Mobilising Impact Finance for BIPOC Entrepreneurs

The situation

In the autumn of 2019 we convened a group of people running BIPOC-owned and led loan funds, equity funds, real estate funds and entrepreneur support organisations across the United States, and asked one question: there is an abundance of people working on racial inequity in US capital markets — what do you share, and what would let you work together?

Three answers came back. Capital was hard to attract into BIPOC-owned and led funds and projects. Affordable legal, operational and technical resources did not exist at the scale any single organisation could afford. And there was no shared infrastructure for explaining to investors, policymakers and entrepreneurs what the risks and rewards actually are when capital moves into underserved communities.

Connection between these organisations was already strong. It was also entirely informal, and informal connection cannot underwrite a loan.

What ran

We ran a structured design process towards a national network by and for BIPOC capital entrepreneurs, with a timeline and agreed outcomes.

Then the planning period collided with 2020. The murder of George Floyd, the movement that followed, the pandemic, and the economic collapse behind it. The people at the centre of this work were among the most affected, and became frontline responders for their own communities while the design process was running.

That required us to hold a structure and let go of it at the same time — participants working from home, with children out of school, during a period of real upheaval. Any systems work oriented towards justice ends up balancing structure against emergence. This is the clearest example we have of the cost of getting that balance wrong in either direction.

What it produced

The engagement delivered an organisational strategy and an advisory committee to steward the ICC towards becoming an independent, cooperatively owned and governed entity.

In the window between that work concluding and Zebras Unite hiring an ICC programme manager, the advisory committee disbanded. Its members were called back to the immediate needs of their own constituents. The ICC was subsequently established as an incubated programme of Zebras Unite, and our role moved from systems design to infrastructure design.

What we designed for that shared infrastructure to carry: a shared loan loss reserve to de-risk lending to members; shared technical assistance so entrepreneurs can submit viable applications faster; shared due diligence between members to shorten approvals; and a character-based lending programme, because credit scores and collateral are the wrong test for a borrower who has neither and can still service a loan.

We designed them. Implementing them sits with the ICC, and we do not report on their status here, because it is not ours to report.

What it shows

This is where we developed the Community Capital Collective process we now use to design context-specific interventions in impact finance. It is also the deployment that most clearly shows the limit of design work: a structure agreed in a room does not survive contact with a year like 2020 unless someone is resourced to hold it. The ICC survived by finding a host. That is a real answer, and it is not the one we planned.