October 12, 2015

JPMorgan Chase, Detroit Development Fund and the W.K. Kellogg Foundation Announce $6.5 Million Loan Fund for Detroit’s Minority-Owned Small Businesses

Entrepreneurs of Color Fund will provide greater economic opportunity for small businesses that lack access to credit and primarily serve Detroit’s neighborhoods.

September 15, 2015 (Detroit) – The Detroit Development Fund (DDF), JPMorgan Chase & Co. and the W.K. Kellogg Foundation (WKKF) today announced a new $6.5 million lending program for Detroit businesses owned by entrepreneurs of color and businesses that primarily hire people of color. The Entrepreneurs of Color Fund will boost economic opportunity for minority-owned businesses in Detroit by providing them with greater access to capital and business assistance, allowing them to grow, hire local and further contribute to the city’s recovery.

Facilitated by DDF, a Michigan 501(c)3 Community Development Financial Institution (CDFI), the Fund will seek to provide financing for general contractors, small retailers and other neighborhood service businesses along with many other types of businesses. The Fund will help businesses that traditionally have lower credit quality, lack access to capital and staffing and primarily serve Detroit’s neighborhoods.

Small businesses have historically been at the heart of economic growth in Detroit, and they have the potential to reduce unemployment and expand opportunity for Detroiters. There are approximately 32,000 minority-owned small businesses in Detroit, according the U.S. Census. This ranks Detroit as the fourth largest U.S. city for the number of minority-owned businesses. Yet, despite their importance to the economy, recent research by Michael S. Barr, Professor of Law at the University of Michigan, says minority-owned businesses rely significantly more on investments of personal or family wealth than on outside debt or equity.

"For Detroit's comeback to be a true success, there must be opportunity for the Detroiters who have stayed,” said Detroit Mayor Mike Duggan. “This new program fits perfectly with what our administration is doing, through Motor City Match and other efforts, to make sure Detroit residents who want to start a business in their city have access to the capital and support they need to be successful."

“The Entrepreneurs of Color Fund is very exciting for us and the Detroit small businesses it will support,” said Ray Waters, President, DDF. “The unique structure of the Fund allows DDF to provide a variety of lines of credit and loans to accommodate the needs of entrepreneurs of color. “We are pleased to facilitate the pilot program and are grateful for the support of JPMorgan Chase and the W.K. Kellogg Foundation. We look forward to growing our lending in minority communities.”

Through a $3.5 million grant provided by the JPMorgan Chase Foundation, as part of its $100 million commitment to the Detroit’s economic recovery, and $3 million in program-related investments from the Kellogg Foundation, the Entrepreneurs of Color Fund will provide short and long-term loans. Loan sizes will vary, but the average loan will range from $50,000 to $150,000. The Kellogg Foundation developed and initiated the Fund because of its long-standing commitment to equity and to Detroit.

Businesses receiving financing will be able to use the capital to expand, finance equipment, address short-term cash flow needs and provide contractor lines of credit. The Fund will also provide small business loan recipients with technical assistance such as networking, marketing, business plan development and cash flow management. Eligible small businesses must be majority owned by people of color or have more than half their workforce made up of people of color. During implementation of this initiative, DDF will also work with Max M. & Marjorie S. Fisher Foundation’s Detroit entrepreneurship programming efforts.

“Neighborhood businesses are critical to Detroit's comeback, but many need access to the right capital to grow and thrive,” said Janis Bowdler, Head of Community Development for Global Philanthropy, JPMorgan Chase. “The Entrepreneurs of Color Fund is a unique approach that combines flexible financing and services to strengthen continued business growth in Detroit’s neighborhoods.”

“The Kellogg Foundation is not new to the idea of creating access to capital for people of color,” said La June Montgomery Tabron, WKKF’s President and CEO. “We know that investment in people of color is essential for equitable and effective urban development and this nation's sustained economic dominance. We are proud partners with Detroit Development Fund, JPMorgan Chase and others who will join us to improve the economic opportunities for entrepreneurs, who are also parents, to better support their families and ensure success for Detroit’s kids.”

Funding will allow the Entrepreneurs of Color Fund to provide loans and technical assistance and establish a loan loss reserve. The reserve will allow DDF to expand its lending criteria and help Detroit small businesses that traditionally did not qualify for a loan.

“Detroit’s strength has always come from entrepreneurs who have a great idea and can build that into a business that thrives and creates jobs,” said U.S. Senator Debbie Stabenow. “This new public-private partnership will help business owners succeed and grow, creating jobs and opportunity across the region.”

Michael Barr’s recent research, Minority and Women Entrepreneurs: Building Capital, Network, and Skills, published by the Hamilton Project of the Brookings Institution, calls for greater support for minority-owned and female-owned small businesses.

