Latino Economic Development Center
Report date
October 2021
What has been most instrumental to your progress?
Our plan was to fund BIPOC businesses exclusively through an equity lens. LEDC along with the Rebuild and Heal business collective recognized there was a need for organizations who have deep relationships within immigrant business communities to lead the way in supporting the recovery efforts after the civil unrest following George Floyd’s murder. In addition to a community lens to the effort, these organizations serve as CDFIs and bring decades of experience related to supporting BIPOC businesses and providing access to resources and technical support. Within days after the civil unrest, the Rebuild and Heal collective assembled an advisory committee of community members to help administer and distribute the direct financial assistance funds. The BIPOC businesses were already weakened by the Covid-19 pandemic, so we encouraged everyone to give generously. We witnessed as our communities received the least in trickle-down resources during the pandemic, and understood we could not let it repeat!
Key lessons learned
The main lessons during the last year were what we call the “gap” and “bottleneck effect.” The “gap” is the deficit in funding LEDC and other BIPOC nonprofits have against actual costs of operating the organizations. Technical Assistance contracts often fund organizations at less than our breakeven, but we commit to doing this important work because there is a deep commitment with the BIPOC community of Minnesota. The “bottleneck effect” is the direct result of the outpouring of money to help BIPOC communities. There are very few nonprofits in Minnesota positioned to administer these programs, distribute loans and grants, and to provide technical assistance, especially in emergency times. There is an urgency in completing this social justice work using financial assistance and a short time frame due to the very immediate needs of our community. Also, there is an expectation that small nonprofits, such as LEDC and its partners, have a much larger capacity than we do. Since BIPOC organizations have traditionally been underfunded, we don’t have systems and capacities in place to rapidly expand our services and meet the urgent time frame.
The support of the Bush Foundation helped deploy the financial help the Twin Cities BIPOC community needed as well as expanding our capacity to administer programs and alleviate the bottleneck by hiring additional staff, training our leadership, and investing in operational support. We believe that we do better when we make connections across communities to fight for our common vision of a thriving, multicultural, equitable region and state.
Reflections on inclusive, collaborative or resourceful problem-solving
Resourcefulness has been the most important attribute for making progress in our work. Resourcefulness in the past year has allowed us to create this collaborative in the first place. LEDC and our partner organizations had limited resources and systems capacity prior to the pandemic. And even though the pandemic and unrest following George Floyd’s murder have brought in more resources specifically for BIPOC small business-focused nonprofits, it has not yielded the capacity improvements we have all collectively sought. However, our organizations continue to be resourceful in helping solve problems and address the pervasive challenges impacting the BIPOC small business community. Much like the entrepreneurs and small business owners we serve, resourcefulness enabled us to collaborate and seek solutions to racial injustice in the Twin Cities.
Other key elements of Community Innovation
Healing from the traumas of the past year has been a key focus of our community process. The BIPOC business community has suffered disproportionately from the pandemic and the civil unrest that saw the burning and looting of businesses on Lake Street. Coming together to acknowledge the pain of these times, and to support one another through active listening and has given us the capacity to innovate in the ways we support Latino and BIPOC business owners. The Rebuild and Heal coalition proved that BIPOC nonprofit organizations can support the healing of the community by providing direct financial assistance to the business owners of Lake Street.
Understanding the problem
Many of the small businesses we support are located in the Twin Cities Metro Area Opportunity Zones in Hennepin and Ramsey Counties. These areas typically have higher proportions of BIPOC residents and businesses, including immigrant and Latino-owned small businesses. Additionally, in cities across greater Minnesota, immigrants and Latino businesses are often located in opportunity zones. At LEDC, our work in supporting entrepreneurs and small businesses in Opportunity Zones increases the investment in these zones and helps to stabilize traditionally underfunded areas. We believe that networking in our community and supporting and promoting small businesses will continue to provide long term economic prosperity for families, workers, and business owners.
If you could do it all over again...
This past year and a half have brought tremendous hardship to our community as they faced economic challenges that were beyond their control. It was heartbreaking to see the financial impact on families that had invested everything in their businesses. And many in the Latinx community as well as other marginalized BIPOC communities have been left behind in critical emergency support programs. As a trusted partner to the Latinx community for nearly two decades, we were able to help reduce those disparities by providing direct financial assistance funding, like from the Bush Foundation. Knowing what we know now, I would have advised ourselves to build coalitions and continue to invest time and resources to include Latinx and immigrant communities and businesses at the forefront of decisions taken by the Twin Cities metro community in the years to come. We shouldn’t support locally owned businesses because they’re businesses. They’re part of our culture — and backing them is saving those roots. BIPOC- or immigrant-owned businesses provide more than just a service or product to communities — they are pillars of our culture. If they go out of business, it creates a lapse in our culture.