FUNDING ENTREPRENEURSHIP
Helping build a vibrant small business and entrepreneurship ecosystem in North Minneapolis.
Bridging the Divide: How Business Ownership Can Help Close the Racial Wealth Gap,
FIELD at the Aspen Institute, © 2017.
Throughout 2016, we heard repeatedly from small business owners, individuals, and local leaders that North Minneapolis is a community steeped in history and rich with opportunity. But years and decades of disinvestment coupled with institutional racism has left the community without direct access to the goods and services residents need in a healthy economy. This has led to more than 30% of the population living in poverty. Unemployment rates hover around 13% (2015 data), compared to 3.8% for the city of Minneapolis as a whole (March 2017, Dept. of Labor).
In 2015 dollars, median household income sits around $39,759 for all North Minneapolis residents, compared to $51,480 for the city of Minneapolis as a whole. African American income is around $25,000 annually, which has flat-lined since 2000. And household wealth for communities of color (defined as someone’s net worth in savings and assets), is 10-13 times smaller than that of white households and has not recovered since the Great Recession (see Pew Research Center graph).
But these statistics don’t tell the whole story. Opportunities abound. Northsiders shared stories of an entrepreneurial spirit and of “hustle” that keeps their community vibrant and connected.
- According to the U.S. Small Business Administration, African American Owned businesses in Minnesota grew by nearly 60% from 2007-2012, and Hispanic-owned businesses grew by 75%. Minority-owned businesses overall grew 53%, while non-minority owned businesses declined by 3.4% during that same time period.
- In 2012, there were 47,565 minority-owned businesses in Minnesota with $8.7 billion in sales, employing over 63,000 people, with an annual payroll of $1.7 billion. This is more jobs than Mayo Clinic, the largest employer in Minnesota. (from “Latest Data on Minority Businesses in Minnesota, 2015, Concordia University and University of Minnesota report).
- In 2017, NEON’s (Northside Economic Opportunity Network) current entrepreneurs and aspiring entrepreneurs have at least $1.3 million in unfulfilled capital needs.
The Foundation is now looking to capitalize on opportunities to help grow a strong and vibrant local economy in North Minneapolis. For now and into the future we will be focused on supporting:
- Small business development,
- Entrepreneurship,
- Growing a locally-owned economic ecosystem.
We believe that this kind of locally-owned, locally-supported and locally-based ecosystem holds great promise to fulfill the hopes and dreams of Northsiders, while increasing local incomes and wealth.
Some Early Efforts We’ve Supported
Association for Black Economic Power
$428,610 over two years to support the development and establishment of a new black-led credit union in North Minneapolis. With only a couple small branch banks and dozens of payday lenders, North Minneapolis lacks access to financial services that support the community and help residents strengthen their financial situation. A black-led credit union will be the first of its kind in Minneapolis and provide the community with a trust-worthy financial partner. Read more here.
Appetite for Change
$200,000 over two years for capacity building and “the Campaign for Growth”. By listening to and responding to the community, Appetite for Change (AFC) has begun a movement of healthy food demand in North Minneapolis. AFC is now planning to grow its capacity as a provider, advocate and trainer to increase options and opportunities to healthy food for North Minneapolis. They have big dreams: a culinary training academy for North residents; a second restaurant or deli; expanded catering and event planning; purchasing and owning a building in which to house these dreams.
NEON (Northside Economic Opportunity Network)
$200,000 over two years for capacity building to support a growing community of entrepreneurs. NEON provides what it takes to create long-term entrepreneurial success by offering business training and development services, technical and financial assistance, co-working and office space, and access to capital through strategic investments for existing small businesses or prospective entrepreneurs in North Minneapolis. But NEON wants to and can do more. Learn more about NEON.
Nexus Community Partners
$50,000 to establish the North Star Black Cooperative Fellowship Program. The North Star Fellowship, a 4-month, cohort-based program, will provide participants with a history of cooperative economics in the Black community both nationally and in the Twin Cities. The Fellowship will provide a power analysis of Minnesota cooperative institutions from cooperative businesses to financial establishments; provide participants with knowledge of the cooperative landscape, cooperative skills and tools, and financing opportunities; help learners identify and target cooperative business boards, with the goal of building power in the cooperative sector; and finally, design a cooperative economic project (at any scale), along with a strategy for achieving that project.
City of Lakes Community Land Trust
$37,500 to lead a feasibility study to investigate the possibility of establishing a commercial land trust in North Minneapolis. Commercial land trusts function like a housing land trust in that the land trust would own the property and land and either lease or sell the property to a small business or start-up. This keeps the property affordable in perpetuity. This funding supports in depth research about commercial land trusts to determine whether CLCLT should pursue the idea further. If the feasibility study is positive, this model could secure retail space for Northside businesses at an affordable rent in perpetuity.
Some Ideas We’re Interested In
Entrepreneurship Training, Technical Assistance and Coaching
Entrepreneurs and emerging business leaders often need certain levels of training and technical assistance to develop and implement their business model. This includes access to business coaches who serve as mentors and guides, incubator space to develop their business concept, and life coaching to address personal matters that could hinder success.
Access to Capital
Access to capital is key for economic development – small business loans and investments that support emerging entrepreneurs. Without capital investments, small locally-owned businesses have a difficult time entering the marketplace and being successful. We’re interested in models of capital investment that provide access to real capital for local economic development.
Cooperatives
Cooperatives provide an alternative to sole proprietor business ownership that can bring multiple interests and owners together to share risk and financial benefit. We’re interested in models of cooperative ownership anchored in North Minneapolis.
Access to Affordable Commercial Property
Large swaths of North Minneapolis land and commercial property are owned by investors and individuals who do not live or work in North Minneapolis. This lack of local ownership limits local economic vitality and moves significant resources outside of the community and provides undue barriers to those looking to start or grow a business. We’re interested in creative models that can move more land and real estate into the hands of local residents for the benefit of the local community.
A Local Healthy Food Economy
It is well documented that North Minneapolis has limited access to healthy, affordable food, with only one grocery story for over 60,000 residents. We’re interested in creative efforts owned by the community with the potential to build a healthy food economy that generates increased economic vitality and financial resilience on the Northside.
To learn more or to share your ideas for how to help build a vibrant small business and entrepreneurship ecosystem in North Minneapolis, contact Coco.
