Author: Casey Bell, PCV Chief Impact Officer
Pacific Community Ventures (PCV) envisions a world where every entrepreneur and worker has the freedom and capacity to build intergenerational wealth through a good job. We believe that Community Development Financial Institutions (CDFIs) overcome barriers to wealth building in historically underestimated communities by deploying restorative capital. We seek to create conditions to address the market failures that perpetuate the racial wealth gap so that all entrepreneurs have the same opportunities.
That is why, as PCVs first Chief Impact Officer, I am proud to announce the launch of our Good Jobs Innovation Lab. Our Lab is a pioneering applied research incubator charged with cultivating and driving innovative product, programmatic and policy change to realize our ambitious vision. Together with our small business owner “co-researchers” and community organization partners across the country, we are embarking on a field-building research agenda that leverages data analytics, behavioral economics, and the perspectives of small business owners and employees to radically re-examine capital structures, product delivery and technical assistance interventions to address barriers to scaling good jobs in the small business ecosystem. Moreover, our roots as one of the first impact investors in the U.S. empower us to set impact underwriting and measurement standards for tracking clear and measurable results.
PCV has long been an active voice for Good Jobs for small businesses, leveraging our research to launch a first-of-its-kind Good Jobs Toolkit for entrepreneurs.
In 2019, Bulbul Gupta joined PCV as its new CEO and grounded the organization in its commitment to racial equity. The launch of the Lab is the culmination of a two-year strategy and pilot that provided $2.5 million in no fee, zero interest loans to entrepreneurs of color in Oakland through 2022; created and sustained 1,068 jobs; and plans to deploy $209,110 in Good Jobs rebates at the time of this writing. Pilot Lab support using advanced data analytics to overlay redlining maps with LMI census tracts facilitated our success intentionally reaching communities we set out to serve.
Our updated theory of change, stewarded by the Lab, articulates a clear strategy for our impact-investing CDFI to achieve its short and long-term objectives for co-creating a more just and equitable economy along with our partners. Here are 4 reasons we are pursuing this critical work:
- Small businesses are critical infrastructure within our economy.
Small businesses facilitate ownership in historically underestimated communities while serving as culture keepers. They provide essential services like childcare, home maintenance, personal care, and professional services. Small businesses are also invaluable incubators for groundbreaking innovation that our economy cannot compete without.
Yet, the market fails to sufficiently support the resiliency and wellbeing of small business owners, their workers and their families through good quality jobs. The predominant Good Jobs narrative often dismisses them, particularly entrepreneurs of color, as “too hard to reach,” and too readily accepts scarcity in wealth building opportunities.
- Good Jobs created through entrepreneurship are critical tools for closing the racial wealth gap.
89% of new businesses opening every day are led by women of color. Yet 75% of female-identifying BIPOC entrepreneurs report access to capital and resources as their biggest barrier to creating good jobs and building wealth for themselves and their workers. Compelling evidence attributes this stunning gap in access to the historic practice of redlining and the systemic exclusion of people of color from the banking system – and if left unchecked, it could cost the economy $1 trillion a year by 2028.
Our products – restorative capital paired with culturally competent, trauma-informed advising – are capable of creating conditions for entrepreneurs of color to sustain levels of income that are needed to expand job quality in their businesses. Our approach intentionally supports entrepreneurs building growth capital and runway for their businesses and their workers to stabilize and thrive – rather than survive paycheck to paycheck at subsistence levels.
- Good Jobs Journeys may look different for small and micro-businesses, but we cannot afford to exclude them from wealth building.
The COVID-19 pandemic laid bare how the tradeoffs entrepreneurs face between pursuing opportunities and sustaining resilient financial health pose systemic risks to our overall economic well-being. Our economy relies on both a creative, skilled workforce in target growth industries AND a healthy small business ecosystem supplying essential, critical and place-building services to thrive.
Ideally, small business owners would adopt all good job attributes at once. Realistically, resource constraints and structural limitations prevent them from doing so. The Lab will engage in actively listening to small business owners to better understand the barriers they face and the support they need to create jobs – as well as to their employees to identify the good job attributes that workers from different small and micro enterprises most prioritize. Through this research, the Lab seeks to uncover “good jobs gateways” – the behavioral nudges from CDFIs and policymakers that have the greatest impact on advancing mobility, balanced against factors including geography, maturity of business, industry and cultural context.
- As a CDFI, our capital should be the most accessible tool for correcting market failures in restorative ways congruent with the Civil Rights origin of our field.
CDFIs’ roots are deeply entwined with the Civil Rights movement. We exist to combat restrictive and historically extractive lending practices that inhibit upward mobility in economically-distressed communities and perpetuate cycles of poverty. To stay true to this mission, we need to be intentional in how we structure and deploy our capital to maximize impact, and deliberate in how we track and report our progress in meeting the needs of the communities we set out to serve.
We are excited to launch this learning agenda, and look forward to a shared journey with our colleagues and partners toward a more just and inclusive economy.