By JR Valrey
Three out of four Black businesses are expected to close permanently, because they will not be able to weather the seemingly-unending financial storm that COVID’s shelter in place, and closure of non-essential businesses has created, since the March 12th shutdown. As businesses begin to open throughout Oakland and the Bay Area, there is a stark difference in the landscape, as vacant storefronts rapidly replace the once vibrant businesses that lined the town’s sidewalks, prior to the COVID pandemic.
With 10 million people in California signed up for unemployment, as of October 3rd, 2020, and the state having doled out over $101 billion in unemployment benefits, according to the San Francisco Chronicle, the economy of the Bay Area’s Black community has to somehow break free from this economic death spiral, that is gripping the nation.
Entrepreneurs Elisse Douglass and Trevor Parham have organized a local solution with the Oakland Black Business Fund, to aid the survival of Black businesses through this current depression. I conversed with them both, to see how and what the Oakland Black Business Fund is offering, the small businesses of the town.
JR Valrey: How did the Oakland Black Business Fund begin? What is the goal?
Elisse: Oakland Black Business Fund began with a crowdfunding campaign that I started to raise funds for Black Businesses in Oakland that had suffered damages during the George Floyd protests. The campaign raised over $100K in less than 10 days at which point Trevor and I decided to transition the campaign to the organization that is now OBBF, so that we could make a more comprehensive impact for Black businesses.
Trevor: The goals for the fund are to 1) Address historical economic injustice, 2) Position businesses for more ongoing resilience in the wake of the pandemic and 3) Facilitate the long term stability of the Black business economy, through increased access to capital and ownership of real estate.
JR Valrey: What kinds of small businesses is the Black Business Fund targeting?
Trevor: OBBF is targeting Black businesses that make critical contributions to the Black economy, either through their physical presence in the community or through products/services that support the empowerment of Black businesses and the Black community.
JR Valrey: What do the statistics, on what percentage of Black business owners get business loans versus white business owners, expose?
Elisse: The statistics show that Black businesses owners are half as likely to get access to capital compared to white business owners. Similarly, Black businesses were twice as likely to close during the first 3 months of the pandemic as compared to white business owners. These statistics expose the longstanding economic disadvantages that Black business owners have had to maneuver and overcome in the process of establishing sustainable and profitable enterprises. The economic disadvantages are directly tied to historical economic injustices that are rooted in racism; the credit and underwriting criteria used by banks and other financial institutions were designed to give preference to white borrowers or people who already have access to resources, capital, and wealth. As a result, the credit and lending systems have only contributed to the widening of the wealth gap, with Black business owners having to work far more than twice as hard to get to the other side.
JR Valrey: What is your goal, specifically for working to raise $10 million in relief funds, and another $1 billion by 2022? What is the trajectory for those funds?
Trevor: Our goals for our $10 million relief fund are to deploy capital and resources to 500 Black businesses in Oakland by the end of 2021, positioning them to procure even more capital from other funding sources. Our goal for the $1 billion investment effort is to deploy $500 million to 1000 Black businesses across the country by the end of 2025 and deploy another $500 million to secure and develop real estate for Black businesses across the country.
JR Valrey: How much of the funding has been raised up to date?
Elisse: To date we have raised over $160,000 for the relief fund and are getting commitments for the investment fund now.
JR Valrey: How will the OBBF determine the amount of capital or technical support each business gets?
Trevor: When OBBF receives applications, we first interpret their needs to determine the best way to support them with capital. We evaluate each business on a case by case basis, with the ultimate intention of using the capital to unlock even more capital for the businesses to create as much impact as possible.
JR Valrey: How fluid is the process to apply for the Oakland Black Business Fund? What is the process like? And how long does it take for a person to either get accepted or denied into the program?
Elisse: We designed the application for grant funding to be completed within 15 minutes or less in contrast to a lot of other application processes that create additional barriers to capital. The process asks for some general information about the business owner and their business, followed by a few simple questions about how they could best benefit from capital or technical assistance. We generally expect that it takes 1-2 weeks for someone to get clarity on what support they will receive. We are currently increasing our capacity to increase our response time, and speed with which we process applications.
JR Valrey: What will be done with the real estate that the Oakland Black Business Fund invests in?
Elisse: OBBF will invest in real estate that can be owned and/or occupied by Black businesses, either as an individual business or an entire development with a variety of Black businesses.
JR Valrey: Who are some of your partners? What made you work with them?
Trevor: We initially partnered with the Alliance for Community Development, Black Cultural Zone, and Bay Area Organization of Black Owned Businesses (BAOBOB), as three other Black led organizations that were already actively working to support Black businesses throughout Oakland. We already had existing relationships with these organizations through our work in the community, and specifically chose to work with them as a more efficient and effective way to reach a greater number of Black businesses.
Elisse: We have also formed a number of new relationships with other local corporations and tech companies who sought us out given our ability to help them make a more meaningful impact in the Black community through capital and technical assistance.
JR Valrey: Why is Black economic development a key next step in this progressive wave encapsulating the country?
Trevor: Black economic development is a key next step in our country’s ability to make progress, because economic empowerment for the Black community represents the greatest delta or potential for change. This country was built on the disenfranchisement of Black people and exploitation of Black labor, resulting in a significant portion of a population lacking the resources to contribute to the progress of this nation. We are currently facing an understanding that we still have not gotten past our country’s foundational racist values, and that they hold us back as a result. It’s time to invest in those that will benefit most from economic upliftment. Rising tides lift all boats.
JR Valrey: Can anybody make a tax deductible donation to the Oakland Black business Fund?
Elisse: Yes, anyone can make a tax deductible donation to Oakland Black Business Fund directly through our website. We are a fiscally sponsored project via the Alliance for Community Development.
JR Valrey: What should philanthropy’s role be in helping to stabilize Black businesses, specifically, in these times of mass business closings?
Trevor: Philanthropy has a major opportunity to help stabilize Black businesses right now, not only through capital and grantmaking, but also through thought leadership; setting the example for other private and public foundations to rethink their approach to funding and make bold moves and disruptive decisions to direct resources to a much broader range of Black businesses (whether non profit or forprofit). Furthermore, this is a time for philanthropic organizations to shift their thinking towards investing in the Black community in order to create a major social return for all communities and not simply viewing the Black community as a self-contained charity case.
JR Valrey: Who are some of the Oakland Black businesses that you have worked with so far?
Elisse: We have already worked with a variety of Black businesses in just the last few months. To name a few: Queen Hippie Gypsy, Betti Ono Gallery, Proper Fashions, Oakstop, Athenian Deli & Cafe, McMullen, People’s Choice Printing, The Black Card, Faced by Janea, and homiey Fruitvale.