When Rick Harris, owner of Ideal Commercial Interiors (ICI), moved to the Twin Cities seven years ago, he struggled to get the private sector contracts that had been his bread-and-butter during his three decades of business in California. 

"Coming here was totally different. I kept trying to get my foot in the door and instead would have it shut in my face," Harris said. ICI is certified by the North Central Minority Supplier Development Council and the Central Certification Program as a small, minority-owned business, but Harris noted that the greatest obstacle he faced was not discrimination, but inertia. 

"Businesses were not open to building relationships with new vendors. They preferred to maintain the same decades-long ties with people they knew and were familiar with — but that impedes access to the market," he said. "It’s bad for the economy when you have these small businesses that can’t grow because they’re consistently locked out of the market." 

For a city that struggles with staunch racial inequities in employment and poverty, these barriers to entry pose persistent challenges to the local economy. 

"The state says it wants to create more jobs for people of color, but to do that, you have to understand that minority-owned companies hire more employees of color, and so you have to focus on helping these companies grow," Harris said. 

That is precisely what the City of St. Paul is working to do. With the help of the city’s comprehensive efforts to foster racial equity in its municipal contracting, Harris has been able to fill the void of private sector work with city, county, and state contracts — which now make up 90 percent of his business.

According to David Gorski, a human rights specialist for the City of St. Paul, "The broader goal is to make the local economy more inclusive, to create a launching pad for small businesses," especially those owned by people of color and women.

Supporting entrepreneurs of color boosts local economies

St. Paul is a rapidly diversifying city; nearly half the city’s residents are people of color, and communities of color — especially Black communities — are leading population growth. But these communities continue to face persistent racial inequities in opportunity. Unemployment for people of color is 12.6 percent in the city, compared to 5.3 percent for Whites. For African Americans, unemployment skyrocketed from 9.6 percent in 2000 to 18.8 percent in 2014. Almost two in three people of color in the city are economically insecure — with family incomes below 200 percent of the federal poverty level — and one in five are working poor, struggling to make ends meet despite working full-time. 

In an attempt to combat these longstanding disparities, St. Paul launched its Racial Equity Initiative in 2014. This initiative includes numerous policy and practice reforms to make racial equity an explicit goal for the city — not only to foster inclusion and community justice, but as a necessary precondition for a prosperous, thriving local economy.

Connecting businesses owned by entrepreneurs of color to city contracts is a crucial lever in this work, because these firms represent key areas of growth in the local economy. Businesses owned by people of color in Minnesota are growing significantly faster than average, with 118 percent growth from 2002 to 2012, compared to 10.3 percent growth for all firms in the state. The number of small businesses owned by African Americans in the state grew by about 60 percent between 2007 and 2012, while small businesses owned by Whites declined 3.4 percent. Yet, many of these businesses are small and undercapitalized, with few employees.

Though the state government of Minnesota has recently received criticism for its inequitable procurement practices, St. Paul has been meeting and exceeding many of its racial equity goals. For example, the city aims to award at least 25 percent of public contracts to small businesses. Within that small business goal, the city sets further targets to reach 5 percent of firms owned by people of color, and 10 percent of women-owned firms. In 2016, more than 30 percent of the city’s total business went to small businesses, with 5 percent awarded to businesses owned by entrepreneurs of color and more than 12 percent awarded to businesses owned by women. 

St. Paul’s progress in upping contracting equity can be traced to concerted efforts to reform and innovate practices within the city’s Purchasing and Contract Compliance Divisions. This work began with the assistance of Bloomberg Philanthropies What Works Cities initiative, through which the Government Performance Lab at the Harvard Kennedy School helped the city better understand why it wasn’t adequately reaching small businesses and businesses of color. What they found mirrored the hurdles Harris noted in the private sector. 

"Vendors felt that we were closed off," said Jessica Brokaw, deputy director of procurement, contract compliance & business development for the city. "They felt we had preferred vendors and that was that." 

This led to a series of structural changes to the procurement process. The city rolled out a new online bidding platform that made the process more transparent and accessible, and ensured that any vendor could download bids free of charge. They also revised the language of bids — from PhD reading level to eighth grade reading level— so that most any vendor could understand them without an attorney.

