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Eliminating Barriers Facing Entrepreneurs of Color

November 19, 2021
  • Barriers to financial resources
  • Barriers to financial resources
  • Leadership Gaps
  • Diverse Organizations and Leaders are a Must-Have
  • How to Support Entrepreneurs of Color
  • What’s Possible: Camelback Ventures
  • What’s Possible: The 1954 Project
  • Our Commitment
    Barriers to financial resources

    Entrepreneurs of color face significant hurdles securing resources to turn their dreams into reality.

    This is evident when accessing private resources. African American business owners specifically are 5.2 times more likely to be denied a loan, and minority small business owners are denied credit at disproportionately high rates when compared to white peers.

    Barriers persist when accessing philanthropic resources. Black entrepreneurs in the Echoing Green program, an organization that supports emerging entrepreneurs at the intersection of social justice and social innovation, have unrestricted funding from funders at rates 76% smaller than their white-led counterparts. The stark disparity in unrestricted assets can be viewed as a proxy for trust.

    And according to New Profit, during the mezzanine stage of growth—when organizations have maximized bank and asset-based loans but need additional funding—Black and Latinx leaders receive only about 4% of philanthropic funding although they make up approximately 10% of nonprofit leaders. This pattern continues in later stages.

    We all miss out when the talents and experiences of our nation’s rich diversity are hindered.

    Leadership Gaps

    These many and systemic barriers all contribute to entrepreneurs of color entering the field at lower rates. 75% of executive directors in the nonprofit center identify as white, despite the country’s growing diversity. Disparities by leader race persist even when taking into account factors like issue area and education levels.

    Diverse Organizations and Leaders are a Must-Have

    Supporting entrepreneurs of color isn’t a nice-to-have. It’s a must-have. Per Echoing Green, “These leaders often bring strategies informed by an intimate understanding of the racialized experiences of communities of color and the issues these communities face.”

    Unrealized Impact: The Case for Diversity, Equity and Inclusion finds that DEI efforts are strongly tied to staff retention, particularly for people of color. They also fuel broader, organizational mission effectiveness. For example, in education more diverse, equitable and inclusive organizations are linked to improved student learning and stronger community connections.

    How to Support Entrepreneurs of Color

    Noting that “without taking active antiracist measures to ensure equity in funding, philanthropists inadvertently contribute to inequities in society,” Echoing Green has issued Five Strategies to Move Forward Together:

    • Invest now and significantly in Black leaders and Black-led organizations, particularly those who are proximate to the communities they serve.
    • Change the way you support Black-led organizations including your approach to capacity building.
    • Support the collective mourning and healing justice work that is required to get us through this moment.
    • Help create mechanisms for racial equity organizations to support one another, share resources and build power.
    • Connect the work to dismantle structural racism to larger, global movements and struggles.

    What’s Possible: Camelback Ventures

    Camelback Ventures is a nonprofit social venture fellowship dedicated to increasing access to opportunity for entrepreneurs of color and women by investing in their ventures and leadership while advocating for fairness in their funding. Guided by the belief that genius is equally distributed but opportunity is not, Camelback identifies local leaders with promising ideas and empowers them to enact change within their communities, providing an intentional blend of coaching, capital, connections, community and curriculum.

    Since 2015 the organization has supported 83+ underrepresented entrepreneurs with social impact ventures around the country. Camelback Fellows have gone on to build their teams, collectively raise over $26 million dollars and impact their communities.

    Fellows include:

    • Vanessa Luna: ImmSchools works to transform schools into safe and welcoming spaces for undocumented students and families.
    • Vincent Cobb: The Fellowship for Black Male Educators is a national community to advance the recruitment, development and retention of Black male educators in schools.
    • Aimee Eubanks Davis: Braven seeks to bridge the education-to-employment gap faced by some of our most promising young leaders, creating a generation of diverse leaders in the process.

    What’s Possible: The 1954 Project

    The 1954 Project is an education philanthropy initiative to fund diverse Black leaders, led by the Black community in partnership with allies. With the goal of raising $100 million, the organization invests in initiatives that will increase the number of Black educators and leaders throughout the education landscape, that will create more effective and culturally affirming teaching and learning models and that will strengthen pathways from education to career in order to drive economic mobility in the Black community.

    Explains Liz Thompson, President of the Cleveland Avenue Foundation for Education (The CAFE), which runs The 1954 Project: “The 1954 Project seeks to radically reimagine how philanthropy connects with diverse Black leaders in education by providing these leaders with substantial, flexible support in order to drive innovation, improve student outcomes and create lasting systemic change.”

    In 2021, The 1954 Project announced its inaugural class of Luminaries. Among the entrepreneurs receiving a $1M grant are:

    • Nicole Lynn Lewis: Lewis is the founder and CEO of Generation Hope. To ensure all student parents have the opportunities to succeed and experience economic mobility, Generation Hope engages education and policy partners to drive systemic change and provides direct support to teen parents in college as well as their children through holistic, two-generation programming.
    • Adrian Mims: Dr. Mims is the founder and CEO of the Calculus Project which exists to disrupt and reverse racial achievement gaps in higher-level math that ultimately predict economic outcomes for students.
    • Hiewet Senghor: Senghor is the founder and CEO of the Black Teacher Collaborative, a nonprofit organization that believes in the genius and beauty of Black children and the unique role of Black teachers in cultivating those gifts.

    Our Commitment

    The Walton Family Foundation supports innovation, new ideas and — above all — community-led change. We are committed to ensuring our work not only reflects but is guided by the voices and needs of the communities where we work. This means committing resources to help grantees effectively and sustainably advance community-developed solutions that deliver lasting progress and drive meaningful change.

    This work cannot be done without prioritizing diversity, equity and inclusion. In the grants we make and the collective work we undertake, we will consistently act on our conviction that when people with different ideas and backgrounds are all at the table, this collective and inclusive effort yields more sustainable and innovative solutions. For this reason, we will strive throughout our work to continually and intentionally:

    • Engage and elevate organizations from a diverse range of backgrounds.
    • Ensure our approach is clear, fair and consistent for every grantee, and
    • Encourage our partners to prioritize diversity, equity and inclusion within their organizations.

    We are also committed to developing innovative approaches and building new partnerships that bring people, resources and ideas together – across government, local communities and the private and philanthropic sectors. We will continually endeavor to be a force multiplier by engaging with and beyond our existing network of allies and experts to facilitate additional partnerships that can further accelerate and expand the impact of our grantees’ work.

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