Partnership to inject $130 million into Deep South small businesses hurt by pandemic
Hope Enterprise Corp., with a $130 million commitment from Goldman Sachs, has partnered with seven cities and nine historically Black colleges and universities (HBCUs) across the South to launch the Deep South Economic Mobility Collaborative (DSEMC).
Birmingham, Montgomery and their respective HBCUs, Miles College and Alabama State University, are taking part in the collaborative, announced Tuesday, which was formed to stabilize and strengthen businesses and communities devastated by the economic crisis. DSEMC invests in the power of small businesses and entrepreneurs in the Deep South, particularly those from underserved and under-resourced communities.
DSEMC taps the expertise and capabilities of Hope Enterprise Corp., Goldman Sachs, institutions of higher learning and cities to provide access to financing, business education classes and business support services, leveraging the private, public and nonprofit sectors. This comprehensive effort focuses on stabilizing and strengthening small businesses and bolstering employment in a region characterized by entrenched poverty and racial disparities.
“For centuries, racism and economic inequality has thwarted human and economic potential in the Deep South, but our story doesn’t end there,” said Bill Bynum, CEO of Hope Enterprise Corp., Hope Credit Union and Hope Policy Institute. “Equipped with opportunity and the right tools, people of this region can accomplish anything. Fueled by their resilience and harnessing the collective resources of DSEMC, together we will knock down the barriers facing underserved businesses and communities in a way that has never been done before. The collaborative will help build a more inclusive economy that will yield benefits now and for future generations.”
Margaret Anadu, Goldman Sachs partner and head of the Urban Investment Group, said black business ownership is a proven way to advance economic mobility.
“Goldman Sachs has a long history of building up Black and women-owned businesses through 10,000 Small Businesses and by investing in community development financial institutions like Hope. The Deep South Economic Mobility Collaborative reflects our ongoing commitment to invest deeply in strategies to close the racial wealth gap,” she said.
While the DSEMC is open to all small businesses, the impact of the pandemic and economic crisis has disproportionately harmed communities of color. Recent research shows that between February and mid-April 2020, 41% of Black businesses had permanently closed, compared to 17% of white-owned businesses. Also, the value of Black businesses in the Deep South is lower than in any part of the country, underscoring the urgent need for solutions in a region with the highest percentage of Black residents.
“Partnering with the world’s preeminent investment bank will anchor Miles College as the incubator for Black-owned businesses and entrepreneurs in our region,” said Miles College President Bobbie Knight. “This alliance with Goldman Sachs and Hope Credit Union will create a groundbreaking impact and support the next generation of entrepreneurs.”
Alabama State President Quinton Ross said the university is excited to join in the launch of the collaborative.
“This partnership acknowledges the impactful work that is already being done in the Small Business Development Center (SBDC) at Alabama State University,” he said. “The ASU SBDC has helped to launch and support hundreds of small and minority-owned businesses, providing the resources to form a foundation for success even during difficult economic times. Our involvement in DSEMC allows ASU’s SBDC to expand its work and the university to advance its goal of continuing to be a transformative community partner.”
Other cities joining Birmingham and Montgomery in the collaborative are Little Rock, Arkansas; Baton Rouge and New Orleans in Louisiana; Jackson, Mississippi; and Memphis, Tennessee. Other participating HBCUs are Philander Smith College, Dillard University, Southern University and A&M College, Xavier University of Louisiana, Jackson State University, Tougaloo College and LeMoyne-Owen College.
Projections call for the DSEMC to serve 4,000-5,000 businesses and support 30,000 employees and their family members while improving conditions in Deep South communities to further Black economic mobility.
To learn more about the Deep South Economic Mobility Collaborative, visit www.hopecu.org/mobility.
(Courtesy of Alabama NewsCenter)