Wherever possible, officials also streamlined certification processes. For example, a vendor can become registered as a minority-owned business enterprise (MBE), a woman-owned business enterprise (WBE), or a small business enterprise (SBE) through one-day Central Certification Program (CERT) community workshops that are hosted monthly. These certifications are recognized by Hennepin County, Ramsey County, Minneapolis, and St. Paul, making it easier for businesses to pursue public procurement and contracting work regionally. The increased community engagement is reflected in attendance at the annual procurement fair, hosted by the city’s Department of Human Rights and Equal Economic Opportunity. In 2017, 350 vendors showed up within the first three hours alone.

Perhaps most impressively, the city has made significant changes to open up public contracts to new businesses. Starting in 2014, the city has changed five-year agreements to yearly agreements whenever possible, and broken down larger projects into small subcontracts to increase opportunities for new and small businesses to bid. 

"We decided to not renew hundreds of master contracts — some of which we had held for 20 years," Brokaw said. "We got lots of pushback, because there were vendors who didn’t really have to compete for years upon years, and there were city departments who didn’t want to have to orient new vendors to how we operate." 

When the city opened up contracts to a more competitive market, however, "the city and the local economy benefited," Brokaw noted. "The bids are lower, so the city is saving several million dollars, and our relationship to the community is so much stronger because vendors can see that we are open to them." 

Bridging the public-private contract divide through mentorship

In addition to the structural and procedural changes noted above, one of the key facets of St. Paul’s efforts to promote small business growth among minority entrepreneurs is the Construction Partnering Program (CPP). 

Founded by the city and administered through the Metropolitan Economic Development Association (MEDA) and the Association of Women Contractors, CPP supports emerging small businesses owned by women and people of color by fostering long-term partnerships between these firms and larger industry experts in the region.

In general, the odds can be stacked against small businesses trying to expand: They don’t always have access to the same product lines or discounts because they don’t buy in large enough quantities. They often lack access to the kind of financing necessary to purchase the kind of bonds that are required to insure projects or to cover their costs for the months it can take for contracts to pay out. 

"It creates a catch-22 because the financials limit the size of contracts a business can take," said Salah Tarraf, participant in the CERT and CPP programs and owner of Tarraf Construction, a general contractor operating in the Twin Cities for 17 years. "We have so many fantastic contractors of color who want to grow, but are held back because they can’t take larger projects." 

The city has stepped in to remove some of the financial barriers: city projects up to $100,000 no longer require bonds, so they are now more accessible to small contractors. Through CPP mentorship, however, the city also hopes to start bridging the gap between public and private work. 

Tarraf Construction has been partnered with McGough, a large general contractor headquartered in St. Paul, for the past 13 years. This relationship has allowed Tarraf to benefit from the insight and experience of the larger firm, and McGough has helped them break into the private market by inviting them to bid on subcontracts for their work and including them in negotiations as an "equal partner." 

Though it remains an "uphill battle" to get the private sector to work with small companies, Tarraf said he gives "a lot of credit to St. Paul. The city has been really supportive of the minority community, and I think it’s been a success." 

Cross-posted from the Healthy Food Access Portal

Celebrating stories of community action, impact, and hope through images captured by Healthy Food Financing Initiative grantees working to foster access to healthy food, good jobs, and opportunities to thrive.

Six years ago, PolicyLink, Reinvestment Fund, and The Food Trust worked in partnership with community and public stakeholders to craft a federal response to address the inequitable access to healthy food in rural and urban communities. The effort resulted in the launch of the federal Healthy Food Financing Initiative (HFFI) program in 2011 by the Departments of Treasury (through the CDFI Fund), Agriculture, and Health and Human Services.

In just five years, the HFFI program distributed over 100 awards in over 30 states to support projects that are improving healthy food access in communities across the country. Throughout the year, the Healthy Food Access Portal has shared success stories of healthy food access projects. To celebrate this important milestone in the movement to improve food access, grantees were invited to share their own stories of their HFFI projects in action, through both photography and video.

