Source: WOC in Tech Chat
Names are powerful; they can uncover sorrow and they can inspire hope. There are people whose names can inspire change and force us to question the status quo and power dynamics in society. For me, some of those names were Adama Traoré or Olivio Gomes in France. But also, Amadou Diallo, Breonna Taylor, or George Floyd in the US.
Sadly enough, those names are the tip of the iceberg of a list of systemic racism issues, a list that is not restricted to police brutality but spans several areas such as access to healthcare or housing and access to financing. For example, in the US, Black business owners are 2.4x more likely to be denied financing and when they do receive financing, they are least likely to be granted all the money sought at traditional banks compared to white-owned firms (13 percent versus 40 percent). But hopefully, as those names have inspired thousands to come together in protest, they can also push people to contribute to systemic solutions.
With these issues in mind, I started sourcing opportunities to contribute to racial equity through our work at Palladium Impact Capital (formerly Enclude), and found the FCDO Black female entrepreneurs bid which we decided to pursue and won. The project consisted of examining the barriers to investment faced by Black women entrepreneurs in the UK and the US, and proposing potential avenues to overcome them.
Now that it’s completed and the team has had some time to reflect upon our findings, there are some clear takeaways and learnings from the project.
Actions speak louder than words – Ensure accountability
In the US, Black female entrepreneurs were less reluctant to share their experiences around raising capital, though there was a generally feeling of fatigue around reports on the subject. The sentiment was that issues around access to capital were overly researched and documented. Instead of reports, the entrepreneurs demand significant actions, implementation of solutions, and accountability.
Data is a critical piece of the solution – Move forward with transparency
To drive accountability, we need transparency, and transparency requires clear actual data. But data on the number of Black female-owned businesses, their capital needs, and the financing they received proves to be an ongoing issue. Official business registers such as Companies House (UK's official business register) are not tracking the data and capital providers are rarely disclosing their allocations by both race/ethnicity and gender.
Acknowledging that this data can be personal and sensitive, there must be a way forward to overcome challenges around data gathering and analysis, be it anonymising data or incentives to report the data and monitor it. But, making commitments and implementing solutions without accountability and transparency is no longer acceptable if we genuinely want to address the systemic issues.
Ongoing collection and monitoring of actual data around capital flows are needed more than estimations and samples. This will drive a much more efficient approach when implementing solutions and help rebuild trust between entrepreneurs and organisations deploying solutions.
Solutions must be grounded in a holistic approach – Pursue systemic solutions
Tackling barriers to capital for Black Female Entrepreneurs and entrepreneurs of colour is a challenge that requires market-building solutions and deep systems change.
Earlier this year, the SOC Investment Group and the Service Employees International Union (SEIU) filed shareholder proposals at eight major financial institutions to request the conduct of regular racial equity audits that identify, prioritise, and remedy the adverse impacts of policies and practices on non-white stakeholders and communities of colour. The intent was for an independent third party to assess how financial institutions’ business practices, products, and services can contribute to racial imbalances and make the reports public.
To fight imbalances in access to capital, these major financial institutions have committed billions of dollars to entrepreneurs of colour. Yet, except for a few institutions, the reaction of most of them was to urge shareholders to reject such racial equity audits arguing they were already doing enough through initiatives or financial commitments.
This is a typical example of failure to recognise the need for accountability, transparency, and systemic changes in business practices. Despite the encouraging efforts of financial institutions, without assessments of business behaviours and practices through a racial equity lens, we will fail to identify how it can contribute to systemic racism.
Contributing to Social Equity is Everybody’s Responsibility
At Palladium, we are on a learning journey towards greater diversity, equity, and inclusion. The company became a signatory of the Race at Work Charter and committed to improve equality of opportunities in the workplace. Colleagues across the company are actively thinking about actionable solutions, one example is the creation of guidelines to enhance equitable outcomes in Palladium’s internal business development processes.
At Palladium Impact Capital, we also identified three potential areas where we are exploring actions to contribute to social equity:
1. Building on our gender expertise and the lessons learned to further bring racial and sexual orientation, gender identity and expression, and sex characteristics considerations into our work.
2. Applying a social equity lens in our business development, project delivery, and ex-post project reviews, which would better enable us to measure and track our impact in this area.
3. Expanding our networks to be closer to communities impacted by social inequity and support them through our services or corporate social responsibility initiatives.
We hope that these areas would be the beginning of ongoing actions to, from our position, help dismantle systemic inequalities, and hopefully growing our impact to scale over time.
For more information, contact firstname.lastname@example.org and learn more about Palladium Impact Capitals’ report on Black Female Entrepreneurs.