How Baltimore’s Philanthropists are Collaborating to Grow Small Business
When James Wahls came to the Annie E. Casey Foundation in Baltimore, Md., three years ago, he wanted to replicate an effort he helped design at the Kellogg Foundation in Detroit, that is, supporting entrepreneurs of color in the city to start small businesses.
The Detroit’s Entrepreneurs of Color Fund was able to triple in value from $6 million to more than $18 million in just a couple of years, creating even a greater ripple effect throughout the city. But Wahls, senior investment analyst with the Annie E. Casey Foundation’s social investments team, found that in Baltimore, the existing community development financial institutions, or CDFIs, didn’t have the capacity to take in investment capital to deploy to potential small business owners.
If a CDFI “has a loan portfolio of $2 million, you can’t as an investor infuse $3 million to $5 million into an institution that may not be ready to take on that much capital and deploy it into a community,” Wahls says.
But the foundation’s investment team wasn’t alone in trying to tackle this issue. Others, including the Abell Foundation, the Baltimore Community Foundation, and [Maryland Philanthropy Network], as well as banks, including J.P. Morgan Chase and Goldman Sachs, “were looking at the same issues and coming to the same conclusions,” Wahls says.
Source: Barron's Penta