The Economic Empowerment fund is a resource development strategy that focuses on underserved low- income communities of color. According to Census.gov, people of color represent about 20% of Madison; and while Madison enjoys recognition as one of the best places to live for its roughly 80% white population, it is also a city with some of the worst racial disparities between Black and White community members in the nation. These disparities contribute to a wide gap in Black and White entrepreneurship.
The 2013 Wisconsin Council on Children and Families Race to Equity report found the arrest rate of Black to White males was 11:1, and that African Americans were significantly overrepresented in the criminal justice system - making up 50% of the county jail population while only 6% of the general population. In addition, Black unemployment in Dane County reached a staggering 25% in 2011 (and 23% overall in Wisconsin, one of the highest rates in the entire United States) compared to only 5% for Whites. Currently, 75% of Black children in Dane county live in poverty compared to 5.5% of White children. Madison was also found to have the highest achievement gap in education between Black and White students in the nation. StatisticalAtlas.com shows that Madison people of color earn roughly half of that of whites.
Census.gov also shows that for every 20 businesses in Madison, only 3 are owned by people of color. It’s no surprise that a lack of business ownership can be correlated with income disparity. The low rate of minority owned firms is partially explained in a 2013 national report on small business lending authored by the U.S. Small Business Administration (SBA), titled "Access to Capital among Young Firms, Minority-owned Firms, Women-owned Firms, and High-tech Firms” that found that in regards to loan application outcomes, there is “strong evidence of credit constraints among Black- and Hispanic-owned businesses. Even after controlling for other factors, such as credit score, legal form, etc., the minority group made up of Black and Hispanic business owners was significantly less likely to have their loan applications approved, compared with their White counterparts.” The SBA also found that "Blacks and Hispanics start their firms with about half the capital that Whites use," and "Hispanics and African Americans were more likely to pay higher interest rates on the loans they obtained."
The marginalization of the minority business community and the resulting lack of access to capital and business counseling is a detriment to economic growth and efforts to alleviate poverty. One of the major catalysts to these conditions is that people of color have historically lacked dedicated support in these areas. Opportunity Inc. brings Empowerment Empowerment WI to fill the gap by first understanding the unique barriers to entrepreneurs of color, and then utilizing strong community partnerships – taking a needs-based approach to resource development – connecting entrepreneurs of color to mentorship and funding.
We pulled from the Opportunity Network to build a collaboration of service providers and funders in economic development that can get behind what it means to empower people of color. Find out how you can participate at EconomicEmpowermentWI.org