Case Study: Using the Atlanta Wealth Building Initiative to Give Black Businesses a Competitive Edge to Anchor Procurement

 Case Study: Using the Atlanta Wealth Building Initiative to Give Black Businesses a Competitive Edge to Anchor Procurement

The Just Economy Solutions Hub is home to this showcase of NCRC member work. VisitNCRC.org/solutions to learn more!

The goal of NCRC is to investigate the effects of technical assistance and small business education models that foster the expansion of firms run by individuals of color. Block, Inc. With assistance from the NCRC, small business education models were established in the areas of market access via procurement for black-owned enterprises, community capital resource management for Hispanic immigrants, & entrepreneurship development among women owners of color.

The results of this effort are available on the Just Economy Solutions Hub, which was created to exchange information, tools, and innovative techniques that may support and enhance the environment for entrepreneurship.

Anchor procurement tactics that provide contracts to companies owned by Black people

Situation of black-owned businesses and income production

African Americans now own about 2 million more companies than they did in 1992, when their percentage of all enterprises increased from 3.6% to nearly 10%. The bulk of African American-owned small companies are centered in the health care and social assistance sectors across all industries. Black entrepreneurship increased by about three times, yet the share of black revenues fell from 1% to 0.5%. Actually, according to Pew Research, the majority of black-owned companies pay very little and don't make a lot of money. Ensuring robust revenue creation among African American companies is a crucial step towards attaining prosperity and economic opportunity.

enabling Black-owned companies to better compete for contracts by providing services to organizations

Both governmental and private organizations may use the tactic of anchor buying to provide Black business owners more access to markets. Black-owned enterprises in the community may be given preference when it comes to supplier contracts from anchor institutions like hospitals or colleges. This will benefit black entrepreneurs by generating new employment and opportunities for the production of products and services. Additionally, it will improve economic opportunities in underprivileged areas. Despite these advantages, typical supplier diversity initiatives run by anchor institutions are unable to achieve their objectives of securing contracts from Black-owned companies.

Through a range of capacity development and collaboration possibilities, the Atlanta Wealth development Initiative (AWBI) is establishing a network of business-supporting organizations (BSOs) to facilitate the expansion of Black-owned enterprises. In order to collaborate with BSOs and share their knowledge, expertise, and connections in bidding, negotiating, and obtaining procurement opportunities, AWBI is assembling the greatest professionals and subject matter experts. This strategy promotes ecosystem cooperation and offers a deliberate investment to help Black firms achieve long-term success.

Small companies vying for contracts struggle to navigate the necessary certifications, don't have a strong back office, and don't have many connections with anchor institution procurement leaders. Small firms' access to core black-owned business networks and their ability to compete for bigger contracts are both hampered by these capacity issues. Furthermore, only a tiny portion of black-owned businesses in Atlanta's key buying possibilities are in industries that are often involved in supplier work, such as construction, catering, landscaping, etc.

The 1,000 Days Campaign of the 1,000 Black Businesses in Atlanta Wealth Building Initiative

In order to increase black wealth and decrease racial economic mobility, the Atlanta Wealth Building Initiative (AWBI) promotes community wealth-building techniques via movement development, money raising, and thought leadership. AWBI is committed to eliminating obstacles to everyone's shared economic success and creating an inclusive economy that supports vibrant communities in order to solve the systematic racial wealth and economic disparity in the area. Her role as a mediator is to assist and coordinate the nonprofit business advocacy ecosystem in order to develop daring ideas that push the industry toward greater collective impact, develop leaders, and encourage wider involvement. is focused.

Taking Up the Challenge:

The worth of a white-owned firm in Atlanta is 11.6 times more than that of a black business, according to statistics from the Census Bureau. More than 83,781 people are employed by the approximately 9,000 Black-owned companies that Georgia supports. In Atlanta alone, there were more than 25,457 African American-owned enterprises, according to the US Census for 2020. According to this statistics, Georgia has the second-highest number of Black-owned companies (after Maryland), and Atlanta has the second-highest number of Black-owned company workers out of all cities. Maintains top position.

Furthermore, AWBI's 2021 Capital Ecosystem Assessment indicates that all small enterprises in the Atlanta market face an annual capital shortage of $9–12 billion. The group has direct knowledge of the difficulties Black-owned companies face in obtaining any funding from regional capital sources. According to a recent Prosperity Now study, 96% of black-owned companies in Atlanta do not have any paid staff members. Furthermore, as per the present strategic plan of AWBI, the income generated by White-owned firms in Atlanta is ten times higher than that of Black-owned enterprises. This income gap is a consequence of the racial wealth inequality, which has its roots in past redlining tactics, rather than a reflection of disparities in entrepreneurial ability. Compared to 22% of white families in Atlanta, 70% of black households are "liquid asset tight". Because Blacks have less money and assets to depend on to manage and grow their entrepreneurial endeavors, Black-owned enterprises are thus more likely to encounter financial obstacles. Due to discriminatory lending policies and rigid underwriting requirements, Black entrepreneurs find it challenging to get the financing required to launch and grow their enterprises.

Program Synopsis:

The AWBI Black Business Campaign promotes data collection and research on small companies, as well as the expansion of firms via worker development programs, anchor procurement tactics, and anti-displacement measures that protect community assets. A prototype anchor institution plan with Emory University is one of the campaign's outcomes. While not all companies need these certificates, AWBI works together with multiple stakeholders to improve the number of black-owned businesses that become certified and to position them for market possibilities via a variety of training and mentoring programs. permits you to get in touch. Furthermore, AWBI collaborates closely with small enterprises to support them in bidding for contracts.

Encourage Programmatic Innovation:

Assist anchor institutions in fulfilling the demands of regional vendors

In order to more effectively find, interact with, and engage local suppliers for procurement opportunities, AWBI closely collaborates with anchor institutions. For many anchors, this means rethinking vendor contracting procedures and systems that have traditionally kept out a variety of players. Anchors may get technical support from AWBI in the form of proposal language training, bid draft consultation, revamping the anchors' small business outreach and engagement strategy, and more.

introducing novel approaches to non-traditional company kinds' contract access

Small company owners lacked the extensive back offices necessary to interact with purchase leads from regional anchors, as acknowledged by AWBI. The company is looking at a digital platform that will act as a link between the business and the anchor. Small firms may discover what possibilities are available and apply straight via the site, and contract opportunities can be submitted and advertised. Diversifying the group of companies who qualify for anchor work for non-traditional business categories (including waste management, event production, and professional services) is another aspect of this.

Increasing Technical Assistance to Small Businesses

The biggest problem facing small enterprises is capital, particularly for those with AWBIs looking to contract with anchors. AWBI brings together investors of color as part of its technical assistance package to provide guidance on investment choices that support these companies in increasing their competitiveness. Vendors receiving technical support from AWBI are trained in MWBE certification, as several large-scale contractors need it.

Getting the wealth-building impact

Data and feedback from the community are used by AWBI's Community of Practice (COP) to influence the organization's mission objectives. To make sure that every component of programming is furthering the organization's goal of closing the racial wealth gap, AWBI evaluates each program against a set of organizational headline indicators. These indicators include, but are not limited to, trends toward livable salaries, employment growth, and overall revenue growth of Black-owned firms.

While AWBI's anchor procurement project is wrapping up its pilot phase, the following metrics are anticipated to be used to track its progress:

An increase in the amount of contract money allotted to black-owned companies

Form official alliances with ten to fifteen anchor institutions.

An increase in MBE registrations

Alternative business models are being more widely used as useful instruments for retention and displacement prevention.