Life in the financial sector sometimes feels like swimming upstream in a river of alphabet soup — there are so many acronyms to remember. There are the titles we tack onto our names—MBA, AIF, CPWA, CFP, CFA, AAMS—and, in the world of impact investing, where I’ve spent my career, there’s SRI and ESG investing, where we like to talk about ROIs, KPIs, and CDFIs.
However, where does race fit into this nomenclature? How about gender?
“Social” is too broad, and “governance” has failed Black, Indigenous, and communities of color for centuries. If you step back and take a look at what’s happening in the world — the lopsided effects that the COVID-19 pandemic is having on minority communities, police violence, the Black Lives Movement,— it’s clear that we need to do more than create Diversity, Equity, and Inclusion (DEI) statements that hold corporations accountable.
Now is the time for words and action, especially in the financial sector. We need to sit down with internal and community key stakeholders to have those uncomfortable conversations that lead to action-oriented DEI statements to educate the workforce and investors alike. Org charts need to reflect a company’s DEI statement, especially with regard to men and women of color, from the C-suite down to our summer interns.
These issues need to be spotlighted on the main stage at conferences featuring the industry’s biggest players pledging to do more, and to do better.
Yes, we need to talk about all of these things; however, in the meantime, we need to be pursuing tangible, measurable actions. Financial institutions including banks, credit unions, and foundations need to act to employ lending standards that build a more equitable society and economy that works for everyone.
Specifically, investing in Black- and minority-owned businesses needs to be the priority. That’s the action we need, more Racial Equity Investing: REI (and no, I didn’t ask Recreational Equipment, Inc. if I could borrow its acronym).
Products and strategies like REI that can counter realities like the one highlighted by another acronym: PPP. Although the Small Business Administration-backed $669-billion Paycheck Protection Program (PPP) was established to provide relief to small businesses trying to weather the economic upheavals caused by the COVID-19, the Center for Responsible Lending says that “upwards of 90 percent of businesses owned by people of color have been, or likely will be, shut out of [it.]”
In a world where we prioritize REI, things stand to be different. However, rather than spelling out how REI can foster equal opportunity, job creation, and community development, I’d rather show you.
Here are three real-life examples of Black-owned entrepreneurs who benefited from REI investors, who not only got every single dollar of their money back, but who also collected between 2.75 and 4 percent APY on their investments.
Like many entrepreneurs, Shavon Marley, of Raleigh, North Carolina, dreamed about her future company long before it came to fruition. Initially, she didn’t know what it would be, but whatever it was, she wanted to start it with her husband. The high school sweethearts wanted a business that they could build and grow together; something that would provide them with the flexibility to travel.
That’s as far as Shavon got before she was diagnosed with breast cancer.
She went from working a busy, full-time sales job to sitting in a hyperbaric oxygen chamber for seven hours stretches, three days a week. With no electronics to distract her, she seized the idle time as an opportunity to both think about the business she wanted to start and connect with other business owners — after all, they were sitting next to her, themselves cancer patients serendipitously grouped together in the same cancer treatment facility.
When Shavon went into her hyperbaric oxygen chamber, she carried a pen and notebook with her. She gleaned knowledge from people who operated businesses in the trucking industry and she even got advice about how to thrive in a male-dominated industry from a woman who’d started her own welding company. Shavon was ready; however, outside of the hospital, things were different. She didn’t know whom to turn to for loan advice, and she didn’t have all of the resources she needed.
That’s when she connected with the Carolina Small Business Development Fund. With the help of the CDFI, she refined her business plan, and in 2018, she got the loan necessary to start Marley Transport & Trucking. That loan not only got her business up and running, it unlocked doors for Shavon and her family. Shavon’s husband came on board as Marley’s head of operations and dispatch, and Shavon’s father and uncle were hired as the company’s first two drivers. A friend of a friend was later hired as Marley’s third driver.
We talk about loans being opportunities, but for Shavon, hers was a dream come true. As Marley Transport & Trucking continues to grow, it’s creating more and more jobs in Shavon’s community, and those employment opportunities are fostering wealth accumulation where it didn't exist before.
Jamar Kirk’s Story
When Jamar Kirk was 15, he moved with his mother from a drug-infested neighborhood in Gary, Indiana, where he’d been born and raised, to Duluth, Minnesota. As the years went by, he started losing friends to violence and to drugs, and he struggled in school. Jamar, however, found a way to persevere. Through organized sports, fortuitous friendships, and strong mentorship, he avoided ending up like a lot of his friends growing up, who were either dead or in jail.
