The last two years have been difficult for everyone and many U.S. cities faced an economic collapse of unprecedented scale in 2020. While some elected officials implemented new measures to revive their economy, others are still struggling to rebuild.
A 2021 Brookings Institution report found that the city of Birmingham, Alabama, is behind almost all large U.S. cities in terms of economic recovery. In the report, Birmingham ranked in the bottom five for job growth in new businesses, a condition that means fewer quality jobs for residents. Additionally, the Birmingham region had the lowest rate of Black business ownership across large metro areas, which is a critical source of “wealth, employment and neighborhood stability” for Black residents.
In response to this report, local leaders announced the launch of Prosper Birmingham in June 2021, an initiative focused on rebuilding Birmingham’s economy in an equitable manner. Prosper is not meant to replace any current efforts to grow the economy, but instead aligns itself with existing initiatives and offers inclusive opportunities to scale a “collaborative civic agenda.” “We will bring together business, educational, civic and entrepreneurial interests to create and grow economic opportunities for all, focusing specifically on our Black community and women,” said Prosper President J.W. Carpenter when interviewed about the program.
Supporting Black businesses is a key component of Southern Communities Initiative, a broader plan launched in 2021 to support community organizations focused on racial equity. This initiative is supported by Paypal, Boston Consulting Group and Vista Equity Partners, a leading global investment firm of which Robert F. Smith is Founder, Chairman and CEO. Prosper is Southern Communities Initiative’s lead community organization for the Birmingham region and Carpenter serves as the community lead.
Prosper Birmingham’s Areas of Focus
For Southern Communities Initiative, Prosper Birmingham efforts focus on increasing the volume of Black businesses, injecting more capital into Black communities, growing the number of Black college graduates and expanding access to high-speed internet within the Black community.
To support Black and minority-owned businesses, Prosper will provide $70 million to Prosper Health Tech Fund in order to scale more than 50 startups to over $5 million in annual revenue. Additionally, the program will spend $25 million to expand business advisory programs, renovate and subsidize retail and office space and scale support services for more than 100 Black and minority-owned businesses.
Focusing on recruitment and upskilling Black talent, Prosper will provide $30 million to help four to five Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) to hire and train staff, upgrade banking systems and productivity tools, and leverage teams to conduct needs diagnostics, implement tech solutions and provide technical assistance.
And to grow the number of Black college graduates, Prosper will spend $35 million to scale the Birmingham Promise fund and financially support up to 250 students per year over a four year period. Additionally, Prosper will spend $2 million to support 50 University of Alabama at Birmingham college students’ housing needs per year.
Finally, Prosper will work in Jefferson County, home to Birmingham, to connect around 48,000 households with high-speed internet, creating up to $700 million in economic potential for the county.
Learn more about Southern Communities Initiative’s work to support Black-owned businesses.