB will say is best for small business, and how it will say it.
One NSB trustee expresses frustration that "we don't know how to promote our own cause." He and others worry that Congress and Administration officials may stop listening to an organization whose power base is visibly slipping. After all, Congress pays attention to organizations that influence voters.
Liebenson appears unperturbed. The NSB's membership growth may be stalled, Liebenson says, but Congress and the Administration continue to consult it on small business matters. The competing NFIB is "not burying us," he insists. And he asks, "What the hell difference does it make if the world knows about what we do?"
It made a difference in November 1937, when DeWitt Emery wrote letters to 200 company presidents. "The sheriff is about to get my business," he told them. "How are you doing?" Emery's Monroe Letterhead Corp. of Akron, Ohio, had been hit, he said, "by social security, unemployment insurance, increased county and state taxes, higher materials cost, and... increased wages." Small businessmen like him, he wrote, were "suckers who take what's handed to them." One hundred sixty of the business owners responded and agreed to join Emery in creating the NSB. Although other national small business associations also sprang up in the late '30s, the NSB is the only survivor of that era.
"By and large," says Carl Beck, an NSB trustee since 1958, "the association's policy has been consistent since 1937: Small business needs to band together to be sure it's heard by the federal government."
Emery, by all accounts, ran the association during his lifetime exactly the way he wanted to run it. His views were the NSB's views. Even since Emery's death in 1955, the NSB's policies have reflected the views of a relatively small, stable group of insiders among the association's staff and board. Beck is not the only trustee to have held his seat for 10 years or more. Trustees are nominated and elected to office by the existing board, and the average trustee is more than 55 years old. Liebenson, 61, joined the NSB staff in 1958.
With fewer than 50,000 members spread over 435 congressional districts, the NSB does not wield much grassroots clout. Even in districts where it does have substantial membership, the NSB's system for involving members in the lobbying effort is judged ineffective by other association executives.
"We've got to grow, or we're going to die," says NSB chairman Richard Tittle, who dates the organization's malaise from the sudden death two years ago of its veteran Washington director, John Lewis. Liebenson, who succeeded Lewis, had been a strong legislative director, Title says, but as the NSB's chief operating officer for the past two years, Liebenson "wants and needs help."
This spring, Tittle says, the NSB will launch a five-year growth program that will and 250,000 members to the rolls by the end of 1983. The organization will use a field sales force to sign up recruits but Tittle insists that most of the new members' dues will be spend on lobbying, not on paying big sales commissions.
"If it takes an NFIB type of operation," says Beck, referring to the competition's aggressive sales force, "then we don't want to go that way. Their emphasis has been on sales while ours has been on accomplishments."
References to the rival NFIB, many of them defensive, are common from NSB officials. Although both organizations decry the damage done to small business's Washington interest by the sometimes unfriendly competition between them, merger attempts have foundered over the pecking order of the individuals within a merged staff.
Liebenson says that old DeWitt Emery was a hustler who, when he went into a town to give a speech, spent all of the next day in the same town signing up members. What the NSB lacks today is Emery's style of hustle.