Affirmative Action Part 2
How the End of Affirmative Action Impacts Small Businesses and Government Contracting
Civility Localized Founder Christine Edwards shares a business-owners perspective
Christine Edwards, MPA is the Founder and Principal Consultant at Civility Localized, a certified MBE contracting with governments to improve their equitable community engagement capacity. (c) 2023 Civility Localized
As a Black woman business owner whose business regularly contracts with government entities to perform equity-based community engagement, I was deeply disappointed by the June 2023 SCOTUS ruling to end Affirmative Action in college admissions. I knew it would cause immediate harm in academia, and I feared it would have dire consequences in the business world as well.
Since then, those fears have continued to materialize.
I learned of one such development as I taught a session of our Public Sector Payday™️ curriculum to the August cohort of Central Piedmont’s Equity In Contracting Workshop. During class, I directed students to the SBA’s website, where a bright red disclaimer announced the court-ordered suspension of all new 8(a) Business Development Program applications.
It read:
Citing the Supreme Court’s June 2023 ruling on Affirmative Action, the United States District Court for the Eastern District of Tennessee enjoined the SBA from continuing its disadvantaged business enterprise certification for minority-owned businesses.
For clarity, the SBA’s 8(a) application identifies race as a disadvantaged business category. Not only are disadvantaged businesses being denied access to this certification right now, but the SBA is working on making definitions more narrow, and the application processes more burdensome (hello “Social Disadvantage Narrative” requirement). These changes are intended to bring the certification into compliance with the court’s orders.
The suspension and narrowing of this program is a major setback for minority-owned businesses, and a blow to the progress made in achieving racial equity in government contracting. It is also a sobering reminder that the fundamental rights of some have always been more secure than others in a society based on unequal footing.
The support provided by SBA set-aside programs like 8(a) hellp small businesses to achieve stability and growth over time in a market that otherwise would not be so friendly to small businesses. The Biden-Harris Administration recently set a record-breaking $163 Billion dollars in federal procurement opportunities for small businesses in 2022. Achievements such as this help to dictate local level spending as well.
And this is not a singular example. Hard-won gains in diversity, equity, and inclusion are being rolled back everywhere, in both the public and private sector. In early August, I tweeted this short list of impacted programs as I informally tracked the fallout from SCOTUS’s Affirmative Action decision in real time.
I’m a firm believer that when we all participate, we all win. Today the message to entrepreneurs who look like me seems to be “Don’t participate”, and with it, “Don’t win”.
Statistics consistently show the disadvantages Black-owned businesses face when securing capital, credit, and contracts. Yet equity and inclusion programs designed to right these wrongs are currently being sued and successfully shut down with dubious arguments of reverse racial discrimination. This backlash is a very tangible example of Toni Morrison’s definition of racism:
“The very serious function of racism is a distraction. It keeps you from doing your work. It keeps you explaining over and over again, your reason for being.”
In 2022, Black Women received less than 0.35% of venture capital spent in the US. The Fearless Fund, an Atlanta-based venture capital firm, was founded specifically to address this disparity. The fund does so by investing in women entrepreneurs of color. Now they are being sued for racial discrimination by the American Alliance for Equal Rights and Edward Blum. If his name sounds familiar, it’s because Blum was a key figure in the SCOTUS Affirmative Action lawsuit, Students for Fair Admissions v. President and Fellows of Harvard College.
Recently a US appeals court overturned a lower court’s decision to allow Fearless Fund to continue taking applicants for its grant program specific to Black women entrepreneurs while the lawsuit unfolds. This case, and others like it, have the potential to either shore up our national commitment to equity, or to set dangerous and harmful precedents that serve to dismantle strides toward equitable business landscapes. Much-needed diversity, equity, & inclusion initiatives are at stake everywhere. We must not look away. I cannot look away. I stand in solidarity with the Fearless Fund founders and with Black women entrepreneurs everywhere.
In another attempt to attack DEI initiatives designed to right historic and modern wrongs, another lawsuit recently hit the headlines. This time it’s a class action suit against Hello Alice, a woman-founded VC fund awarding grants to Black-owned businesses.
Hello Alice founders took to X/Twitter to explain the developing story themselves:
These lawsuits and attacks threaten so much progress made toward more equitable marketplaces and entrepreneurial landscapes.
Impact to minority owned business in Charlotte and North Carolina
According to a 2020 LendingTree study, Black-owned businesses make up 3.2% of all businesses in the United States. However, they only account for 0.6% of all revenue generated by businesses in the country.
Charlotte, North Carolina, the city I call home and where my consulting firm is headquartered, ranks a respectable 7th in the nation for playing host to more than 2,400 Black-owned businesses in a city with 48,835 businesses in total.
One of the questions we must now face is how cities like Charlotte - and Atlanta, the highest ranking city for hosting Black-owned businesses - will remain competitive for, and supportive of Black-owned businesses? History tells us that Black Americans, as we always have, will continue to establish and grow successful businesses no matter what obstacles exist. The question really is how will the cities we live and work in support those efforts in the absence of DEI initiatives that once served to level playing fields?
Black Americans are tht third largest racial group in the U.S. at just over 12% of the population. Less than 3% of all businesses are Black-owned. In Charlotte, North Carolina that percentage is slightly better at 4.9% Black-owned. In total, there are a little over 2,400 Black-owned businesses in the Charlotte Metro region. Source: Lending Tree
The End of Affirmative Action
The end of Affirmative Action and its consequences are setbacks for equity and inclusion everywhere. But we have come too far to give up or back down now. We will continue to fight for the rights and inclusion of all entrepreneurs.
For my part, I have worked hard to build a successful business providing essential, equity-based services to local governments. This is not the first time adversity has challenged entrepreneurs like me. I plan to continue supporting minorities and women in the business sector no matter what comes.
Equitable community engagement amplifies the voices and power of underserved communities and those pushed to the margins. This is the work I’ve always done, and it is the work I’ll continue doing. I remain grateful for partners who value Minority-owned Business Enterprises (MBEs) and those who continue to reach out to us for teaming partnerships on their proposals, not just to satisfy proposal goals, but to facilitate the growth of my small business which can only thrive in a culture of inclusion, now and in the future.
I’ll continue to support and amplify organizations working to promote equity in business, such as the National Minority Supplier Development Council and the Women's Business Enterprise National Council. I’ll continue to educate others on the challenges faced by minority-owned businesses. I’ll continue to point entrepreneurs of color to new and existing resources available through the Bipartisan Infrastructure legislation, and through participation in programs like Black Owners for Solar Services.
I hope you’ll join me. Together, we can create more just and equitable economies for all.