City of Indianapolis, LISC Indianapolis, Black Onyx Share Findings that Led to Equity1821
Indianapolis (June 7, 2022) – In 2020, the City of Indianapolis and Local Initiatives Support Corporation (LISC) Indianapolis supported a feasibility study for a local Black-led CDFI. The study, ‘Equity Pays: A Case for a Black-led Community Development Financial Institution (CDFI),’ was conducted by Black Onyx Management, Inc. and is now published and available for download.
The impetus to develop a Black-led CDFI came from the 2019 African American Coalition of Indianapolis’ Black Agenda. The agenda, developed with input from more than 800 Black Indianapolis residents identified this as a goal for Black economic inclusion and development. The value proposition of a Black-led financial institution is clear—helping Black businesses gain access to capital while supporting the traditional financial systems understanding of the best way to support Black businesses.
Highlights from the ‘Equity Pays’ report include:
· Black businesses matter. A Brookings report identified that achieving parity between Black and non-Black businesses in number of employer businesses, employee size, employee pay, and revenue would be a $52 billion economic boost and create 169,245 jobs.
· Black Business represent an opportunity. According to the 2019 Indianapolis Disparity Study, being Black in Indianapolis is statistically correlated to earning less money even after controlling for education, marital status, and age, with Black people earning $.82 to every dollar a white person makes. Black business development represents one of the largest opportunities for driving economic impact through inclusive growth.
· Black businesses are optimistic about their prospects, but lack the financial resources to achieve their full potential. More than 61% of Black businesses responded that they had growth opportunities that they couldn’t access in the next 12 months.
· A Black-led business lending institution is a key solution. In a survey of the City’s certified Black businesses, more than 80% reported never receiving a business loan. A Black-led non-profit CDFI attuned to the needs of Black businesses is a necessary addition to the alternative financing market.
The Equity Pays study was the foundation for the creation of Equity1821, the first Black-led CDFI loan fund in Indiana, which launched with a $1 million investment from the American Rescue Plan in October 2021. Equity1821 will leverage social, financial, and human capital resources with a focus on Black and other businesses of color in pursuit of racial equity in the small business ecosystem. The fund will create products and services that address the root causes of disparities for small businesses, as well as concerns expressed by Black business owners. Equity1821 recently earned the designation of African American Alliance Emerging CDFI Associate member with the African American Alliance of CDFI CEOs.
The fund is currently staffed through Black Onyx Management, Inc., and is undergoing the Treasury designation process to operate as a CDFI. Following that, a national search for a chief executive officer will commence.
“Since 1821 Black businesses have been in Indianapolis and they have mattered to the development of the Black community and the city as a whole,” said Marshawn Wolley, President and CEO of Black Onyx Management, Inc. “A Black-led CDFI, like Equity1821 will never replace traditional financial institutions, but it will serve as a much needed bridge for the Black community toward entrepreneurship and prosperity.”
“There is a definite need for increased access to capital for the Black community in Indianapolis,” said Dr. David Hampton, Executive Director of LISC Indianapolis. “By addressing this financial gap, we can drive meaningful change within the Black business community, strengthening opportunities for economic mobility and generating enduring wealth and equity.”
“The City of Indianapolis is proud to support our first Black-led CDFI business loan fund, thanks to Mayor Hogsett’s comprehensive package for American Rescue Plan funding,” said Deputy Mayor Jeff Bennett. “In order for all city residents to thrive, we must use an equitable approach. That means empowering Black business owners and entrepreneurs, guided by expert analysis like the Equity Pays study.”
“CDFI’s offer a wealth of curated knowledge and understanding regarding the needs of Black-owned businesses and their owners,” said Robin Staten, owner of Tiny Urban Escapes. “Partnering with a mission-driven lending organization was an opportunity for me to work together, beyond lending, to improve my neighborhood, create jobs and increase the financial and holistic wealth in underserved communities”.
Background
Historians believe that the first Black business in Indianapolis was established around 1821, when David Mallory established a barbershop. In 1963, the Reverend R.T. Andrews-led Mt. Zion Baptist Church boasted the largest minority congregation in Indianapolis and started a credit union to provide its members with the opportunity to accumulate savings and develop credit. In 1972, Dr. Frank Lloyd created the Midwest National Bank, the City’s first Black bank. And in October 2021, Equity1821, the City’s first Black-led CDFI was established.
A CDFI, Community Development Financial Institution, is a community-based financial institution that has a common goal of filling financing gaps in underserved and low-income areas. As community-based institutions, they possess a keen sensitivity to the needs of local residents and businesses, and their creation reflects a bottom-up, rather than a top-down, approach to community investment and revitalization.
###
Media Contact:
Megan Bulla, LISC Indianapolis
317-671-5055, mbulla@lisc.org
Local Initiatives Support Corporation (LISC) Indianapolis is the local office of a national organization that helps resident-led, community-based development organizations transform distressed communities and neighborhoods into healthy ones — good places to live, do business, work, and raise families. By providing capital, technical expertise, training, and information, LISC supports the development of local leadership and the creation of affordable housing; commercial, industrial, and community facilities; businesses; and jobs. In short, we help neighbors build communities.
Media Contact
Tamara Cypress, Black Onyx Management, Inc.
317.908.8903
As a benefit corporation and management consultancy, Black Onyx Management believes the journey of diversity, equity and inclusion is an intentional decision informed by empathy, a commitment to learning and a desire to change. We advance diversity, equity and inclusion by developing programs, implementing projects, analysis and assessments and trainings that are both action oriented and produce results. Our advisors leverage their senior leadership experience in government, Fortune 500 companies and major non-profit and civic initiatives to support clients on their diversity, equity and inclusion journey.