“Minority-owned businesses, including those in Detroit, often lack access to credit, to essential skills needed to survive and grow, and to business networks for mentoring and new business opportunities,” said Michael S. Barr, Professor of Law at the University of Michigan. “Increasing business formation by minority and female entrepreneurs is critical to improving the rate of entrepreneurship for the country as a whole, and generating new growth and jobs.”

Interested Detroit small businesses can learn more about eligibility by contacting the Detroit Development Fund at (313) 784-9547 or vholsey@detroitdevelopmentfund.com.

About the Detroit Development Fund

DDF was established in 1996 with a mission to “improve the quality of life for residents in underserved Detroit neighborhoods.” A 501(c)(3) and certified as a CDFI, DDF provides term loans and lines of credit to small businesses, small contractors, and for-profit and nonprofit affordable housing developers. DDF currently manages $23 million in loan capital. Since lending activities began in 2002, DDF has closed over $36 million in loans to businesses in Detroit, which helped to retain approximately 1,200 jobs and created approximately 1,800 new jobs. Approximately 72 percent of DDF’s small business loans have been made to minority owned companies, and over 1,400 housing units were rehabbed as a result of DDF’s loans. DDF lending activities have leveraged over $200 million in public/private investments with more than $7 million in projects under management.

About JPMorgan Chase & Co.

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

About the W.K. Kellogg Foundation

The W.K. Kellogg Foundation (WKKF), founded in 1930 as an independent, private foundation by breakfast cereal pioneer Will Keith Kellogg, is among the largest philanthropic foundations in the United States. Guided by the belief that all children should have an equal opportunity to thrive, WKKF works with communities to create conditions for vulnerable children so they can realize their full potential in school, work and life. The Kellogg Foundation is based in Battle Creek, Michigan, and works throughout the United States and internationally, as well as with sovereign tribes. Special emphasis is paid to priority places where there are high concentrations of poverty and where children face significant barriers to success. WKKF priority places in the U.S. are in Michigan, Mississippi, New Mexico and New Orleans; and internationally, are in Mexico and Haiti. To learn more, visit www.wkkf.org or follow WKKF on Twitter at @wk_kellogg_fdn.

Media Contacts:

Detroit Development Fund: Ray Waters, President of Detroit Development Fund, 313.784.9547.

JPMorgan Chase: Steve O’Halloran, steve.ohalloran@chase.com, 302.282.5699

W.K. Kellogg Foundation: Dana Linnane, dana.linnane@wkkf.org, 269.969.2301

March 17, 2021

How Philanthropy Can Move from Crisis to Transformation

Dimple Abichandani, Executive Director of the General Service Foundation, urges grantmakers and the philanthropic sector to take concrete actions to defend democracy and speak out against racist attacks on people of color. This post was originally published here by the Trust-Based Philanthropy Project.

Dimple was part of the first Philanthropy Forward: Leadership for Change Fellowship cohort, a joint initiative of Neighborhood Funders Group and The Aspen Institute Forum for Community Solutions. General Service Foundation, which partners with grassroots organizations to bring about a more just and sustainable world, is a member of NFG.


  

Dimple AbichandaniIt was just a year ago, and yet it feels like a lifetime.

Last March, I was dreading a hectic month packed with too much work travel. Long before we had heard of Covid-19, many of us had been preparing for 2020 to be a consequential year, one in which our democracy was on the line.

My mother had generously traveled from Houston to help with childcare during my travels. Her two-week visit turned into three months, and our worlds as we knew them changed.

Covid happened.  

Then the racial justice uprisings happened.

The wildfires happened.

The election happened. 

And then an armed insurrection to overturn the democratic election results happened.

Every turn in this tumultuous year reaffirmed the reality that justice is a matter of life and death. 

Our democracy survived, though barely. But more than half a million Americans did not, and this unfathomable loss, borne disproportionately by communities of color, is still growing.

Across the philanthropic sector, funders stepped up to meet the moment. We saw payouts increase, the removal of unnecessary bureaucracy, and commitments to flexible support from not only public and private foundations but also individual philanthropists who gave unrestricted billions.

A year ago, we all faced a rapidly changing reality — one that it made it hard to know what the next month, or next year might hold.  Now, we have turned a corner in a most consequential time in American democracy, a time that has been defined by the leadership of Black women and grassroots movements for social justice that are building the power of people — and these movements are just getting started. There is momentum for change, leadership that is solidly poised to make that change, and broad-based support for the bold solutions that will move us towards a more just and equitable society.  We are in a dramatically different time that continues to call for a dramatically different kind of philanthropy.

As we look back on this year of crisis, and see the opportunities before us now more clearly, how are funders being called to contribute to the change we know is needed?  To answer these questions, I point to the truths that remained when everything else fell away.

We have the power to change the rules.

