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Columbus, OH (May 11, 2022) —The Columbus Foundation today announced the Equitable Small Business Fund, a new effort focused on helping to close the racial wealth gap in the Columbus region by increasing access to capital and services for entrepreneurs of color and in particular, Black-owned and led businesses.
“We know that Black-owned businesses face disproportionate challenges in accessing capital and that historic patterns of systemic exclusion exist when it comes to small business support,” said Doug Kridler, President and CEO of The Columbus Foundation.
"These intentional investments will help foster a more inclusive and equitable small business ecosystem in our community by increasing this critical access to capital."
Doug Kridler, President and CEO of The Columbus Foundation
The Foundation’s commitment to racial equity centers on creating a community where every resident has the opportunity to flourish, unencumbered by disadvantages inherited simply by the color of their skin or the ZIP code in which they were born. Small businesses are a critical element of wealth creation. The median net worth of families with a small business owner is roughly five times greater than those without one. For Black families, this rate is ten to twelve times greater.
In 2020, the Foundation announced a plan that included $5 million to fund a Small Business Program-Related Investment initiative focused on deploying Program-Related Investments (PRI) to support small businesses. PRIs are a vehicle used by foundations to invest in solutions to strengthen the community, with the potential to recycle those dollars for new investments. The Foundation has invested in several PRIs in the past to help strengthen and sustain nonprofit organizations in our community.
Since April 2021, the Foundation has partnered with Next Street to develop and implement its small business strategy. Next Street is a national, mission-driven firm that equips clients with a curated suite of solutions to advance small businesses and deliver a more inclusive U.S. economy. It partners with corporations, investors, governments, financial institutions, and small business providers to deliver solutions that advance small businesses within their networks. Next Street previously worked with the City of Columbus to help develop the Columbus Small Business Agenda in partnership with 30+ regional stakeholders. The Foundation’s work builds upon these previous efforts.
The Foundation is seeking to make, on average, 10 investments of $500,000 each to entities that catalyze capital and/or build capacity in the small business ecosystem for small businesses owned by people of color, such as:
- Direct investments into nonprofit organizations that support business owners of color
- Direct investments in for-profit small businesses that align with the Equitable Small Business Fund vision and strategy
- Credit enhancements and guaranties to spur additional lending
- Black-led investment funds focused on entrepreneurs of color
- Alternative funders focused on inclusive credit options
Nationally, small businesses are responsible for two-thirds of net new private-sector jobs in the economy. In Columbus, small businesses dominate the local economy, representing 98 percent of all businesses in Franklin County. However, although people of color represent one-third of the population in Franklin County, businesses owned by people of color account for only 17 percent of total small businesses locally; Black-owned businesses account for just 4 percent.
The Foundation has assembled a committee, consisting of small business community champions, to oversee the evaluation and decision-making for investments.
The Equitable Small Business Fund Committee:
- Sandra Moody Gresham, Dehan Enterprises LLC
- Anthony Joseph, White Castle System, Inc.
- Timmy McCarthy, The Business of Good Foundation
- Doug McCollough, City of Dublin and Color Coded Labs
- Elizabeth Blount McCormick, Uniglobe Travel Designers
“These well-respected and community-engaged individuals bring a diverse set of experiences in small business ownership, investment knowledge, and small business support,” said Steve Moore, Chief of Staff for The Columbus Foundation, who explained that the Committee will bring an important community perspective into the management of the Equitable Small Business Fund portfolio.
The Foundation plans to make its first investments through the Equitable Small Business Fund this year. More details about how entities can apply for funding can be found here.
About The Columbus Foundation
The Columbus Foundation serves nearly 3,000 individuals, families, and businesses that have created unique funds and planned gifts to make a difference in the lives of others through the most effective philanthropy possible. The Columbus Foundation is Your Trusted Philanthropic Advisor® and is among the top ten largest community foundations in the United States.