Franklin County Board of Commissioners, One Columbus and Columbus Urban League Align to Support Black and Historically Underutilized Businesses
The COVID-19 Pandemic was a devasting blow to everyone. Many are still trying to navigate home, work, and school while getting use to what is at least for the time being our “new normal”. For small business owners, the pandemic wreaked additional havoc, many facing devastating financial loss and for some complete closure. Local agencies have come to the aide of small business owners with financial relief.
The Franklin County Board of Commissioners, Central Ohio economic development leader One Columbus and social justice and racial equity advocate Columbus Urban League are collaborating in a historic partnership dedicated to supporting black and underutilized businesses historically diminished by the economic injury of systemic racism and more recently, the disproportionate detrimental impact of the COVID-19 pandemic.
The new Franklin County Business Growth and Equity Alliance (the Equity Alliance) will focus on implementing economic equity and shared prosperity strategies. The priority initiative is to establish the Franklin County Community Equity Fund to provide grants to small black-owned businesses, laying the foundation for a Community Development Financing Institution (CDFI) to serve the unmet credit needs of low and moderate wealth communities.
“Minority owned businesses were disproportionately left out of the federal assistance with only three percent having had access to the federal aid in Ohio,” said John O’Grady, President of the Franklin County Board of Commissioners. “Our funding combined with this new collaboration with One Columbus and the Columbus Urban League will not only help provide immediate assistance which is so critical right now, it can help these businesses survive the pandemic and fully participate in our economy for the years to come.”
Adopted by the Commissioners on August 4, the goals of the new alliance are to improve access to capital; increase the number of Black-owned vendors hired by corporations and governments; promote Black business representation and success in high-growth industries; strengthen the Black business support ecosystem; and build a data repository to monitor progress.
“Our team rapidly and strategically stepped forward to help minority businesses back in March,” said Stephanie Hightower, President and CEO of the Columbus Urban League. “With funding from Franklin County and the City of Columbus, we’ve already helped 800 clients earn nearly $4.5 million in grants or loans and save at least 935 jobs. We’re the home of the state’s Minority Business Assistance Center for our area. Everyone is weathering the same storm, but we’re not all in the same boat. Now is the time to send a life preserver to keep small business afloat today and shore them up for greater success in the future.”
The Franklin County Community Equity Fund is founded on a $2 million initial investment of CARES Act funding from Franklin County. These seed dollars will support three different grant funds: Small Business Stabilization Grants limited to companies of five employees or less with a cap of $15,000; Small Business Job Retention Grants of up to $100,000 for companies of more than 5 employees; and Small Business Technology Retention Grants of up to $50,000 to accelerate growth of digital or technology companies owned by African Americans.
In order to strengthen the county’s entrepreneurial ecosystem, the Equity Alliance also intends to lay the foundation for a sustainable Community Development Financing Institution, a unique approach to providing access to capital and resources that under-resourced communities and businesses need to prosper.
“One Columbus looks forward to supporting Franklin County, the Columbus Urban League, and most importantly, the entrepreneurs and businesses within our minority community to close the opportunity and wealth creation gaps in our region,” said Kenny McDonald, President and CEO of One Columbus.
Alliance principals expect to begin work immediately and initiate grant opportunities over the next 30 days.
- Small businesses owned by African Americans and historically underutilized individuals remain at greatest risk of failure due to COVID-19 and systemic racism. Minority and women-owned enterprises were predicted to comprise a disproportionate portion of the more than half of U.S. small business failures.* And, in fact, more recent research finds that 41% of Black-owned businesses, 440,000 enterprises across the country, already have shut their doors—compared to just 17% of white-owned companies.**
- A variety of factors lie behind this inequity, such as limited savings, a lack of strong banking relationships, reduced access to expert legal and financial guidance, misunderstandings about loan requirements, and an absence of data and resources to diversify. These factors, clearly connected to systemic racism, already hindered Black and historically underutilized entrepreneurs. COVID-19 exacerbated these inequities, just as it has done for family incomes and health outcomes.
- Franklin County Board of Commissioners has sought to address systemic racism head-on, calling it a public health crisis, ensuring that the issue helps drive anti-poverty innovations, investing in the Forward Cities Community Accelerator, and dedicating funding to fuel recovery and reform efforts.
- One Columbus, Central Ohio’s premier economic development organization, has made shared prosperity a key goal and, together with the social justice and racial equity advocates at the 102-year-old Columbus Urban League, they seek to join in partnership with Franklin County and launch the Franklin County Business Growth and Equity Alliance.
Franklin County Business Growth and Equity Alliance
- The Alliance will pursue five key objectives to support a more inclusive economy. They include: improving access to capital; increasing the number of Black-owned vendors hired by corporations and governments; promoting Black and historically underutilized business representation and success in high growth industries; strengthening the Black and historically underutilized business support ecosystem; and creating a data repository to monitor progress.
- Key strategies for the new alliance are founded on a $2 million initial investment of CARES Act funding from Franklin County. These seed dollars will support three different grant funds: Small Business Stabilization Grants limited to companies of five employees or less with a cap of $15,000; Small Business Job Retention Grants of up to $100,000 for companies of more than 5 employees; and Small Business Technology Retention Grants of up to $50,000 to accelerate growth of digital or technology companies owned by African Americans.
*Goldman Sachs National Small Business Survey 2020.
**University of California, Santa Cruz, and National Bureau of Economic Research.