Jamar ended up turning his life experience into an entrepreneurial endeavor called Cycles Broken LLC, which provides consulting, coaching, mentoring, and resources to the most marginalized and at-risk demographic in his community: the same one he’d been a part of as a teenager.
When he sat down to start his company, Jamar knew that he wanted to help clients better manage their finances, establish credit, buy homes, get visitation rights, secure child support, and advance their education, and he knew that he wanted to collaborate with local nonprofits and small businesses. What Jamar lacked, however, was business know-how.
That’s where the Entrepreneur Fund helped. The Duluth-based CDFI gave Jamar the capital to start his business and buy a laptop for presentations and seminars he held. Jamar was even able to connect with an accountant, a marketing guru, and a website designer to turn his business into a more tech-savvy, financially streamlined enterprise.
Ever since, business has been booming, and Jamar has been able to grow his team and get more “boots on the ground” facilitators and staff alongside him, working to expand Cycles Broken operations and community outreach. Together, they’re working to have an effect on the minority high school graduation rate in the community. As it stands, there’s a 50 percent attrition rate for minority students.
When Jamar talks about his business and his life, he talks about waves of change: if you can convince someone to sit down for just one conversation, what can that lead to, and what impact can that have? At Cycles Broken, he’s hoping it leads to a major movement that empowers youth entrepreneurship and the proliferation of minority-owned businesses in Duluth and beyond.
Jamine Moton’s Story
Jamine Moton is a lot of things. She’s a former Division 1 athlete, a national champion, a record holder, an Olympic alternate, and a future hall of famer. She’s also the Black woman behind Skylar Security, an Atlanta, Georgia-based company closing in on $1 million in revenue.
Jamine has been protecting people for as long as she can remember. That’s what ultimately led her to take a job with the Clayton County Police Department. It was a step toward her then dream job with the FBI. However, Jamine is a natural leader, and she’s always had an entrepreneurial spirit. When her manager told her that she was “too supervisory,” she decided to rescind her FBI application and start her own private security company.
The move wasn’t without its risks. Although Jamine had a masters degree in human resources training and development and business management, she had never started her own business. She kept her full-time job with the police department for another three years while she got Skylar Security off the ground, learning something different from each client and with each event.
When the time came to go all in on her business and to quit her full-time job, Jamine connected with Access to Capital for Entrepreneurs (ACE), an Atlanta-based CDFI. She received a $35,000 loan that made all the difference for her being able to scale her company. However, arguably more important, especially to a former top-tier athlete, was the business coach Jamine received through ACE. Together, they re-evaluated Skylar’s price points, and the company went from working with 37 security providers to 200 security providers.
To date, Skylar Security’s biggest achievement was being contracted to provide security at Mercedes-Benz Stadium for Super Bowl LIII, in Atlanta. According to Jamine, the company wouldn’t have been able to financially survive the lead up to the event if it hadn’t been for the loan she’d received from ACE. Today, with a business coach in her corner and a growing team around her, Jamine dreams about expanding operations to other states: a dream that very much feels within her reach.
The Future Is Now
There are many similarities and shared themes that span between Shavon, Jamar, and Jamine’s stories, and each is demonstrative of the potential of REI. When we invest in Black- and minority-owned businesses, we’re not just giving these entrepreneurs the opportunity they need to succeed. Instead, to borrow from Jamar’s story, we’re initiating waves of change, where a loan has the power to create jobs, strengthen communities, and narrow the racial wealth gap in the United States.
To conclude, I’ll always be one of CDFIs industry’s biggest cheerleaders, and I’ll continue to dedicate my career to SRI and ESG investing; however, for too long, we in the financial sector have lumped race and gender under the catch-all umbrella of “social.” Given where we’ve come from, and looking at where we’re at now, if we’re ever going to successfully decouple discrimination from financial opportunity in this country, then we’re going to need to learn a couple more acronyms.
Let’s make REI one of them.
Article by Danielle M. Burns, MBA, AIF, Vice President, Head of Business Development for CNote. Prior to joining CNote, Danielle worked for First Affirmative Financial Network in a variety of Business Development roles from 2004 to 2019 most recently serving as Vice President of Sales and Marketing where she worked with a highly collaborative team that was responsible for the growth and profitability of the firm’s distribution channels. Danielle began her financial services career in 1994 with Wachovia Corporation, performing a variety of management duties over her nine-year tenure. Danielle serves on the board of Green America as well as the SRI Conference & Community Advisory Board. Additionally, Danielle is a certified trainer for Walking on the Glass Floor, which promotes diversity and inclusion for women in leadership.