It’s no secret that our country faced unprecedented turmoil in 2020, and moving into 2021 we are only beginning to look toward rebuilding our economy. We need to make sure that the tools we use to rebuild don’t also leave people of color behind. That’s why Robert F. Smith — Founder, Chairman and CEO of Vista Equity Partners — applauded Congress for including additional funding for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) — financial institutions that often work with marginalized communities where traditional institutions have minimal engagement — along with money to address broadband deserts in their December 2020 economic stimulus legislation.
“The federal Covid relief package is vital for a number of reasons. Two I want to highlight: $12b for Community Development Financial Institutions & Minority Depository Institutions; and $7b to help close broadband deserts. These are long-term solutions to structural inequities,” Smith wrote on Twitter. “It’s important to focus on injecting capital into the economy right now and just as important to redress the structural economic roadblocks we face. Great progress for Black and brown communities.”
Smith has first-hand experience with the inequitable fashion in which aid can be distributed. Over last summer when Congress passed the first relief packages, Smith noticed inequities. He saw that Black-owned businesses weren’t able to secure Paycheck Protection Program (PPP) funding because the economic institutions they work with weren’t able to process the applications as quickly as other banks. These favored institutions have historically shut out Black entrepreneurs. Smith worked with Congress to ensure that a provision was included so Black-owned businesses had the same access to necessary capital as white-owned businesses.
The federal funding this summer was an example of what happens when equity isn’t placed at the heart of legislative development. Our society historically discriminated against and left behind people of color, putting them at a disadvantage in building economic wealth across generations. Intentionally including provisions like funding for CDFIs and MDIs as well as closing broadband gaps is crucial to ensuring that we don’t make the mistakes of our past, and will give every person in this country a more equal shot at building economic power.
To learn more about the barriers in the way of marginalized communities to build economic power and the efforts Smith has taken to close the gaps, read more here.
