The BuildNOLA Mobilization Fund will allow small businesses to grow their capacity and benefit from the numerous projects happening around New Orleans, ultimately helping to place more African-American men into living-wage jobs.
New Orleans is a city of opportunity—but one of barriers as well. More than ten years after Hurricane Katrina decimated many parts of the city, with traditionally poor and African-American neighborhoods hit hardest, some places have rebounded more than others. Over $300 million worth of investments are currently pouring into New Orleans, with an additional $3 billion expected. Yet over 44% of the city’s African-American men are not working.
The Network for Economic Opportunity is attempting to remove those barriers and help individuals access the opportunities they need to live a full life. The Network–which is a partnership between several different government agencies, nonprofits and employers–began with a focus on increasing employment in one part of the city, the Claiborne Corridor. When Mayor Mitch Landrieu saw the work in that community, he decided to expand it across the city, with a focus on connecting disadvantaged job seekers and businesses to new opportunities.
“Nearly 44 percent of working-age black men in New Orleans were not working last year, which is down from its peak, 52% in 2011. That’s an improvement, but we know we have to do better,” says Ashleigh Gardere, the Director of the Network for Economic Opportunity. “The Network for Economic Opportunity is working to close the unemployment gap and create generational wealth for our disadvantaged job-seekers. This is going to work by lifting everyone up and building pathways to prosperity for all of our citizens. It is about showing that if we all work together, we really can make a difference in what’s happening in the economy.”
Supporting the Growth of Disadvantaged Business Enterprises
To help create opportunity for all residents of New Orleans, particularly African-American men, the Network, which is supported in part by the Living Cities Integration Initiative, decided to hone in on supporting the growth and development of what they call “disadvantaged business enterprises” or DBEs. These enterprises are usually small and minority-owned businesses that have historically faced barriers to traditional financing mechanisms to access the funding and resources needed to fully scale up their work. Research shows that businesses that are run by people of color are more likely to hire people of color, so supporting the growth of these types of enterprises is one way the Network hopes to place more African-American men into living-wage jobs.
The Network is supporting the growth and development of small, disadvantaged businesses in several ways, including through technical assistance and creating connections with major anchor institutions. But a recent opportunity has the potential to accelerate the Network’s results in a way they haven’t been able to before.
The Launch of the BuildNOLA Mobilization Fund
The Network for Economic Opportunity announced last month the launch of a pilot of what will become the BuildNOLA Mobilization Fund, to support local disadvantaged businesses in accessing the capital necessary to bid on public construction and infrastructure projects. The fund will provide capital to help overcome common challenges of small businesses, such as meeting payroll while waiting for a client payment to come in, or staffing up to successfully bid on a new project. The fund will allow small businesses to grow their capacity and benefit from the numerous projects happening around the city.
New Orleans Mayor, Mitch Landrieu, joined City officials and philanthropic and small business leaders to announce the launch of the BuildNOLA Mobilization Fund in October 2016.
The fund itself is innovative in the way that it leverages the work of several different activities within the Network for Economic Opportunity. It will rely on a pipeline of small businesses from the “BuildNOLA” training program, which began last fall. This program offers technical assistance support to small businesses and helps them bid on and secure contracts.
Judith Dangerfield, Acting Director of the Office of Supplier Diversity, who led the launch of the BuildNOLA Mobilization Fund, commented: “Access to capital is a major barrier to economic competitiveness among small businesses in general and in particular to businesses owned by people of color. The Mobilization Fund not only seeks to remove this barrier but more importantly, to test the efficacy of alternative strategies and sources of capital to serve under-served communities and businesses that are forced to operate outside of the mainstream capital market place. If we get this right – if we create a vehicle that truly levels the financial playing field for small business we win big! Businesses owned by people of color and women win big! New Orleans wins big!”
Relying on the BuildNOLA cohort is just one way the Mobilization Fund increases the likelihood of success for the Network for Economic Opportunity. This initial round of funding support, $1,500,000, is a programmatic test which leverages the capacity of local community lender NewCorp before a full fund of $8-10 million is raised. By starting small, the Mobilization Fund will be able to determine the barriers for supporting disadvantaged small businesses, and design some solutions to what they encounter before scaling up. These lessons will be incorporated across the Network.
Creating Opportunity in New Orleans Blog Series
The Mobilization Fund just launched, and this blog is the first of many describing the work. We have developed the “Creating Opportunity in New Orleans” blog series in partnership with the Network for Economic Opportunity to share out the lessons from this work, in real time, so that you can benefit from what they are learning as well. We will post periodic updates on our blog. You can follow along by subscribing to our newsletter, and following us on Twitter or Facebook.
If you have ideas on what you want to learn more about from New Orleans and the Network for Economic Opportunity, leave a comment or send us an email.