According to the National Minority Supplier Development Council (NMSDC), NMSDC-certified minority business enterprises provide over $400 billion dollars in output, create and/or preserve more than 2.2 million jobs, and contribute $49 billion in revenues to local, state and federal tax authorities annually. Considering that not all businesses owned by people of color (POC) are NMSDC-certified, when you look at the overall economic impact the entire minority business community has in our community, it is significant.
The health and wellness of minority-owned businesses is vital to the economic well-being of our local community. New York Small Business Development Center (NYSBDC) counts roughly 30 percent of small businesses in New York state as minority-owned; that number grows to 55 percent in New York City. When you consider that roughly half (48%) of small business revenues are recirculated back into the neighborhoods they serve, the local impact that businesses owned by people of color can have is substantial, particularly in underserved and underrepresented communities. Supporting these businesses creates jobs, supports families, uplifts communities, attracts other businesses and community investments to the area, and overall strengthens the community.
Unfortunately, it’s these businesses that have taken the biggest economic hit from the pandemic. As a study by Kinsey & Co. states, part of the reason lies in the fact that Black and minority-owned businesses are more likely to be concentrated in the industries most affected by the pandemic — namely front-line, service industries. Many were financially unstable even before COVID-19 lockdowns – undercapitalized from systemic social and economic injustices that have long created barriers to growth and financial stability. The good news is that more consumers are consciously using their buying power to support businesses owned by Blacks and other people of color to add their voices to the call for economic and racial equity. Even more advantageous are the many large corporations stepping up with support; the headlines are full of companies like Comcast, Starbucks, VISA and JP Morgan Chase announcing substantial impact investments aimed at driving economic equity and inclusion.
At KeyBank, economic equity and inclusion is a foundational cornerstone of our business. Our initial $16.5 billion National Community Benefits Plan, launched in 2017, focused on supporting underserved communities and populations in our 15-state footprint. Here in the Hudson Valley and metro New York region, KeyBank has made more the $310 million in community investments, including $67 million in small business lending in low- and moderate-income (LMI) neighborhoods since the plan’s inception. The recent expansion of Key’s National Community Benefits Plan to $40 billion enables even greater partnership and support for LMI small businesses, affordable housing, community development, mortgage lending, and philanthropy nationally, including right here in Hudson Valley.
All companies – no matter the size – can support local POC businesses and help them thrive. Here are some things that all companies can do to better support these business customers.
- Create a diverse and inclusive workforce – Understanding customer perspective is the first step in meeting need. At KeyBank, we believe inclusive hiring practices that reflect the diversity of the customers and communities we serve are critical to creating value to our diverse customer base, and we instill that belief in our hiring practices and career development.
- Implement inclusive business practices – In addition to diversified hiring practices, all companies should empower employees with the knowledge and understanding to mitigate unconscious bias. At KeyBank, our employee onboarding experience includes a Diversity, Equity and Inclusion (DE&I) curriculum that addresses unconscious bias head-on and sets clear standards for service and product delivery, including credit and lending decisions rooted in sound risk management.
- Spend intentionally – Using a company’s buying power through intentional and inclusive supplier diversity can go a long way in creating economic access and opportunities for minority-owned businesses. KeyBank has a long-standing commitment to supplier diversity and creating mutually beneficial relationships with suppliers that are at least 51% owned by minorities, women, veterans, service-disabled veterans, LGBT or individuals with a disability. KeyBank’s program includes a forthcoming supplier development initiative, and a continued effort to identify diverse suppliers in underrepresented categories.
- Instill a culture of volunteerism – Don’t underestimate the value of volunteered time and expertise. Many of our teammates serve on community development boards and provide financial literacy education and small business development workshops through chambers and other business organizations. We also have a dozen employee resource groups which are core to Key’s DE&I culture and to advancing economic equity and inclusion through community outreach.
2020 brought significant challenges to our communities and a collective awakening about the injustices people of color face every day. We all have the opportunity and obligation to take action and influence change. Together, we can strengthen our communities while supporting businesses most impacted over the last year.
About the author: Louis Hoxha serves as Regional Retail Leader responsible for the branch network throughout KeyBank’s Atlantic Region, which includes Westchester and Fairfield Counties. He can be reached at 201-560-7310 or Louis_Hoxha@keybank.com
This material is presented for informational purposes only and should not be construed as individual tax or financial advice. KeyBank does not provide legal advice. KeyBank is Member FDIC. KeyCorp. © 2021