This article originally appeared in the Puget Sound Business Journal and is part of an Uncommon Thinkers Welcome sponsored thought leadership program.
By Laura Newpoff – Contributor
Two major events of the past several years have prompted the financial industry to reinforce efforts to support small businesses in underserved communities.
The first was the pandemic, which, reports found, caused minority-led firms to experience steeper declines in sales than their white-led counterparts at the same time their leadership was having a harder time accessing capital.
Meanwhile, the nationwide protests that occurred after the death of George Floyd in May 2020 caused damage to many inner-city businesses owned by Black, Indigenous and people of color (BIPOC) and sparked widespread conversations about systemic racism.
Banks and credit unions sprang into action to support business owners operating in diverse communities. This has been especially true in the Greater Seattle region, which has codified into law its status as a “welcoming city” for immigrants and refugees.
In a region where “uncommon thinkers are welcome,” three financial executives recently shared the innovative work and creative mechanisms their organizations have put in place to support diverse businesses. The executives include:
- Jackie Martinez-Vasquez, vice president of diversity, equity and inclusion, BECU.
- Jim Morehead, president, Bank of America, Seattle.
- Mary Knell, CEO, Pacific Northwest commercial banking, Wells Fargo.
(from left) Jackie Martinez-Vasquez, vice president of diversity, equity and inclusion, BECU; Jim Morehead, president, Bank of America, Seattle; and Mary Knell, CEO, Pacific Northwest commercial banking, Wells Fargo.
Equity in Action Initiative
BECU is the largest not-for-profit credit union in Washington and one of the top four financial cooperatives in the country. Supporting BIPOC-owned businesses is a key strategic goal for the organization, and one focus of the credit union’s equity commitments focused on employees, members and the community.
BECU hosts the “Equity in Action: It’s on Us” initiative in partnership with the small business support group the Intentionalist as part of its commitment to equity and inclusion. According to BECU: “By investing in our communities, we’re addressing racial inequities that stand in the way of equal access to financial opportunities.” Throughout the year, BECU opens tabs to encourage consumers to visit and patronize local small businesses whose owners represent diverse communities.
The credit union also dedicates $1 million each year to local nonprofits through its Black Community Development Project. The grant program is led by its Social Impact team with support from the Black Alliance Cooperative employee resource group to help improve the financial health and well-being of the Black community.
BECU also partners with Business Impact NW to support scholarships to strategic business workshops that are available to veteran-owned, women-owned and BIPOC-owned business members.
“We believe these small businesses are the heartbeat of our community,” Martinez-Vasquez said. “By providing equitable pathways in underserved communities, you allow these businesses to contribute to the economy, which benefits the region immensely. We believe BIPOC-owned businesses choose the Seattle region because of these intentional efforts.”
Profits and purpose
Bank of America is Seattle’s largest bank, serving the financial needs of residents and businesses for more than 150 years. With more than $1.6 billion in loans and investments, it is the largest private investor in U.S.-based community development financial institutions and has also made a $1.25 billion, five-year commitment to advance racial equality and economic opportunity.
Investments are being made in the primary focus areas of health, jobs and reskilling, affordable housing and small business. The additional funding supports investments to address racial justice, advocacy and equality for people and communities of color, including those of Asian descent. Seattle has one of the largest Asian populations in the U.S.
Bank of America recently made a $1 million grant to the Wing Luke Museum of the Asian Pacific American Experience in Seattle’s Chinatown-International District. The funding is supporting building renovations, safety upgrades and technology platform enhancements at the museum.
The bank also supports the Black Future Co-op Fund that was created by four nonprofit leaders in Washington — all Black women. By working cooperatively and investing in Black communities and Black-led organizations, this new fund is designed to improve health, education, housing and economic opportunity among Black people for generations to come. The fund partners with the Consulting and Business Development Center at the University of Washington Foster School of Business.
“Our focus is shareholders, profits and purpose — and that purpose is, ‘How do we take those profits and better the communities we serve?’” Morehead said. “Making financial commitments in underserved Seattle communities makes this a fertile ground for diverse business success.”
Innovation and inclusivity
Wells Fargo also is a leading financial institution with a longtime presence in the Greater Seattle region.
In 2020, Wells Fargo created the Open for Business Fund, a $420 million small business relief effort focused on helping small businesses stay open, grow and maintain jobs during the pandemic.
Open for Business Fund grantees report reaching more than 203,000 small businesses and empowering them to preserve or create 254,000 jobs, including businesses owned by women and racially or ethnically diverse individuals.
Locally, Ventures, a CDFI, recently was awarded $350,000 as part of the Open for Business Fund program. The money will allow Ventures to provide 170 micro-grants, low-cost emergency loans, technical assistance and long-term business coaching for diverse, low-income entrepreneurs.
The Rainier Valley Community Development Fund — which serves an area that boasts 60 different languages — was also awarded a $1 million grant from Wells Fargo to help small businesses stay open and save jobs in the Seattle area. The fund’s programs address the needs of community members traditionally underserved by other lending sources.
“Our region is known for innovation and a strong business culture, from entrepreneurship to globally recognized companies,” Knell said. “We’re proud to be part of a financial ecosystem that has a track record of supporting startups that have innovative ideas in a community that embraces inclusivity. It’s a forward-leaning approach toward helping a diverse roster of companies that have great ideas so they can prosper.”