Guest Post by Aliana Pineiro of the Boston Impact Initiative
“People ask ‘What is to blame for growing inequity?’ I challenge the premise of the question – that something has gone wrong. This system is doing exactly what it was designed to do.” Mayor Chokwe Lamumba of Jackson, MS.
In Boston, the racial wealth gap is one of the largest in the nation. According to a 2015 study by the Federal Reserve Bank of Boston, the median wealth of white households was $247,500 while that of U.S.-born Black households is just $8.
At Boston Impact Initiative Fund we are blazing a trail to build a new system. We believe that an equitable and sustainable economy is possible through investments into local enterprises that create the opportunity for people of color to own and control their future. We invite our community, especially people of faith and faith-based institutions that care about social justice and ecological sustainability, to join in building this new system by investing in their values.
BII is a nonprofit impact investment fund that takes an integrated capital approach to investing into small enterprises in Eastern Massachusetts. Because entrepreneurs of color face challenges in raising investment dollars both in quantity and type of capital, we utilize debt, equity and grant capital and often walk alongside an enterprise as it grows, investing different types of capital over time. We cultivate relationships with enterprises based in mutual respect and trust and use that as the ground upon which we build the investment structure.
For example, when Teresa Maynard of Sweet Teez Bakery got the call from Whole Foods to place an order for 48,000 pies – 100 times the size of any previous order – she knew she was going to need a partner to help her finance production. BII provided her with a short-term loan at a low interest rate that helped her successfully fulfill the order and hire from within her community while paying a living wage.
While we do have a couple of bakeries in our portfolio, we don’t focus on a particular sector. In fact, we have a wide variety of business sectors represented, including environment and energy, manufacturing, food and agriculture, and healthcare. These companies can provide goods and services directly to individuals or to other business, but all our portfolio companies must meet our three criteria for investment, listed below.
- Economic justice: access to ownership for people of color, women and/or workers; quality job opportunities with benefits; and worker participation in decision making.
- Community resilience: connections to local suppliers and customers; stewardship of the natural environment and resources; and relationships with stakeholders in the community.
- Enterprise health: good financial position and capital structure; quality of leadership team and trust between leaders and employees; and organizational culture that allows for creativity and innovation.
One of many great examples of portfolio companies that showcases our values is Wash Cycle Laundry, a commercial laundry service provider that expanded to open a Chelsea, MA plant in 2017 after starting out in Philadelphia and Washington DC. The company is a second chance employer, partnering with local organizations to recruit and train employees who are returning citizens, formerly homeless, or in recovery. Wash Cycle has installed advanced technology to conserve water and energy in its facilities and uses cargo bicycles to deliver laundry to many of its smaller local clients. BII provided the company with investments in the form of both debt and equity to establish its Boston plant.
As a local impact investing fund, not only do we invest in Eastern, MA-based enterprises, but we also encourage ordinary people and small institutions in Massachusetts to join in our mission by buying a “Community Note”. Private investment funds are usually closed to individuals and institutions that do not have significant wealth (known as “non-accredited investors,”), but we believe that it is important for participation to be open to all community members, especially faith-based institutions. This allows for those individuals and institutions who believe in our mission to align some of their investments with their own values of social justice and ecological sustainability.
At BII, we acknowledge that the dominant system is creating greater inequality by marginalizing people of color and abusing natural resources. However, we are forging our own path, inspired by the resilient and innovative entrepreneurs of Boston and the values-based investors that are joining us; we are confident that a new way is possible.
Join Boston Impact Initiative, Eventide Fundsand the Cooperative Fund of New England on November 6th as BFJN hosts a panel discussion about how the way we invest our money can reflect our values, create social change and promote thriving communities. We’d love to see you there – at Church of the Covenant, 67 Newbury Street from 7-9. Light refreshments will be served. Click here for details and respond our Facebook Event page.