In the early days of the pandemic, close to 800 foundations came together and pledged to provide their grantees with flexible funding and to remove burdens and barriers that divert them from their work. Restrictions on funding were waived, and additional funds were released. These changes were not the result of years-long strategic planning; instead, this was a rare example of strategic action. These quick shifts allowed movement leaders to be responsive to rapidly shifting needs. Grantees were more free to act holistically, to mobilize collectively, make shared demands, and achieve staggering change.

Today, our grantees are coping with the exhaustion, burnout, and trauma from this last year, the last four years, and even the last four hundred years. Recently, many of us have begun to invest more intentionally in the healing, sustainability, and wellness of our grantees. Systemic injustice takes a toll on a very individual human level, and as funders, we can and should resource our grantees to thrive.

Ash-Lee Woodard Henderson, Co-Executive Director of the Highlander Research and Education Center, has urged philanthropy to, “Fund us like you want us to win.” Last year, we learned that we are capable of doing just that — and doing it without delay. Let’s build on funding practices that center relationships and shift power to our grantees.

White supremacy got us into this mess; racial justice will get us out.

Racial justice went mainstream in 2020 as the multiple crises exposed deep inequities and injustices in our midst. In the months after the world witnessed a police officer brutally murder George Floyd, many funders responded with explicit new commitments to fund Black-led racial justice work. These standalone funding commitments have been hailed as a turning point in philanthropy — a recognition of the importance of resourcing racial justice movements.

As we move forward, we must ensure that these newly made commitments are durable and not just crisis-driven. Movements should not have to rely on heartbreaking headlines to drive the flow of future resources. We can build on new funding commitments by centering racial justice in all our grantmaking. As resources begin to flow, let’s ensure that our frameworks are intersectional and include a gender analysis. To demonstrate a true desire to repair, heal, and build a multiracial democracy, philanthropy must do meaningful work in our institutions so that, at all levels, there is an understanding of the root causes of inequality and the importance of investing in racial justice.  Rashad Robinson, President of Color of Change, captured the centrality of this when he said, “We don’t get racial justice out of a true democracy. We get a true democracy out of racial justice.”

We know how to be “all in” when it's important. In this next period, it’s important.

With crisis as the rationalization, many endowed foundations were inspired to suspend a practice that our sector has long taken for granted: the 5% minimum distribution rule. In the face of compounding threats to our lives and our democracy, 64 individuals and foundations pledged to increase spending to 10% of the value of their endowment in 2020. And for the first time in years, the philanthropic sector is giving meaningful attention to the topic of spending decisions and the problem of treating the payout floor as though it is the ceiling.

To take full advantage of this once-in-a-generation opening for transformation, funders must put all the tools in our toolbox behind our ambitious missions. Social justice philanthropy can build new spending models that are not only more responsive to the moment, but also set our institutions up to better fulfill our missions — today and in the long-term.

This past summer, 26 million people marched in the streets of their small and large cities to proclaim that Black lives matter. It was the largest mobilization in our country’s history. Last fall, despite numerous efforts to suppress voters, social justice organizers mobilized the largest voter turnout we’ve ever seen. Now, as a result, we are in a moment that holds immense possibility. 

In big and small ways, we are all changed by this year. 

Our sector and our practice of philanthropy has changed too.  Let’s claim the opportunity that is before us by reimagining our norms and adopting practices that will continue to catalyze transformation.  The old philanthropy has been exposed as unfit. The new philanthropy is ours to create.

March 25, 2021

Philanthropy must be accountable: NFG's March 2021 Newsletter

We need each other and all of us in the fight for racial, gender, economic, and climate justice. The latest incidents of hate against AAPI women, elders, and our communities have left us grieving, angry, tired, and steadfast in our commitment to make philanthropy more accountable to AAPI, Black, Indigenous, and people of color communities and low-income communities. See our full statement calling on all of us to Stop Asian Hate.

As Dimple Abichandani, Executive Director of General Service Foundation, said in Neighborhood Funders Group’s 40 Years Strong convening series, "We must create cultures of accountability. How are we meeting this moment? A lot of what we need to do could be called organizing, but I think of it as meaning making." It is our collective work to make meaning of systemic injustices and resource power-building led by AAPI, Black, Indigenous, and people of color communities at the level that is necessary for all of us to thrive.

NFG is holding philanthropy accountable by urging funders to utilize all of their institution’s assets to pursue social justice, center worker justice movements and strategies, strengthen organizing infrastructure built by Black women to shift political and economic power, support reparations and drive wealth back to Black and Indigenous communities, and reimagine public safety and community care to ensure everyone has a place to call home.

In the next few weeks, we'll be announcing more opportunities to connect with the NFG community, sharing Funders for a Just Economy's next Building Power in Place report featuring organizers in Texas, and releasing a new report on rural organizing in New York state commissioned by Engage New York and NFG's Integrated Rural Strategies Group.


In solidarity,
The NFG team

Read the newsletter

Find More By:

News type: