Louisville Urban League, Inc.

In an 18-day period following the murder by police of beloved restauranteur David McAtee, a group of 50+ Black-led organizations, convened by the Louisville Urban League (LUL), co-authored a historic document called A Path Forward for Louisville. With protests already spilling into the streets over the killing of Breonna Taylor, Mr. McAtee’s death felt like a kick in the teeth to a community already on our knees. This pain was channeled in part into a document that described the specific investments and actions needed to right historic and present-day wrongs experienced by Louisville’s Black community. Chief among the demands was the call for the creation of a business ecosystem that, with the proper investment, could build a marketplace as diverse as our population.

Since that time, Black-led organizations have come together to design and begin to implement just such a system. The collective effort aims to remove all the barriers that have historically plagued Black businesses - that includes access to 1-1 business coaching, credit repair, free professional services (i.e. paying for accountants, lawyers, marketers, etc.), business barrier removal funds, mental health coaching, education, training, loan preparation and introductions to banks, access to loan guarantee and collateral fund pools, and access to capital. These services are being developed and deployed by a series of organizations with the Louisville Urban League’s newly launched Center for Entrepreneurship serving as the front door of this ecosystem.

In Breonna Taylor’s hometown of Louisville, KY, the scale and intensity of the civil unrest experienced in 2020 was unlike anything the city had experienced in decades. Community leaders and activists were focused not only on the deaths of Ms. Taylor and Mr. McAtee, but on the decades of redlining and racist policies that have led Louisville to be named America’s fourth most segregated city. The economic realities of that segregation are striking. Black Louisvillians make less than their white counterparts in every industry. There is an estimated 13:1 wealth gap between white and Black Louisvillians. Pre-pandemic, just 2.4% of businesses were Black-owned although the city is 24% Black. Among the Black businesses we do have, they are more economically fragile - average revenues for white-owned employer businesses are 300% higher than they are for Black-owned employer businesses and 40% of Black-owned businesses rely on predatory lending in Louisville. 

A culturally-competent, well-resourced, enduring ecosystem has not been in place in Louisville to help Black businesses combat these realities. The Path Forward partners, conveyed by the Urban League, are filling this void in hopes of dramatically reshaping Louisville’s small business marketplace. As a convener, the League is helping to knit together often disparate pieces of business support. In addition, the League’s Center for Entrepreneurship is specifically focused on providing the 1-1 coaching, credit repair, and access to free professional services that have historically been barriers to businesses accessing funding.

Our solution directly aligns with the challenge and the first and last dimensions identified in this application. Operating in the fourth most segregated city in America where white residents have 13 times more wealth than Black residents, there is a social and economic imperative to help Black businesses start-up, stabilize, and scale. Through the Path Forward coalition, the Louisville Urban League and its nonprofit partners are creating a culturally competent and coordinated small business ecosystem. Our three key focus areas in the ecosystem are: 

1. Deep technical assistance
2. A comprehensive incubator experience 
3. Access to capital

Where solutions exist, we are providing capacity building support to strengthen them - such as raising funds to hire a full-time manager for the business incubator we partner with, or consulting with our locally-headquartered community development financial institute to design a pandemic relief funding program that blends loan and grant dollars with financial coaching. Where significant gaps remained in the form of deep technical assistance, the League has stepped in to fill these ourselves. Our Center for Entrepreneurship is providing 1-1 coaching including comprehensive assessments and customized action plans, financial coaching with a focus on fiscal management for sustainability, credit repair, and free professional services - connecting clients to largely Black-owned lawyers, marketers, accountants, HR professionals, and more. While much remains to be done across all the focus areas, we believe the foundation we are laying and blueprints we are designing are comprehensive enough to right generational wrongs in this city. 

Our solution serves Black businesses owners focused on starting-up, stabilizing, and scaling. Through the Path Forward, seasoned Black business owners came together with Black tech entrepreneurs, Black business coaches and microfinance experts, former bankers and economic developers, community organizers, and residents of Louisville’s predominantly Black west end of town where the League and our key incubator partner are both located. Together, we designed an ecosystem for a community that we embody, a community we are a part of, a community we have seen suffer. The League’s Director for the Center for Entrepreneurship was selected to serve on Louisville Metro Government’s committee to allocate grant funding for businesses seeking COVID relief funds.  In a three-month period, she reviewed financials and applications for more than 900 businesses. She saw Black business owner after Black business owner turned down because they lacked the financial records to prove their losses. Unable to accept these systemic realities, she, like others in our coalition, doubled down on efforts to create solutions to change Louisville’s marketplace. 

And change, indeed is, is needed. Louisville’s statistics for non-employer small businesses mirror the national numbers - 80% of small businesses are non-employer businesses. Here, 80% of these Black business owners have annual sales/receipts of $25,000 or less. As previously noted, Black employer businesses have 300% lower average revenues than white-owned businesses, and they are 2.5 times more likely to rely  on predatory lenders for funding than white-owned businesses. Businesses in predominantly white-neighborhoods received 36% more loans per capita in the first wave of PPP funding than those in predominantly Black neighborhoods. Our integrated suite of services are designed to address the barriers that have left Black businesses underrepresented, undercapitalized, and fragile. 

Kentucky

The League’s mission is to assist African Americans and other marginalized populations in attaining social and economic equality through direct services and advocacy. Our integrated pillars of Jobs, Justice, Education, Health, and Housing direct us to focus on the whole person, and the whole community. Our jobs pillar has historically served job seekers through the Center for Workforce Development. We have expanded this pillar to assist job creators through the launch of the Center for Entrepreneurship. This focus on small businesses is a logical extension of our mission-centered call to help African Americans attain economic equality. The staff we have hired to run the Center bring collective experiences in microfinance, business coaching, community banking, accounting, and financial coaching.

We are designing an ecosystem capable of producing two long-term outcomes: 

1. Thriving Black Business: meaning an increase in the number of Black-owned businesses and especially Black-owned employer businesses and increased revenues among those businesses 

2. Parity: meaning eventual population parity between the proportion of Black-owned businesses and the Black population in Louisville. Our stakeholders feel strongly that we must focus on bold outcomes if we are to truly transform a chronically segregated city in acute pain.

To achieve these outcomes, our ecosystem includes: 

1. Deep technical assistance

2. A comprehensive incubator experience

3. Access to capital. 

We have identified activities, outputs, and outcomes for each pillar. The League’s Center for Entrepreneurship is the largest service provider in the TA pillar. The Center’s activities can be summarized as:

1. Business hygiene coaching  (e.g., complete business assessments and customized action planning, procurement of licenses, registration, tax IDs, business bank accounts) 

2. Financial coaching (e.g., revenue stream assessment and expense projections) 

3. Credit repair (e.g. 1-1 counseling for personal credit challenges that inhibit business borrowing) 

4. Connections to free professional service providers (e.g.  accountants, tax professionals, lawyers, marketing firms). 

The six outputs that we are tracking for these activities include 1) # of individual inquiries; 2) # of individual clients (who meet  for a coaching session); 3) # of employer business served; 4) # of non-employer businesses served; 5) # of hours and types of technical assistance provided (i.e. coaching hours, financial coaching hours, credit repair coaching); 6) # of businesses receiving professional services and $ value of those services.

The five short-term outcomes we are focused on are: 1) # of new businesses started (meaning legally incorporated, registered, and earning revenue); 2) #  increase in credit scores; 3) $ increase in revenue among existing businesses; 4) of new jobs created and average wage of new jobs  and 5) # of jobs retained and average wages of retained jobs. Data collection protocols and software are in place to capture this information from clients.

The League launched the Center for Entrepreneurship in January  of 2022. Without issuing a press release or holding a press conference, we enrolled 132 current and aspiring Black entrepreneurs in our Center in our first 4 months of existence. We estimate that we will serve 250 clients in year one and as many as 500 annually in year five. Estimates of total current or aspiring entrepreneurs served over our first five year period total 1,500.

The community we are serving is Black entrepreneurs looking to start-up, stabilize, and scale. The organizations leading this ecosystem work, including LUL, are influencers of the organizational strategy impacting this community. We advocate with and on behalf of Black Louisville, and in the business realm, this means raising money from local government, philanthropists, foundations, and corporations. It means impacting the policy and practices of community development financial institutions, traditional banks, and investors. It requires us to engage in the built environment with developers and real estate professionals who create places in which businesses can locate. It means being in relationship with grassroots influencers in the business marketplace, and supporting efforts to encourage the broader community to buy from Black-owned businesses (in both a retail and supplier diversity context).

Our ecosystem work is based entirely in community-based and place-based solutions. The Path Forward initiative is a Louisville-specific, community-based collaborative, one that brought together non-profit leaders, business leaders, faith-based leaders, Black fraternities and sororities to chart out a Path Forward for Black Louisville. At its core, the Path work is the work of equity and racial healing, targeting specifically, Black people, in Louisville. We set out on this path because Black people have been intentionally and systemically locked out for far too long, and we can no longer afford to trust those in positions of power and privilege to do what is necessary to correct course. We are the impacted community, so we should lead this work, and we will do everything in our power to keep the most marginalized among us at the center of what we do. Collectively, the organizations who co-authored this document serve, pastor over, and engage with well over 10,000 Black Louisvillians each week. These meaningful relationships and interactions keep us entirely connected to the community we serve, their needs, hopes, and dreams. 

