Decades of inequities in access to capital and other resources have put Latino and immigrant entrepreneurs at a disadvantage, which has been exacerbated during the COVID-19 pandemic. Between February and April 2020, active business ownership declined 17 percent among white entrepreneurs. However, reductions in active businesses owned by Latinos and those owned by immigrants were even larger: 32 percent and 36 percent, respectively.
In this report, we examine the pandemic’s effects on Latino and immigrant small-business owners and the role community-based organizations (CBOs) play in supporting these entrepreneurs. We explore how the National Association for Latino Community Asset Builders (NALCAB) improves organizations’ capacity to do this work through programs like the NALCAB-W.K. Kellogg Foundation (Kellogg) Building Equitable Communities through Place-Based Investment Program.
The report considers how five grantees support and guide small entrepreneurs to stay afloat. These grantees include Conexión Américas in Nashville, Tennessee; Franklin Neighborhood Development Corporation in Sacramento, California; Hacienda Community Development Corporation in Portland, Oregon; La Cocina in San Francisco, California; and Mandela Partners in Oakland, California.
These organizations support entrepreneurs through business development courses, incubation programs, technical assistance, and access to food halls and commissary kitchens. During the pandemic, their efforts have included launching relief funds and microgrants and helping food entrepreneurs pivot to online ordering, takeout, and food delivery applications.
CBOs Stretch Grant Money to Help Latino and Immigrant Entrepreneurs
The CBOs work to support underserved Latino and immigrant entrepreneurs and improve economic opportunities for vulnerable communities through business ownership. These organizations face many challenges in their work, and the CBOs themselves can need support. Many CBOs have limited resources and rely heavily on grants to conduct their work.
In fall 2018, NALCAB received a $1 million grant from the W.K. Kellogg Foundation to support Latino and immigrant communities through investment in neighborhood-based organizations. Each CBO received a $40,000 grant and technical assistance. The assistance ranged from community programming planning to policy and advocacy. The organizations also had to develop an action plan that articulates their long-term vision for equitable development.
The CBOs are working to nurture and grow entrepreneurship opportunities. And, in turn, networks like NALCAB are working to support the community-based organizations. We gleaned lessons from our analysis of their work, including the following:
- Action plans were the most significant and useful component of the program. These documents analyzed the organizations’ neighborhoods, articulated their vision for the community, and presented the goals, strategies, and actions they plan to use to achieve this vision, along with success metrics and a timeline.
- CBOs need flexible grant money. All five grantees used the $40,000 to cover staff time, but two of the five grantees shared they had to complement the grant money with additional funds to conduct the work they initially thought they would cover with the $40,000.
- Trainings should meet CBOs’ levels of experience. All five CBOs reported some understanding of and experience with the local policies and political processes that affect their work. While some said the trainings on policy and advocacy were helpful, others said they were already familiar with the content.
- The pandemic demonstrates the need for programs to be able to adapt. NALCAB adapted by gathering resources to help grantee organizations stay grounded in quick-moving policy developments. For example, NALCAB produced written guides for grantees on how to access government funds (e.g., through the federal Paycheck Protection Program), made $2 million in rapid response grants to more than 100 members of its nonprofit network across the US, and crowdsourced lists of how other counties and states were responding to COVID-19.
The assistance provided to Latino and immigrant entrepreneurs by the CBOs, and supported by NALCAB’s grant and technical assistance program, demonstrates an inclusive model for recovery. Our study finds the grantee support programs remove the most common barriers faced by immigrant entrepreneurs and entrepreneurs of color in a context where federal relief programs fail to reach the most vulnerable businesses.