August 6th 2024.
As the threat of limited diversity, equity, and inclusion (DEI) funding looms over them, Black women entrepreneurs are speaking out about their concerns and strategies for dealing with this growing issue. Recently, a group of 70 Black entrepreneurs, mostly women, came together to discuss the future of their businesses. With DEI initiatives under attack, essential funding is now in a state of uncertainty. This means that many companies are struggling to stay afloat and get off the ground.
During the conversation, tech CEO Barbara Jones-Brown drew attention to a particular lawsuit that has put a halt to the distribution of Fearless Funds grants for Black women entrepreneurs. "There are grant programs out there that are giving people $100,000, $200,000, even $500,000," she explained, as reported by The Atlanta Journal-Constitution. "But when they try to give just $20,000 to Black women, they get attacked. It's all part of a calculated strategy to dismantle DEI efforts."
The lawsuit, filed by a conservative group led by Edward Blum, claims that the Fearless Fund's grant contest for Black women entrepreneurs is "discriminatory." As a result, the Fearless Fund's mission of investing in women-owned companies has been hindered by the legal battle. Interestingly, Jones-Brown's own success as an entrepreneur was made possible by DEI funding. She was able to grow her business, Freeing Returns, thanks to support from Black-led funds. This type of funding became more prevalent after the 2020 murder of George Floyd, which sparked widespread protests and a cultural shift towards supporting the Black community.
"It was a big year for creating Black-led funds," Jones-Brown recalled. "So, I was pitching to Black women, Black men, and they heard me; they saw me." However, now there is a growing conservative movement to dismantle DEI programs, despite the fact that funding barriers for minority-owned companies still exist. According to a 2021 study by the Minority Business Development Agency, Black entrepreneurs are 13% more likely to use their personal finances to keep their businesses afloat compared to their white counterparts.
"These organizations, funds, and programs are specifically designed to address the disparities faced by Black and brown communities and women," explained Donna Ennis, director of community engagement for the Georgia MBDA Business Center. "Even when you look at women-owned companies, regardless of race, they are significantly underfunded."
Despite these challenges, there is still hope. Some lenders have recognized the importance of supporting diverse entrepreneurs and are making efforts to keep them in business. But ultimately, the key to sustaining a business is generating sales. "We need to focus on making money through sales, not just relying on investments, grants, and non-dilutive funding," Jones-Brown emphasized. "Those things are great to get started, but we are in business to make money."
Unfortunately, it is likely that the anti-DEI movement will continue to persist. However, this has not deterred Black women entrepreneurs from coming together and advocating for the importance of diverse funding. And despite the challenges they face, they continue to persevere and thrive. In fact, the recent success of the "Win With Black Women" initiative, which raised over $2.5 million, is a testament to their resilience and determination to succeed.
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