During a dealmaking summit for investors, venture capitalists, and entrepreneurs in New York City, the NAACP, the nation’s largest civil rights organization, announced the launch of NAACP Capital, a fund that will invest in fund managers and startups that are focused on closing gaps facing communities of color. PHOTO COURTESY OF NAACP.COM

Miami – The nation’s largest and oldest civil rights group has become the white knight for struggling Blackowned businesses and those caught in the wealth disparity compared to their white counterparts.

Last week, the NAACP unveiled its new $200 million Capital Fund, an economic justice initiative to help African-American businesses on the brink of insolvency and strengthen others through an investment fund.

The fund will increase over time to restore and beef up the economy for Black-owned businesses.

The plan was also designed to close the racial wealth gap by tackling the funding challenges Black-owned businesses face due to the economy and still reeling from the effects of the COVID-19 pandemic.

A lot of small Black businesses were forced to fold because they took a big hit from the pandemic and were unable to bounce back, as ownership declined more than 40 percent in 2022, according to a report by the House Committee on Small Business Committee.

The report details the impact COVID-19 has had on Black-owned businesses in the United States, which were less likely to handle mandated closures due to lack of access to financial relief.

The NAACP Capital Fund initiative aims to shift the economic landscape by focusing on small businesses and other ventures led by Black founders and entrepreneurs.

CONTINUED FROM 1A The initiative underscores the understanding that supporting Black business owners can foster sustainable growth for both the Black community and the larger economy.

It was created to reverse trends that have left many Black entrepreneurs excluded from economic growth, said NAACP President & CEO Derrick Johnson.

“As an ever-evolving legacy organization, the NAACP knows that innovation is borne out of inclusivity,” said Johnson. “Impact investing has the power to drive historic financial returns and uplift overlooked communities. Right now, deeply entrenched systemic barriers are curtailing the innovative progress necessary to breed healthy competition in a global economy. We’re seeking to change that.”

The 2020 U.S. Census Bureau reports that while Black-owned businesses make up roughly 10 percent of all U.S. businesses, they receive less than 1 percent of venture capital funding.

The disparity between entrepreneurial ambition and financial backing highlights systemic inequities which the NAACP Capital program aims to combat through the fund that serves as a form of reparative economic justice by providing Black entrepreneurs with essential resources for growth and success.

Alongside financial support from the NAACP Capital Fund, Black businesses will gain access to business development services, mentorship, and networking opportunities, equipping them to tackle the challenges of operating in today’s competitive market.

“Investment is the backbone of impact, and impact investing will shape socioeconomics for generations to come,” Johnson said. “It’s time to invest in fund managers who share a forward-looking vision that invests in innovation and technology, ensuring the economy works for everybody, not just a select few.”

Johnson said the initiative benefits not only Black entrepreneurs but also the entire U.S. economy by supporting diverse businesses, bolsters the market, fuels innovation, and generates jobs.

Blacks creating wealth for themselves in the United States has been a challenge for years compared to their white counterparts who seemed to have better opportunities and resources to maintain and increase their net worths.

Case in point, during the infamous 2008 housing market crash that led to a recession, 52 percent of Blacks nationwide lost their jobs and homes and investments while 21 percent of whites experienced the same faith, according to published reports.

But most whites were able to tap into their emergency funds and other financial resources to save their homes and other assets and prevent them going bankrupt.

Some Blacks were devoid of financial resources contingencies for emergencies because they said they weren’t made available to them due to financial status.

They said wealth was determined by one’s assets accumulated over time, such as savings, retirement accounts and real estate minus debts (credit cards, mortgages, etc.), and institutionalized racism has put the Black community far behind its white counterparts when it comes to accumulating such wealth.

But the recession continues to have an impact for Blacks and may last for decades.

According to the American Civil Liberty Union (ACLU), the recession was especially disastrous for Black Americans.

By 2031, white household wealth will be 31 percent below what it would’ve been had the recession never happened.

For Black households, wealth will be 40 percent lower, which will leave those families about $98,000 poorer than if the recession hadn’t taken place.