My HFFI Story features the inspiring work of 15 HFFI grantees who are responding with action, engagement, collaboration, and innovation to ensure all communities have access to healthy, affordable, and culturally appropriate food. Read, view, and watch their stories here: https://equityis.exposure.co/my-hffi-story

Read the full blog post > > >

Originally posted on Spotlight on Poverty and Opportunity

In Pittsburgh, a wave of baby boomer retirements is expected to leave the region with 80,000 more job openings than workers to fill them over the next decade. At the same time, 32,000 of the region’s workers are long-term unemployed, and unemployment is highest among black, mixed race, and Latino workers.

How to connect unemployed and under-employed workers of color to jobs in growing industries and industries with retiring baby boomers is a key question for Pittsburgh, but the region is far from alone. The Georgetown Center for Education and the Workforce estimates that that by 2020 there will be 5 million more job openings in America than there are workers with the requisite skills to fill them. Yet, workers of color, particularly black workers, continue to face high levels of unemployment and inadequate access to relevant education and skills training.

Addressing continued unemployment for black workers and other workers of color is critical to families, employers, and the U.S. economy as a whole. The question is: how do we most effectively do that?

Read More>>>

Conjuring a mental image of Detroit is easy if you've been paying attention to some of the comeback stories that have been streaming out of the city: it is the Rust Belt's chrome mecca coming back from the brink, with daring restauranteurs and visionary start-ups injecting new life into ghostly factories and disinvested working-class neighborhoods. But these predominant narratives only tell part of the story: economic growth is concentrated in pockets close to the central core, and has benefited outsiders more than locals. In 2007, 36 percent of jobs in the central business district were held by Detroiters, but by 2013, that number dropped to 23.7 percent.

"The condition that Detroit is in has created a can-do, collaborative, maker culture," said Kevin Ramon, business coach at Central Detroit Christian Community Development Corporation. "But there are a lot of people in Detroit's underserved communities that don't have the financial capacity or skill sets to get their businesses off the ground as fast as others outside of those communities." But a network of organizations in the city is working to change that.

Ramon provides marketing and general business coaching support for Central Detroit residents through the business development work of Central Detroit Christian, which is part of a cottage industry including foundations, nonprofits, incubators, and co-working spaces that provide Detroit's low-income residents and people of color with resources and opportunities to launch successful small businesses.

Detroit is proving what can happen when a robust business ecosystem — one that is committed to inclusion — sprouts up to combat the economic inequality that too often accompanies a city's comeback. Below are three examples of companies owned by Detroiters that are tapping into the new business resources available to grow and ensure that Detroit's renaissance is built on a foundation of success for local residents of color.

From Returning Citizen to In-Demand Business Owner

When Craig Grissom returned to Central Detroit after 14 years of incarceration, he turned to landscaping work to make money.  "I couldn't get hired anywhere, so I had to create my job," he said.

In 2009, Grissom started to build his own small clientele. Two years later, Lisa Johanon, who oversees Central Detroit Christian's portfolio of 10 businesses, offered Grissom the job of managing one of them, Higher Ground Landscaping. "I had been making a couple of dollars on my own, but it wasn't steady," he said. "With that opportunity, I had a steady income."

In return, Grissom has tried to hire other returning citizens from the neighborhood. "Somebody gave me a chance," he added. "Lisa helped me out and if I could help someone else out, sure enough, I would. I hired someone this past summer who was just a new release and I gave him the opportunity."

Through Central Detroit Christian, Grissom completed an entrepreneur training class at ProsperUS in 2014. He was able to purchase Higher Ground Landscaping in 2015 and obtained working capital through loans from ProsperUS and Southwest Solutions (both of which have since been paid off). Grissom's contracts now include Henry Ford Health Center and the Woodward Avenue Streetcar project.

Both Central Detroit Christian and ProsperUS receive funding from the New Economy Initiative (NEI), a collaboration of 13 national and local foundations founded in 2007 that has grown into one of the largest philanthropy-led regional economic development initiatives in the United States. A recent report from NEI outlines the impact of its grantmaking, and the results are impressive: through $96.2 million in grants, NEI has helped to launch 1,700 new companies, creating more than 17,000 jobs.

