Entrepreneurship and state/mental health center relationships

An effective Community Mental Health Center (CMHC) program in entrepreneurship--the provision of services in the marketplace at a profit to subsidize other programs--requires the support and encouragement of the state-level mental health authority. This paper discusses potential financial, programmatic, political, and managerial risks and rewards to CMHCs and to state authorities from such efforts. As each party faces certain risks as well as rewards from such efforts, it is important that they participate in a process of mutual risk reduction involving: Documenting and legitimizing the entrepreneurship program; Separating funding for seed monies and working capital for ventures, Restructuring the Centers' finances and/or corporate structure to reduce the problems of funds diversion and comingling, Negotiating in advance how the proceeds of the ventures will be used to benefit programs, and Providing technical assistance to enhance the probabilities of success in such ventures. For these steps to work the state authorities must be willing to give up some financial and programmatic control to motivate entrepreneurship on the part of CMHCs.