ImpactAlpha, May 26 — The vehicle’s objectives: Increasing access to capital for businesses that support economic growth in Black communities. Strengthening local Black institutions. And proving out the thesis that “there’s performance to be had in Black communities,” thereby attracting other investors, Local Initiatives Support Corp.’s George Ashton told ImpactAlpha.
The fund has made a $4 million deposit in Columbia, S.C.-based CDFI Optus Bank, which aims to build $100 million in local Black wealth in a decade, and a $3 million deposit in Unity National Bank, the only Black-owned bank in Texas. A $5 million loan in Dantes Partners will help preserve 3,000 affordable and workforce housing units in Washington, D.C. and New York City.
Dantes’ Buwa Binitie said the investment “represents freedom for us to be who we want to be and own our projects.” The fund is looking to make an additional 20 investments by the end of 2021.
The raw injustice and the social protests that followed the George Floyd murder last year pushed investors, corporate executives and policymakers to recognize the risk of systemic racism (see, “Seven ways finance has changed in the year since George Floyd’s murder”).
Commitments to the Black Economic Development Fund have come from Netflix, Paypal, Costco, Square, Inc., Aflac, Wayfair, DuPont, McKinsey and Co., ThermoFisher, HubSpot and Dicks Sporting Goods.
The Black Economic Development Fund is part of Project 10x, which also includes an Emerging Minority Developers Fund to connect developers with capital to build affordable housing.
LISC has so far raised more than $400 million for the combined effort to address persistent disparities in wealth, health and economic opportunity (see, “LISC looks to 10x investment in closing racial wealth gaps”).