“The model you are doing will benefit people across the country,” she told partnership members and local business leaders on Wednesday. “Our collective goal is to create an economy in which every person, wherever they live, has the opportunity to succeed and prosper.”
As part of the pledge, 25 local heavyweights, including Capital One, Dominion Energy, Inova Health and the Washington Commanders, pledged to increase spending on deals with minority-owned suppliers, invest in affordable housing and donate money to lending organizations that focus on underrepresented populations.
Of the nation’s 53 largest metropolitan areas, Washington has ranked 51st over the past decade in “racial inclusion,” a measure of income and employment disparities between non-Hispanic whites and people of color, according to figures from the Brookings Institution.
The Greater Washington Partnership, a CEO association whose footprint stretches from Baltimore to Richmond, was formed just over five years ago when the district failed to bid to host the Washington Olympics. 2024. The group then shifted its focus to growing and promoting the regional economy, with a focus on issues such as transportation and job training.
But following the police killing of George Floyd and as the coronavirus pandemic increased the economic situation racial disparities, partnership leaders determined that more needed to be done in the name of racial equity, said Francesca Ioffreda, the partnership’s vice president for inclusive growth.
“We took a very rigorous approach to performing an audit to understand the challenges in our region,” she said in an interview, “and particularly where the business community was particularly well placed” to perform the change.
Companies and organizations will administer the pledged money themselves. Ioffreda said the partnership serves to bring business leaders who face the money together, encouraging them to share best practices and, in some cases, ask for additional dollars.
The partnership will also track specific commitments from each company, although individual amounts in the $4.7 billion total have not been made public.
More than half of the pledge – $2.6 billion – consists of pledges by the companies to increase their spending on supply contracts with “diversified suppliers”, including minority-owned businesses.
How this is defined varies from company to company, Ioffreda said. This may be a broader pool of potential suppliers including those owned by veterans or women. Companies with more granular data specifically prioritize suppliers owned by Black and Latino contractors.
Another $1.5 billion will go to a loosely defined category of “wealth-building opportunities” for underrepresented communities, including investments in affordable housing and local community organizations.
Some of these commitments, such as a fund set up by Amazon to create and preserve affordable housing in the DC area, have already been independently announced. (The company, which is set to receive up to $773 million in state and local incentives for the headquarters it is building in Arlington, was founded by Jeff Bezos, who also owns The Washington Post.)
The smallest pool of money in the partnership commitment, $619 million, will be funneled to community-oriented lending organizations, which provide capital to small businesses that might otherwise face obstacles getting loans from traditional banks.
Harris said such institutions can help overcome the hurdle that underserved entrepreneurs constantly face: being told they’re “unbankable.”
“Community lenders can often see potential that others might overlook,” Harris said.
Also at the event on Wednesday, federal officials announced they would extend and expand the Community Advantage Lending Program, a pilot project launched by the Small Business Administration that seeks to commit money to such lending organizations.
“The private sector is on the right track to keep trying to really think about how they can support small businesses,” SBA Chief Isabella Guzman, another speaker at the event, said in a statement. interview. “Access to capital is always, above all, the biggest challenge.
The partnership’s engagement may nonetheless face the same limitations highlighted by previous commitments by American companies to address systemic racism.
Of the nearly $50 billion pledged by the nation’s 50 largest public companies last August, only $4.2 billion came in the form of outright subsidies, according to analysis by the Washington Post. The rest was committed in the form of loans or investments from which companies could profit.
And while much of that money has gone into promoting upward black economic mobility, only about $70 million go groups focused on criminal justice reform, the cause that sparked mass protests after Floyd’s killing.
Before the small crowd of business leaders on Wednesday, Commerce Secretary Gina Raimondo seemed concerned about another hurdle to the promise: putting more dollars behind her to get started.
“I think we can get over $5 billion, maybe $6 billion,” she said, to laughter from the audience. “We still have time!”