The success of Grissom and other entrepreneurs like him speaks to the power of Detroit organizations working together and collaborating to build a network of entrepreneurs of color — especially those with a passion for training and employing locally. According to Matthew Lewis of NEI, the initiative wants to focus its grantmaking efforts to ramp up local hiring to ensure that Detroit residents reap the benefits of their city's comeback.  The results so far are promising: the 2016 NEIdeas winners were 75 percent people of color and 60 percent women-owned businesses, and NEI has received applications from every Detroit zip code.

From Selling out of a Trunk to the Shelves of Whole Foods

Nailah Ellis-Brown, another local entrepreneur, feels frustrated about the way that Detroit has been portrayed in the media. "A lot of people think you can just buy a building in Detroit and grow a $1 million business," said Ellis-Brown. "Detroit has been portrayed as this wide-open market, but people are just coming in and not providing jobs or training. They are bringing in the workers they want to use. It doesn't make sense to come in and fix downtown, midtown, and a couple of blocks along Woodward. That's not the entire city."

Ellis-Brown began selling her grandfather's hibiscus iced tea recipe out of the trunk of her car in 2008. Today, Ellis Infinity Beverage Company drinks are being sold in over 300 retailers throughout the Midwest, including at Whole Foods, and she was named one of Forbes magazine's "30 Under 30" in the manufacturing industry. Along the way, Ellis-Brown found resources throughout the region, including from Michigan State University Product Center, "which has been amazing as far as labeling and the random stuff like barcodes and nutritional information," and Michigan Minority Supplier Development Council, which helped Ellis-Brown with contracting. But she is proud of how much she's been able to do on her own.

"Being a Detroit native, I've never been the type to wait on handouts," she said. "If there's something you want, you've got to go get it yourself. That's how I was raised and how things tend to be for people within the Black community." She's committed to hiring local residents, and nine of her 15 staff members on the production line have special needs. She works through a program called Services to Enhance Potential and also hires walk-ins, online applicants, and over social media. "No one really takes the time to work with individuals with special needs. With the passions they have and the joy I see when they come to work, it makes all of the difference in the world to me," said Ellis-Brown. "One of my passions and aspirations is for my company to provide job support and job opportunities for Detroit natives."

A Master Plumber with a Vision

One of NEI's grantmaking programs, NEIdeas, challenges entrepreneurs to come up with ideas to help grow their businesses. Businesses that gross under $750,000 annually compete for one of 30 $10,000 awards; businesses that gross between $750,000 and $5 million compete for one of two $100,000 awards.

Benkari Mechanical, a plumbing enterprise, won a $10,000 award in 2015. Founded by Adrienne Bennett, said to be America's first Black female licensed master plumber and Michigan's first and only female licensed master plumber and plumbing contractor, the company was looking for a way to grow to its next level.

"We are small, we are minority, and we are just trying to fit in," said Bennett. "Until now we have been self-funded. Now we are at the point that for us to grow, we have to pursue larger projects. Banks literally want your life for the money they want to loan you." With the NEIdeas grant, the company purchased software and training to help automate its contract bidding process. The first time Benkari used the software, it won its biggest contract to date — for the new Detroit Red Wings arena currently under construction.

"It would have taken a much longer time to estimate without the software," said A.K. Bennett, Adrienne's son and project manager for the company. "We see this project as being a stepping stone to larger projects'"

One of Benkari's biggest growth challenges is finding qualified local union workers. The union provides a five-year apprenticeship program, but with the growth of the central business district and an executive order that projects are required to have 51 percent of local trade labor to qualify for city financing, Benkari Mechanical's labor pool is often dry. "After the 2008 crash, there was no push to open the apprenticeships and a big loss of people to retirement," said Bennett, the business owner. "Now since the boom has come back and it has come back so fast, there aren't that many people with talent or experience to do the work. Now there are people who have never had a hammer in their hands on a construction site."

Even so, the business is poised to meet Bennett's vision for growth. "We have set goals as far as where we would like to be financially — owning our own office space with a pre-fabrication facility and developing a fleet of company vehicles. As far as the things we see as happening in the city, we think this is all attainable."