Impact Voices | March 29, 2021

Georgia is throttling voters. The South’s financial system is doing the same to its entrepreneurs.

Beth Bafford
Guest Author

Beth Bafford

The ban on offering snacks and water to people waiting in line to vote that was just passed into law in Georgia really got me.

Early in my career, I quit my job at a large bank to join the 2008 Obama campaign, first as a volunteer and then as an organizer. We recruited and trained volunteers to register voters, talk to their neighbors, and maximize voter turnout so everyone could make their voice heard at the polls. We gave our volunteer leaders named positions representing their particular role on the team and my favorite was always our “comfort captains.”

These were the volunteers who were in charge of keeping everyone happy, well-fed, and in good spirits. And on Election Day, they were the ones responsible for making sure that any polling locations with long lines were stocked with water and snacks so people would not give up and go home before casting their ballot.

What I loved about this role was the compassion and camaraderie it created between total strangers. No one had to disclose who they were voting for to get a bottle of water, a granola bar or (back then) a hug. Our comfort captains were supporting their fellow Americans as they exercised their most basic right. In the next election, this will be illegal in Georgia – part of a broader voting overhaul that will make it harder for Black residents and others to vote. 

Today, my day job is focused on shifting the behavior of the capital markets to be more inclusive and equitable. We – alongside incredible community lenders and leaders across the south – recently announced an effort to expand access to credit for small businesses in the region called the Southern Opportunity and Resilience (SOAR) Fund. In this context, I have been digging into data on banking and access to capital in the south and the disparities are staggering.  

Power shift

So what do voting rights and access to capital have in common? It’s all about power.

While the South’s deep history of voter suppression is well known, its poor record on access to financial services does not get much attention. The region lacks access to financial products of every type: venture capital, banking, lending, and philanthropy.

In 2019, Georgia saw just $63 per person in venture capital funding vs. $1,559 per person in Massachusetts. We all know Massachusetts is one of the top states for venture capital, but Georgia lags behind states like Michigan and Pennsylvania too, despite having similar populations. And Georgia is one of the states with the most venture investments in the region. Less than $8 million in venture funding went to Mississippi businesses in 2019 – that is the equivalent of one seed round in Silicon Valley.

For banking, Georgia and Massachusetts have similar numbers of banks per population, but drastically different asset sizes. Georgia has 4.5 times fewer bank assets than Massachusetts, which leads to much less lending. Overall, the south has 34% of American households but nearly 40% of the underbanked population.

Finally, philanthropy. The south gets $0.56 of every philanthropic dollar granted in other regions, according to a study done by the National Committee for Responsive Philanthropy. For giving characterized as supporting “structural change,” it is $0.30, despite the fact that there is a critical need for structural change. The south is the least upwardly mobile region in the country, particularly for people of color, and most states in the south have drastically higher than average portions of their population living in “distressed” communities, as defined by the Economic Innovation Group. Nationwide, 16% of the population lives in a distressed community. In Mississippi, Louisiana, Alabama, Arkansas, and Oklahoma, it is more than 30% of their populations.

If there are limited funds flowing to the south’s entrepreneurs, small business owners and community organizations, we are leaving opportunity on the table.  Like voting, access to capital grants people the ability to create their own future – in this case by generating income and building intergenerational wealth. When there is limited supply of capital, those making investment or lending decisions hold more power than they would in markets where demand doesn’t vastly outstrip supply. Those holding that power have no incentive to promote a more functioning capital market – much like politicians in the south who would lose their positions of power if every person in their state could vote.

These limited capital flows are not due to lack of ideas, innovation, or talent – many states in the south are leading the nation in starting new businesses. And our new remote reality, paired with lower cost of living and warm weather, suggests that population growth will bring more purchasing power to the region. But we will have failed if it is only the transplants who drive new economic growth and wealth creation. More than half of the Black population and more than a third of the Hispanic population lives in the south – and we are seeing much greater growth in new business creation from women, particularly Black and Hispanic women. But they are, as we all know, chronically underfunded across all asset types.


Luckily, there are strong local and regional community finance organizations (called community development financial institutions, or CDFIs) growing to meet this demand. We have the privilege of working with 13 of them through SOAR – Accion Opportunity Fund, Access to Capital for Entrepreneurs (ACE), Ascendus, BCL Texas, Black Business Investment Fund, Communities Unlimited, LiftFund, National Development Council (NDC), Natural Capital Investment Fund, Pathway, People Fund, Southern Bancorp Community Partners, and TruFund. 

These organizations – and many other CDFIs and minority depository institutions (MDIs) in the region – have been built to serve the large gap in the market for commercial lending and investing and will play a critical role in supporting the region’s equitable economic recovery. But they too have struggled to attract capital and resources at the scale that is required to fully dismantle the structural inequities in the region.

Thanks to Stacey Abrams and many other organizers, mostly incredible Black women, Georgia vastly expanded access to voting and returned power to the people who voted in record numbers in the last election (the new laws are trying to restrict this progress, but I doubt they will win in the end). It is time for us to address the structural challenges with our financial system in the same way – empower local communities, broaden access to resources and unleash the talent and creativity of people across the south to create a better future.

This is not political. Access to voting is a fundamental right in our democracy. Access to quality, affordable financial services should be a fundamental right in our economy, too.

Beth Bafford is Vice President, Syndications and Strategy at Calvert Impact Capital.