It’s been a year since the powerful Spotlight series “Boston. Racism. Image. Reality.” took an honest look at the black experience in Boston. The series set off an avalanche of conversation about the implication and impact of the disparities between the Black and White experience. What was to be done about such issues as the segregation of health care, the imbalance in positions of power held, and the growing racial wealth gap?
I find myself asking now — a year later — has there been any progress on the issue?
Over the past year, a group of leaders in our city has designed and piloted the Business Equity Initiative (BEI), which focuses on supporting black and Latino enterprises as a means of narrowing the wealth gap. The goal is to level the playing field and cut through the barriers that have prevented these small businesses from fully scaling and thriving.
BEI, a program of the Foundation for Business Equity, is creating business acceleration for minority-owned businesses in Boston and across Massachusetts. Initial seed funding was provided by Eastern Bank and in just over its first year of operations, BEI and the participating enterprises it supports are seeing gains that include:
• $11 million in total additional revenue among the first 10 participating minority-owned enterprises
• Total new procurement contracts of approximately $3 million
• Over $1 million in growth capital invested into these local businesses
• 88 new total full-time employees among the first 10 participating minority-owned enterprises
• Partnerships with more than 50 business executives and strategists, the Greater Boston Chamber of Commerce, and the Boston Foundation to create a comprehensive ecosystem of support.
Having a solid business strategy is the single most important step for putting minority-owned businesses on a path for success. Understanding what makes a good strategist is just as important to the success of these businesses as the people who create the strategy and the environment it’s created in. Getting strong strategic advice is important for any business, including those that are minority-owned. Corporations understand this and commonly pay top dollar for leading consultants and talent to develop their strategic approaches. But there is a void in providing such high quality strategic services to black- and Latino-owned small businesses. BEI pairs strategic advisors — business leaders with experience, sector knowledge, influence, and a robust network — with minority business owners, and subsidizes the cost with philanthropic dollars.
In addition, BEI has created an ecosystem of partners to help these enterprises execute their strategies. BEI partnered with the Greater Boston Chamber of Commerce to engage large and mid-sized Chamber member organizations around increasing their purchasing from local minority-owned businesses. Unfortunately, most large corporations spend less than 2 percent of their procurement dollars with minority-owned businesses. The new Pacesetter Initiative at Chamber of Commerce is committed to improving this statistic through a purposeful matchmaking process designed to increase contracts and dollars spent with businesses of color. After just one year, $3 million in new contracts have been awarded to Pacesetter suppliers, many of them from BEI.
The Business Equity Growth Fund was created as a mechanism to satisfy the demand for growth capital to these enterprises. Launched with philanthropic dollars and housed at our city’s community foundation, the Boston Foundation, it operates like a private equity fund. An investment committee of leading finance professionals of color decide what investment dollars, structured as equity-like debt, should go to which minority-owned businesses. To date, $1.5 million in investments have been made.
If we are going to slow down and reverse the growing racial wealth gap and all the issues that come with it, let’s start with securing and growing the black and Latino entrepreneurial class as anchors of wealth and job creators in our community. Having a good strategy and the right tools, and a strong ecosystem in which to execute the strategy, are the necessary ingredients for these companies to grow. When they do, we help to mitigate the wealth gap by creating greater black and Latino ownership equity in businesses, retaining and growing jobs for minorities, and increasing the civic engagement among black and Latino entrepreneurial enterprises. These are steps in the right direction in reversing the racist narrative of our city.
Glynn Lloyd is the executive director of the Foundation for Business Equity and founding board member of the Board of the Black Economic Council of Massachusetts.