word on the street | september 2017
Over the first half of 2017, Next Street worked with the St. Paul, MN-based Bush Foundation to explore how best to support the needs of social purpose businesses in the Twin Cities and create a thriving and supportive ecosystem. The Foundation encourages individuals and organizations to think bigger and differently about what is possible in communities across Minnesota, North Dakota, South Dakota, and the 23 Native nations that share the same geographic area. In 2015, they launched the Social Business Ventures Initiative with a guiding goal to make the Twin Cities one of the best places in the country to launch and grow social purpose businesses.
The Bush Foundation wanted to understand the local social business community needs, including capital, and use that as their guide. Next Street worked with the Foundation to explore opportunities to provide capital and other support to social businesses. Our team interviewed 40+ local stakeholders – including social businesses, capital providers, and business support organizations – to assess the current social business ecosystem in the Twin Cities. They also wanted to learn from others’ experience, so we interviewed 20+ national thought-leading practitioners to capture trends and innovations. A presentation of our findings can be found on the Bush Foundation website, along with more detail on the initiative.
“The Next Street team has been instrumental in helping us better understand the capital needs of social businesses in our region. They have been enthusiastic, wise and engaged partners all along the way.”
The Bush Foundation is also working to catalyze the local impact investing ecosystem. In 2016, the Foundation supported a project to map the local ecosystem and convene key stakeholders as a call to action. It worked. You can read more, including detail on the launch of a $20 million impact investing collaborative, over at Mission Investors Exchange.
Client Spotlight: Living Cities
Next Street recently completed a project with The Integration Initiative (TII), one of Living Cities’ signature initiatives, working with local city teams in New Orleans, San Francisco, and Albuquerque to assess the small business ecosystems. The work aimed to develop a common understanding of the growth dynamics in each city among small businesses, with particular focus on business owners of color and low-income business owners, and to identify the potential interventions that could help those businesses succeed.
Through this work, we identified priority business segments where business owners of color and low-income business owners have the greatest opportunity to develop and thrive, taking advantage of existing economic growth trends. We evaluated key infrastructure in each community – focusing on business support service providers and capital providers – to understand the gaps and needs, and co-developed a set of potential interventions for each city.
Although the three cities are incredibly different, demographically and economically, several key findings and trends from our work were relevant across the three cities, including:
- Businesses led by people of color are most prevalent in low margin sectors, which makes it more challenging to build intergenerational wealth
- Social networks and relationships are among the most critical barriers to success in high growth, scalable industries
- Resources are difficult to navigate for small business owners, and each city could benefit from a “backbone” or coordinating mechanism to direct business owners to the appropriate supporting services and service providers
While each city’s capital landscape is distinct, there is a dearth of private equity and venture capital activity intentionally focused on investing in people of color. Today, people of color lack substantial networks among these investors, their portfolio companies and the myriad support organizations that are focused on serving high-growth startups. In order to change this dynamic and foster more inclusive economies, there is a need to build a base of entrepreneurs of color in each city, and weave together a network of investors that are notably supportive of and intentionally serving entrepreneurs of color.
new on the street
Community Economic Development Organization Associated with the Obama Presidential Center Announces Leadership
A community economic development organization is being formed to ensure that the development in and around the future Obama Presidential Center benefits neighboring communities and their residents. It was recently announced that former U.S. Education Secretary Arne Duncan and Sherman Wright, a local marketing agency executive, will co-chair this new organization. Read more coverage here.
CHANGE Philanthropy 2017 Unity Summit
Next Street Founder and Chairman Tim Ferguson was delighted to participate in the CHANGE Philanthropy 2017 Unity Summit: Investing in Movements for Equity this week in New Orleans, Louisiana. Centered around themes of Resistance, Protection, and Empowerment, the Unity Summit gathered 500 allies, practitioners, thought leaders, and mobilizers in philanthropy to discuss equitable philanthropic practices. Tim was invited to speak on a panel reacting to the paper, “The Tapestry of Black Business Ownership in America: Untapped Opportunities for Success.” Published by the Association for Enterprise Opportunity (AEO), the paper “explore[s] the story of Black-owned businesses” in the United States by highlighting the diversity of experiences of Black business owners, and offering solutions to address the barriers they face. Next Street was proud to have Tim engaged in such a thought-provoking, forward thinking dialogue to better serve minority-owned small businesses across the country.
The 2nd annual PITCH is a collaborative M/WBE business plan competition designed to elevate the profile of minority and women business owners in the city of Buffalo by awarding them $50,000 in prizes. Members of the Next Street Team served as coaches and judges for contestants of “THE PITCH” competition. Winners will be announced on September 28th, and all participants will be able to access ongoing support at the Beverly Gray Business Exchange Center.
Coalition of Urban and Metropolitan Universities (CUMU) Conference
Next Street will be co-presenting with the University of Chicago at this year’s annual CUMU Conference next month in Denver, CO. Through the presentation, Getting Creative to Buy and Hire Local: Meeting Anchor Goals through Food Service Contracts, we will share some of the challenges and opportunities we have learned through our work with the University of Chicago.
heard on the street
- Three ways to help hit your revenue goals by the end of the year
- Per Scholas: Destinies Changed, Lives Improved
- NYC announces a new outreach vehicle that will bring help to small businesses in the deepest reaches of the boroughs
- How can monitoring, evaluation, and learning become even more powerful tools for social sector leaders?
- Obama Foundation minority contracting demands for Obama Center