Our own leadership embodies proximate-leadership. The League’s President & CEO, Sadiqa Reynolds, is a Black woman from the South Bronx. Her father went to jail for 18 years. She moved across cities and states to escape violence.  Her mother committed suicide when Sadiqa graduated from law  school. Against all odds, Sadiqa became the first Black woman to clerk for a Kentucky Supreme Court Justice and the first Black woman to serve as Inspector General for the Commonwealth of Kentucky. She served as the Chief of Community Building for the current Louisville Mayor’s administration before becoming the first female CEO in the Louisville Urban League’s history. She has spoken locally, regionally, nationally, and internationally on media outlets ranging from the BBC News, to MSNBC, Fox News, NPR, the New York Times, the Washington Post, and more. She is beloved by so many in Louisville, and particularly Black Louisville, because  she brings her life experiences into every room she is in, rather than checking them at the door. With Sadiqa at the helm and so many similarly proximate leaders around her, we have charted a Path Forward in such a way that directly responds to the challenges and opportunities that exist in Louisville. This is not theoretical work; this is our lives. 

The Louisville Urban League builds trust by delivering results. People come to the League because their lives change when they do. They get jobs. They get their criminal records expunged. Their children’s grades improve, and they earn scholarships. Their rents get paid, and families buy homes. This track record of providing real value has organically extended into the small business realm. We have launched our Center for Entrepreneurship on a firm foundation, fully understanding the resources, staffing, and infrastructure needed to consistently deliver for clients. Word of mouth continues to be our largest source of referrals as a result. We were prompted to launch the center because we received more than 200 calls in a 7 month period from entrepreneurs asking the League for help. At the time, the League was not offering small business support, and this League had never offered it. And yet, people came.

Our impact goals for this work are two-fold as 1) we endeavor to support the ecosystem itself and 2) sustain the work of the Center for Entrepreneurship as the front door to that system. 

As it relates to the first, we aim for a cohesive ecosystem where four to six organizations each offer meaningful, non-duplicative services in ways that can be clearly explained to clients looking for support along their business journey. We hold working group sessions and are receiving support from the Bridgespan Group to define activities, outputs, and outcomes for each partner in our ecosystem. To the extent possible, as the lead convener of the Path Forward, the League intends to continue to raise funds to support our partners. 

For the Center for Entrepreneurship, our goals are to coach businesses to produce clearly defined and financially feasible business models that are legally registered, incorporated, and paying taxes; to achieve repaired personal credit that enables business borrowing, and to regularly use professional services that enable financial decision-making, sound legal foundations, relevant online presence, and more. With a goal of impacting population level statistics, we must build a funnel to our ecosystem that is as wide as possible at the top. We have modeled our staffing around the expectation that we will receive upwards of 400 inquiries a year with approximately 70% of them becoming clients. We expect half of those clients to achieve a milestone that meaningfully helps their businesses start, stabilize, or scale.

As has been previously shared, the Path Forward co-authors generally and leadership with the League specifically can aptly be described as proximate leaders. We are the community we serve. We are engaged in the community not just theoretically but in a visceral sense. We live, work, and worship with and among the community we serve. Our commitment to this work is a fight for the community, but it is a fight for ourselves. For investments in us, for a lasting place at the table for us. The sea change that has taken place in Louisville is that we have determined that we must be the ones to articulate the path forward, to develop and implement solutions that serve the community we know best, and to call for those with power and privilege to live out their allieship by investing in these efforts.

We are applying to the Truist Foundation because we are looking for expertise and consulting advice regarding our ecosystem building, and we are looking for funding for the Center for Entrepreneurship. From the ecosystem perspective, we could significantly benefit from working with other communities/advisors who have existing ecosystems in place so that we can identify any missing elements of our system and/or provide expertise to the operating strategy and approaches of the partners that already exist locally. As noted, we are looking for particular expertise in creating a Black Business Fund that has the financial ability to sustain itself, at least in part, through interest and investment income. We are also looking for best practices on client and data sharing across partner organizations - the kinds of tactical approaches that engender collaboration and not competition. 

As we shared previously, we believe we have a short amount of time to demonstrate outsized results if we are to convince the historical power players in Louisville that there is sustained value in investing in Black-led efforts to help Black businesses. We are looking for expert advice, the best we can access in the United States or beyond, to help us design an ecosystem capable of doing that. We do not simply want to be “good enough for Louisville.” We want to be among the best in the country in the caliber of design of the existing ecosystem elements and the quality of the technical assistance we provide. We want this to translate to business owners who can feel the difference - who feel it in their revenues, who feel it in a sense of calm that comes from understanding and being able to proactively manage one’s business. We believe that the Inspire partners can push us to higher levels of excellence, and we know we can translate that into changed lives in Louisville, Kentucky.

We are looking for support in three areas and would appreciate partnerships with the following: 

1. Determining capital/fund strategies - 1863 Ventures. 

2. Providing entrepreneurial support/partnership building/impact narratives - Natalie Self -Senior Vice President, Equitable Economic Impact, Cortex Innovation Community; Ken Miles Founder, Intent Partners 

3. Ecosystem building - Anika Horn https://www.anikahorn.com/.

We are also very open to having Inspire recommend partners who can help us in these particular areas. We believe that, in working with the team in Louisville, you will find a deeply connected, deeply committed group who has the intellect and bandwidth to soak up all the best practices we can access. We would be honored to be selected for this opportunity.