After Protests, Help for Minority-Owned Businesses

From May 26, 2020 onward, a series of police brutality and anti-racism protests have flared up across more than 30 U.S. cities spurred by the killing of George Floyd at the hands of police in Minneapolis, Minnesota. The majority of demonstrations have been peaceful, however some businesses have become caught in the crossfire. 

The unrest has occurred in predominantly urban areas where minorities disproportionately reside. Minority-owned businesses in various places such as the Twin Cities (Minneapolis and St. Paul), Philadelphia, Los Angeles, Ferguson, and Wilmington have been some of the most impacted. While some of these small businesses had insurance, many do not have coverage for man-made disasters such as riots. Some other businesses stopped paying their insurance premiums to save costs during closures from the COVID-19 pandemic. 

The George Floyd protests have dealt a major blow to minority small businesses who were already disproportionately affected by COVID-19. Extended business closures from stay-at-home orders and a drop in consumption have  devastated their finances. This interruption has been particularly difficult for  minority businesses, as capital resources are less accessible in low-income neighborhoods of color.    While many minority business owners have spoken out in solidarity with the protestors, it is likely that some minority businesses that have sustained major losses could close permanently. 

Grassroots Interventions for Minority Businesses in Minnesota’s Twin Cities

Local civil society groups, and Community Development Financial Institutions have been crucial in assisting local minority businesses recover and rebuild from the destruction. Neighborhood organizations and protestors arranged clean-ups in the aftermath of the destruction while activists and community organizations have started various GoFundMe campaigns to help minority businesses rebuild, relocate, and compensate for losses. There have also been instances of armed civilians protecting black-owned business during the demonstrations.

Businesses in Minneapolis and St. Paul suffered during the protests against the murder of George Floyd.Below are a few examples of neighborhood organizations and teen activists who started crowdfunding campaigns for affected minority businesses:

  • Lake Street Council started a fund called “We Love Lake Street” to support small businesses in that community, they have received upwards of $1.5 million to help businesses in that area who are mostly minority and immigrant owned. The fund has an oversight committee made up of members of local economic development and community organizations. The organization is gearing up to request an aid package form the state and possibly elevate funding requests to the federal level.
  • Small Business on Lake Street is a fund started by Minnesota Teen Activists to help small and family owned business recover from destruction, they have raised over $70 000 so far with a donation goal of $500 000.
  • The Metropolitan Economic Development Association, a Minneapolis non-profit focused on building minority entrepreneurs created a GoFundMe to help local minority businesses harmed by the protests. The organization originated to help another Minneapolis neighborhood rebuild itself after police brutality riots in 1967. They have raised over $31 000 for local minority businesses with a goal of $40 000.
  • The Neighbors United Funding Collaborative established by the Hamline Midway Coalition is pooling funds to help small businesses and nonprofits rebuild their storefronts. Many businesses in Midway St. Paul are operated by immigrants and people of color.

Community Development Financial Institutions

CDFIs play an important role in the economic development of minority communities as they provide minority businesses with access to funding where traditional banking institutions do not serve these communities.  They are critical players in uplifting poor neighborhoods, reducing crime and increasing local economic activity in minority communities. 

Non-bank community lenders, such as Community Development Financial Institutions (CDFIs), are also trying to protect the minority businesses they fund. For example, in Ferguson, Missouri, the employees of a CDFI called Justine Petersen,which provides funding for minority business across the United States, formed a human barrier around a local restaurant to ward off violence. Justine Petersen has described itself as the “National Guard for Minority Businesses” where they have been first responders in cities such as Minneapolis and Wilmington, Delaware. They are also organizing neighborhood watch groups.

Partners in Economic Development 

Grassroots efforts to assist minority businesses highlight the importance of strong community ties and local institutions in supporting small business within local economies. Their proximity to local communities allows direct access in addressing the immediate needs of small businesses who are more vulnerable to sudden economic changes, whether it be a pandemic or unforeseen physical damage to their businesses. For minority businesses, these organizations fill the gaps in access to finance and act as buffers to unforeseen events that may impact their businesses. For EDOs, community organizations are critical partners in understanding local communities needs and the unique barriers that minority businesses face.