Force Multiplier for Racial Equity?

“Imagine a monopoly game with 8 people. Then imagine 4 of the people are forced to leave the room until all the properties are purchased. Those 4 people are invited back in and asked to keep playing. How do you think they’ll do?”

“That’s what it’s like to be black.”

Geraud Staton tells a story like this during his February 2018 Equity in Entrepreneurship talk at ReCity – an innovative co-working space in Durham. Geraud leads LaunchDurham as part of his role at the Helius Foundation, where he helps necessity-driven entrepreneurs grow their businesses and give it their best shot.

To me, this feels like some of the most meaningful work we can do if we want to get serious about racial equity.

Three years ago I met Traveon Smith, Founder of LGC Security because a charter school leader told me she wanted to give him a chance to bid on the security services their school was going to need that year. I was running a purchasing cooperative in Washington DC that helped churches and schools find high-performing local service providers. That Spring one of my projects was helping eight charter schools find a more responsive and reliable security services provider. A week after we released our Request for Proposals, Traveon from LGC sent me his bid. I decided to sit down with him and tell him a bit more about what the schools and our co-op were looking for and to get a sense of his company, his experience, and why he was so eager for this opportunity.

Two minute video telling the story of Traveon’s journey building LGC Security

It turns out LGC was selected by one school that summer. Then another that Fall, and three more that Spring. By 2017, Traveon had landed more than $2 million per year in security contracts from charter schools and was about to win a bid to serve Howard University. His team had grown from 3 to more than 100 full-time staff.

The way I helped Traveon and LGC wasn’t to give them a handout, it was simply to help better understand the needs of the clients he wanted to serve. I gave him insight about how they thought about their schools and what I head learned was most important to them. Then he did the rest. He won their businesses. He’s had to work extremely hard to earn their renewals and referrals and it still isn’t easy. But now he has a business. He’s built some wealth for his family and is offering good employment for more than 100 people that look like him.

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When I think about the twenty public and private-sector leaders I’ve met with in Durham over the past few months, I’ve heard racial equity come up over and over again. But when I ask about what action they’re taking or organizing as a collective, it feels like there is less happening than we’d like.

I want to propose a locally-focused purchasing cooperative owned by and led by Durham leaders. The cooperative would be a collaboration between non-profits, faith institutions, education leaders, property owners, and our largest anchor institutions: universities, health care, and public sector. The focus of the co-op would be three-fold:

    (1) Help community institutions (i.e. churches, small business, non-profits and any others) save money and be more intentional on contracting for facilities, construction, and professional services.
    (2) Build spaces for large buyers to meet, discuss, and hear trusted peers talk about good experiences with local, minority- and women-owned firms. The purpose being to help spread the word about newer and smaller firms that are hungry to grow.
  • (3) Support entrepreneurs in coming together to hear about the landscape of upcoming projects, build trust with peers, perhaps new collaborations, and discuss shared challenges. The purpose would be to direct folks to existing resources and identify gaps.

We recognize Durham and our region is undergoing incredible growth. Construction firms consistently tell me how hungry they are for more skilled workforce.

My hope is that by building a collective vehicle that organizes more of our purchasing, we connect more of the dollars we spend with high-performing businesses owned by people of color.

In the past 4 years, I grew a buying co-op of community institutions that collaborated on utility bills and saved $100,000 to what is today a group of 75 that now shifts $16,000,000 per year and intentionally contracts together with 57% of their spend now going to minority owned businesses.

Working with Durham and other area leaders I believe we can be more intentional with our purchasing and contracting and over the course of a few years shift more than $1,000,000,000 to minority-owned firms.

My aim is to start small, begin with where we’re at today, but gradually build a vehicle for each of us to become more intentional in making our purchasing a force multiplier for change.

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