Current workforce development dollars are largely geared towards training programs that do not ensure trainees are placed in good jobs with sustainable career pathways.
11.8 million working age Americans are currently unemployed, including 4.3 million who have been jobless for at least 27 weeks. From a different angle, this accounts for unemployment rates of 24% among youth, 13.7% among Black Americans and 9.1% among Latinos.
While the national unemployment rate has decreased over the last year with job gains in the business, food, retail and health care services sectors, these gains have not reached those hardest to hire, such as foster youth or formerly incarcerated individuals. At the same time, current workforce development dollars are largely geared towards training programs that do not ensure trainees are placed in good jobs with sustainable career pathways.
According to Jose Corona, CEO of Inner City Advisors (ICA), this mismatch between traditional workforce funding one on side and job creation and placement on the other is a real problem. He sees investing in the growth of minority-owned small businesses as one solution. Between 2002 and 2007, the number of minority-owned businesses grew at three times the rate of white-owned businesses, and revenues grew more than twice as fast. Small businesses also create two out of every three jobs in America.
In a recent webinar hosted by Living Cities, Jose shared how ICA’s innovative equity-driven model supports high impact, minority entrepreneurs in order to help existing businesses grow and generate good local jobs for the people who need them most. To increase the size and strength of this support ecosystem, ICA recently launched Fund Good Jobs—an innovative impact investment fund set up to more quickly attract and deploy capital to these businesses.
We recently sat down with Jose Corona and Sean Murphy, the new President & Managing Director of Fund Good Jobs, to learn more about the context from which the fund grew and the lessons we can learn from its creation. This is the first of a three part series highlighting our conversation.
Can you give an overview of ICA and the context from which Fund Good Jobs evolved?
Creating good jobs, especially for those who need them the most, has always been the foundation of ICA’s work. We do this by delivering high quality services including expert consulting, education and investment to existing small business owners in order to grow their businesses. Through our partnership with Mills College Business School, we have been able to support a broad range of entrepreneurs through many educational offerings. This partnership has also served as a direct pipeline to funnel companies into the management consulting program at ICA.
Over the years, we learned that ICA’s advising and education work really helped our companies’ businesses grow, but that these services alone were not sufficient. Companies still needed capital to grow, yet the amount and type of capital available to good small businesses is elusive.
What challenge does Fund Good Jobs seek to address?
Banking institutions and other investors aren’t readily investing in high need, high growth small businesses. Fund Good Jobs was created to address this challenge that good small companies face in getting capital. ICA recognized that investors and bankers need people who can walk in the shoes of the entrepreneurs and who are willing to take the extra time needed to assess their character and commitment. Given our already successful track record of doing this, ICA recognized its potential role as a conduit between job creators, investors and the local community. Fund Good Jobs was born as an ICA partner to provide high growth small businesses with capital they need to scale up and maximize good job creation.
How does Fund Good Jobs work and what is ICA’s role?
Fund Good Jobs partners with mission-aligned banks and investors to invest in ICA’s Portfolio Companies with blended capital ranging from $100K to $2MM. Each investment is made in partnership with ICA’s suite of services, so that entrepreneurs are offered a “one-stop shop” for all capital and other business needs.
Structured entirely as a philanthropic venture, the goal of the fund is to secure more capital that goes directly back into ICA to support our mission. As such, our return is first and foremost tied to the creation of good jobs throughout the Bay Area. The relationship between Fund Good Jobs and ICA is thereby critical—the investment capital needs to be leveraged with operational support for Fund Good Jobs and ICA in order to be successful.
_Bets Edasery is a former intern with the Collaborative Change team at Living Cities and is currently an Analyst at _ TCC Group _ -a leading social sector consulting firm specializing in Strategy, Evaluation, and Capacity Building for Corporate, Philanthropic & Nonprofit Organizations._