Supporting BIPOC Microenterprise

“We could see there was a gap,” said Vermont Community Loan Fund Executive Director Will Belongia. “It wasn’t just that new businesses weren’t finding traditional sources for capital. We saw that they were not finding us or other support resources either. We wanted to meet them where they were at—not force them to come to us.”

 

In the spring of 2020, amid the storm of the coronavirus pandemic, the subsequent economic fallout, and the social unrest in reaction to George Floyd’s death, Mascoma Bank dove deep into the question of how we can truly  have an impact on the issues of inequity prevalent in the United States. As part of Mascoma’s commitment to diversity, equity, and inclusion, we began to hone in on ways the Bank could use philanthropy to address these inequities in our communities. Without a doubt, the Bank has had some influence through giving, but we felt that in order to have a deeper effect, we wanted to make a sustained commitment to an area where our expertise and financial resources could lay the foundation for change.

8% of Chittenden County residents are considered to be New Americans.

“We recognized that just writing a check can often perpetuate a system that’s currently in place, whereas to truly be an agent for change, we all need to approach this challenge in a different way,” said Samantha Pause, Mascoma Bank’s Chief Benefit Officer.

As we discussed ideas that connect to the Bank’s expertise and interest in fostering local economic development, the role of microenterprises rose to the top. Creating successful businesses lifts the economic vitality of a region. These businesses provide livable wages to their owners, who often are from underrepresented groups. In turn, those wages help ensure people can access proper health care, obtain housing, pursue education, patronize the arts, and more. But small businesses cannot thrive without capital and, as a bank, we knew there must be a way for our knowledge and resources to help.

 

 

Juan Adorno, initially as a student from UVM’s Sustainable Innovation MBA program and later as a Bank employee, focused his attention on the Old North End in Burlington, Vermont, which has become an increasingly diverse part of the state. He began to report back on a vibrant immigrant community that had great capacity for growth, yet potential entrepreneurs needed coaching and support to begin to understand how they could best access capital to start and fund their businesses.

Between Juan’s time on the ground and research by Mascoma team members Samantha Pause, Sarah Martel, and Mariah Davis, along with board members Sara Kobylenski and Joan Goldstein, we’ve been able to identify some key gaps in the microenterprise ecosystem that the Bank can help fill.

As a first step toward a solution, Mascoma Bank committed to funding a three-year pilot project with Vermont Community Loan Fund (VCLF) in Chittenden County. VCLF is a well-established organization with a strong history of funding small businesses as well as housing development throughout Vermont, and a commitment to diversity, equity, and inclusion. Thanks to seed funding from Mascoma Bank, the new VCLF Business Navigator will be based in the Old North End, making connections within the community to provide information and practical support to emerging and nascent business owners there and in the surrounding communities.

“This position and approach are very different because the Business Navigator is fundamentally a developer of relationships between trusted partners within Chittenden County and the new American communities,” said VCLF’s executive director, Will Belongia

In many new immigrant communities, there are issues of trust preventing new business owners from accessing capital. This could be a lack of trust in financial institutions here or long-held trust issues developed from experiences that happened in an immigrant’s country of origin. The Business Navigator can actively break down these barriers by partnering with groups that have built trust within these communities, making connections with VCLF as well as traditional financial institutions.

60 businesses or more can be directly supported by this program.

We believe, and VCLF agrees, that this pilot program will need three years of funding to really impact the BIPOC (Black, Indigenous, and People of Color) business community. After that time, we anticipate that the resulting relationships and connections will organically evolve within the community and become self-sufficient. In other words, the Business Navigator will work their way out of a job in Chittenden County, then, using the knowledge gained there, can expand outreach into other areas of Vermont. Meanwhile, the model, if successful, can be applied to a broad range of communities in other states.

VCLF will spend close to $400,000 on this program over three years, supported by a $180,000 foundational pledge from Mascoma Bank with $80,000 for year one and $50,000 per year for years two and three.

“I think it’s a tremendous statement by Mascoma to engage in long-term commitment to examine and change how we bring financial services to diverse communities,” said Belongia. “The goal of the VCLF is to create economic stability and healthy communities—but we can struggle for a range of reasons. We think serving a diverse population creates greater opportunities for new business creation and a broad range of economic benefits. Ultimately, this is not just a one-, two-, or three-year project. This alone will not overcome the societal barriers that are in place, but we need to do better. This is a step toward making financial services work for diverse communities so they can build wealth within those communities and throughout the whole state.”