Nearly two decades ago, I founded the Year Up expansion site in the DC area. Year Up helps young people who have experienced barriers to academic and professional careers. Whenever I raised money for Year Up, I often felt like large donors needed proof that our students were “adequately disadvantaged” to inspire them to give. Even before the concept of a deficit mindset was popularized, I rejected the fundraising requirement of parading our talented youth in front of others to share their lowest and most personal experiences in order to prove they were needy enough to deserve additional support. Instead, I stood in their stead and shared my own stories.
On paper I was objectively successful, with the professional and academic pedigree that gave people confidence that I would and should succeed. Personally, I had more in common with my students and understood all too well the slippery slope between investment (asset-driven) and charity (deficit-driven). Since my post secondary outcomes were already written, I decided to use my personal past as the story I shared while elevating the unwritten possibility of our talented young people whenever I spoke to donors. As a result, I constantly re-lived all the ways I was personally disadvantaged.
As I went from event to event and boardroom to boardroom talking about our young people, their stories and my own became enmeshed in my mind. Their stories were (and are) my own. I grew up with a wonderful, supportive family, but as a young, Black, Japanese woman, the disadvantages I faced were baked into the system I lived in. I was the first in my immediate family to go to college and business school. I was the first to shift to full time, long term entrepreneurship. I was the first to write a book (now 2). Everytime I did something, I was doing it with the full emotional support of my family, but they were not able to give me the financial support or inside knowledge that most of my peers had.
While I was fundraising for Year Up, my story and the story of our amazing young people was on display. I had to make the case that our youth deserved investment, not because they were charity cases but their opportunities were all too often snuffed out by systemic forces outside of their control. The philanthropists I frequently connected with were not a monolith and several had generational “bootstraps” stories. And, of course, there are socioeconomic barriers regardless of race, ethnicity and/or gender. But while true, the tough truth is that even when controlled for economics, education, and other factors that serve as a down payment on wealth, there have been enough systemic impediments embedded in our young democracy that continue to suppress opportunity.
Unfortunately, proving who has been harmed by the system and who has benefited from it has become more burdensome. The Small Business Administration (SBA) recently had to change their policies for supporting disadvantaged businesses thanks to a lawsuit that determined the SBA could not presume a business owner was “disadvantaged” because of the membership in one group, such as being Black or gay or Hispanic. Instead, the SBA needed to require applicants to prove they had been disadvantaged through evidence before receiving assistance through a program called the 8(a) Business Development Program.
This seems like a wonky issue — who cares if someone needs to file one more form? — but speaks to the pernicious nature of systemic racism. By placing the burden of proof onto the individual, the SBA has been forced to ignore the obvious effects of systemic racism on business ownership. These include:
- Access to networks: People of color do not have access to the same networks as white people and specifically white men. If you have mentors or other successful entrepreneurs within your network, you’ll be able to start a successful business more easily.
- Lower wealth: The lack of network connections are related to lower levels of wealth, as wealth begets wealth. If you grow up wealthy you will have an easier time raising capital to start a business because you have wealthy friends and family. For those of us who did not, we cannot as easily get the checks we need. And we know that the existing racial wealth gap is a direct legacy of enslavement and the institutionalized racism that existed in this country for about 300 years.
- Higher rates of rejection when accessing capital: People invest in people who look like them. Anyone who is “different” is seen as “risky”, no matter the credentials. Because white men are massively over represented in financing and investing, this leaves women and people of color at a stark disadvantage.
These barriers are baked into the system — the individual characteristics don’t matter. You can be the top of your class as a Black man at Harvard, but that doesn’t change the racial wealth gap. You will still experience systemic disadvantages along the way, even if you cannot explicitly articulate them. The system does not care about your successes, only the color of your skin. Black men within the top 1% of income levels have the same chance of being incarcerated as a white man from a family making $36,000 a year.
The SBA now requires potential disadvantaged business owners to prove their disadvantaged status. They recommend being as specific as possible. Completing this form can force people to relive all kinds of traumas — encounters with police, mistreatment at schools, harassment or violence. It also can create a sense of unease or self-doubt: Am I really disadvantaged? Did I have it harder than others? Was that experience I had racism or sexism, or was it just bad luck?
Across our society, we are seeing a retreat back to placing the burden of proof on the individual rather than acknowledging the effects of the system. Post George Floyd, people began to understand how pernicious racism is still a part of our society. We became comfortable with terms like internalized oppression and institutional racism. Now, we are retreating back to where we were before. The Supreme Court has outlawed affirmative action and investors who support Black businesses are being forced to stop their programs. I suspect we will only see more and more of these efforts to stop the dismantling of racism.
This is especially painful because we saw the bold commitments following George Floyd’s public execution. We saw a rise in collective awareness of the many systems that continue to hold so many of us back. We saw new coalitions begin to mobilize and address the root causes of systemic racism and work to dismantle them. And now, what we see is a systematic dismantling of these efforts.
As demoralizing and triggering as this pendulum swing has been, CapEQ will continue to build tools and share resources to navigate this constantly morphing environment. Our next article in this series will be an interview with Farhana Khera, civil rights attorney and activist, on practical approaches to guard your efforts in this environment. Stay tuned!