You ever wonder why the Edward Blum’s of the world are coming for organizations like Fearless Fund and Hello Alice which provide funding for Black entrepreneurs? We knew that conservatives would use the Supreme Court’s decision as a precedent to go after racial equity programs across industries, but why make Black entrepreneur support your first stop?
Here’s why.
Entrepreneurship is the #1 Wealth Creator in the World.
Not home ownership. Not 401Ks, savings accounts nor life insurance. Not even inheritance.
Entrepreneurship.
These right wing activists fear a world where fair play is the norm, and are committed to cutting us off at the source of our greatest opportunity: business ownership.
In recent weeks, we at BIA have fielded questions from journalists who are all wondering the implications of this moment for Black entrepreneurs and other entrepreneurs of color.
Here are the stakes as we see it.
Corporations
Many corporations are sitting on the sidelines waiting to see how this all shakes out. Some have made very public commitments to racial equity over the last several years and want to hold true to their word. They additionally have committed employees who are carrying forward the cause in the midst of the pause. From a viability standpoint, many understand the business case for diversity, equity and inclusion (DEI), and (at least publicly) want to do the right thing, but also don’t want to draw the ire of the Blum’s of the world or otherwise become a target of conservative backlash. Here are the potential implications of how corporations move in this moment, for Black entrepreneurs.
- Supplier diversity programs which are designed to provide disadvantaged groups with access to government contracts are likely to come under scrutiny. These programs are already under-resourced so further disinvestment would be disastrous for Black business.
- Nonprofit grantmaking that comes through corporate foundations funds much of the entrepreneur support programs that exist today. Given institutional philanthropies slow uptake in supporting entrepreneurship as a means of driving social impact, the tying off of corporate resources could bring Black entrepreneur support to a crawl.
Corporate accelerators focused on diverse groups have become commonplace and serve as direct access points to corporate contracts and even Black startup acquisitions. Doing away with these sorts of programs would erect new barriers to enterprise level opportunities for Black founders.
Government
Contrary to popular understanding, our American government is highly constrained in its ability to advance racial equity because Conservative forces use equal protection and non-discrimination language intended to reverse racial discrimination to instead, freeze it in place. That’s why progressive efforts like this Black Entrepreneur Fund in Canada, would struggle to see the light of day in the Land of the Free. Instead, the government uses the language of “disadvantaged groups”, to direct resources and opportunities to the Black community and other communities of color. Here’s where we currently stand on the government side of things.
- The 8(a) program is the most effective program connecting Black businesses to government contracts. In August, a federal judge struck down a provision of the Small Business Administration’s (SBA) 8(a) loan program. As a result, the SBA temporarily suspended the intake of new applications. Given that Black firms receive less than 5% of government contract spending as it is, losing this program would act as a real gut punch to Black wealth creation in this country.
By targeting Black entrepreneurship, conservative forces in this country see an opportunity to freeze inequality in place. To stamp out racial and economic progress so that the scales remain imbalanced and those on the margins, despite their growing numbers, continue to “know their place”.
Government and corporate sector responses don’t begin to factor in the ways that this backlash is tamping down public support for Black businesses. Or how it reinforces preexisting bad behavior witnessed in places like Silicon Valley where approximately 1% of VC goes to Black founders.
By targeting Black entrepreneurship, conservative forces in this country see an opportunity to freeze inequality in place. To stamp out racial and economic progress so that the scales remain imbalanced and those on the margins, despite their growing numbers, continue to “know their place”.
Well, at BIA, we know our place… and it’s in the arena with Black entrepreneurs who are scrapping every day to get a fair shot at the American Dream.
And this week, we get the opportunity to put on display precisely how they continue to beat the odds. On October 18th, we launch our 2nd edition of the BLADE Blueprint, a study that explores how Black entrepreneurs are creating wealth through digital businesses.
The findings will blow you away. RSVP Today.
