The economic disparity between diverse groups of people in the country seems to be widening, and in Boston the trend is no different. The median wealth for White households in the United States is $247,500, while the figure for Black and Latino households is close to zero. In Boston, the disparity is just as stark—Black Bostonians have a net worth of $8.
And yes, you read that right.
The numbers are discouraging, but there are several local organizations that are doing their part to close the gap. The Business Equity Initiative (BEI), a program that started from the Foundation for Business Equity, was formed in April 2017 thanks to the initial seed funding provided by Eastern Bank. The goal of BEI is to combine business growth, supplier partnerships, and community development to address the ever-increasing income inequality within the state.
Within two years, the initiative has already made several strides toward achieving its mission, many of which will help Boston and the state of Massachusetts become a more equitable place to do business.
BEI Makes an Impact
BEI uses Eastern Bank's networks and philanthropic resources—along with strategic advisors, growth capital, market access, and operational support—to help minority-owned businesses grow. The initiative focuses on Black and Latino businesses that are already positioned for growth, but need more opportunity, resources, and access to help their companies excel. BEI focuses on this specific demographic because this is where wealth inequality is the most pronounced.
"We have an issue where Black and Latino businesses have not grown successfully, and it's painful to see that perpetuating itself over and over again, so where do we really start shifting that so it's a more fair system?" says Glynn Lloyd, BEI's executive director. "We want to facilitate [this], so that we can get these businesses to the next level."
BEI provides several resources to help the entrepreneurs entering the program as cohort members. Each business is paired with a strategic advisor who has direct experience growing a small business and can offer advice and mentorship. The key to this partnership is the help that the advisors offer in developing a strategic growth plan.
The program also offers financial support to help businesses offset some of their operational costs. Participating businesses receive preferred access to the Business Equity Fund, a partnership with the Boston Foundation that provides capital which entrepreneurs can use to grow their business.
"If you don't have the investment to actually grow the company in a way that is really ready to compete, you don't have the results you want. It takes a system-wide approach to really move the needle. That's what this initiative tries to do," says Orlando Watkins, vice president of programs at the Boston Foundation.
BEI has also partnered with the Greater Boston Chamber of Commerce's Pacesetter Initiative to help minority businesses receive more procurement contracts from larger companies in the Boston area. Tufts Health Plan awarded Done Right Building Services, a BEI participating enterprise, with a $2.4 million contract for janitorial and building services.
"That's the phase where they expose you to companies, saying 'Hey, I believe in this company. They've been vetted. They have a plan and they're for real in business," says Herby Duverné, the CEO of the security firm Windwalker Group, one of the previous participating enterprises in BEI.
Building a Stronger Business Community
BEI has had three cohorts, or groups, of participating enterprises for a total of 30 participating enterprises that represent a cross-section of industries—architecture, construction, dentistry, childcare, graphic design, and resource management.
With its efforts, BEI is trying to build a stronger, more just business community in Massachusetts, envisioning a future where minority-owned businesses have balance sheets and supplier relationships are just as strong as any competitor in their industry. Once this happens, the state and city as a whole will benefit from more jobs, a more diverse workforce, and a stronger business community that reinvests in local communities and helps to remove the economic disparity for everyone who lives here.
"That's the part that really gives me a lot of hope—the sense that the door will be open," Duverné says. "I gave up on Massachusetts a couple of years ago. I said 'I'm not going to do business here. It's so hard. I don't know that many people.' And, all of the sudden, through BEI, I realized there's hope."
Learn more about the Business Equity Initiative and apply today!