Corporate spending on federal lobbying has surged since 2016, and most reports suggest 2020 almost set an all-time record despite the pandemic. That spend has included the checks Big Tech have continued to cut, which is not surprising considering the news even before last week’s whistleblower’s testimony in Congress. We’re seeing the impact of lobbying now as it surrounds the economic plan currently under discussion on Capitol Hill. Messaging has even crossed the line to gaslighting, as spending on lobbying efforts has come with accusations that such a fiscal plan would have made the pandemic even worse.
“With the help of lobbyists, businesses are trying to secure the biggest piece possible of the relief pie,” Fumika Mizuno wrote last summer. “The problem, however, is that lawmakers should be listening to the voices of their constituents, not corporations with close ties to the government.”
Among those constituents are those who have almost no opportunity to secure what they need for their businesses through lobbying are the Black and Latina women who have struggled to keep their businesses afloat. Despite the fact women of color keep launching companies at an impressive pace, research has shown time and again that the amount of capital they score pales compared to their white and male counterparts.
A new report from Digital Undivided underscores the reality that women of color entrepreneurs keep facing.
Let’s start with the more positive news: It hasn’t been all bad. A majority of founders who Digital Divided interviewed found opportunities during the crisis. The pandemic motivated them to do whatever they could to grow their businesses, and many women said the rewards of entrepreneurship have still been a motivating force.
But the news shouldn’t be considered all good, either. Far from it. Sure, many of these women who participated in the Digital Divided survey said they persevered and got through it. But of course they persevered and persisted: They really had no other choice as funding to keep their businesses humming along was difficult to find.
At least 80 percent of the women surveyed said additional funding would help them grow their businesses, whether they were in health and wellness, beauty, apparel or education – the four largest sectors that combined represented almost half of the companies led by the founders who were a part of the Digital Divided report. True, less than 10 percent of them said that government-mandated closures during the pandemic had an adverse effect on their companies, as many were able to pivot and pitch their products and services online.
Nevertheless, the sting from the struggle to attain capital has been evident. “We’re reading headlines of annual record highs of VC funding, while our dry powder continues to thin. It’s exhausting, to say the least, since these headlines often don’t take into account *who* the funding is going to,” one business owner told Digital Divided.
Many news outlets, including TriplePundit, reported during the pandemic about the struggles people of color confronted in scoring funds from the government and banks. Digital Divided’s numbers suggested that discrepancy had continued over the past 18 months. While 38 percent of the women surveyed said they received some form of assistance from the federal of local governments, 74 percent said access to capital would have offered a lift during the crisis.
Meanwhile, almost 70 percent said their friends and family were their most critical sources of support – exceeding other resources including customers, entrepreneurial organizations and even their own professional networks. While there was little sentiment that they were the “last in line” to receive assistance such as federal PPP loans, it is clear banks and government agencies were not a reliable source of support.
The bottom line is that women of color in business face similar challenges that job seekers run into: Those responsible for hiring employees, or loaning capital, tend to hire or provide funding for people who look like them.
So, what is the solution? Among the recommendations Digital Divided suggest include increased funding, of course; targeted programs for small, women-owned and people of color-owned companies; up-skilling and re-skilling initiatives; and finally, programs that address health and wellness in Black and Latino communities, ones in which more women of color are founding businesses in this sector - yet they have a large mountain to climb as these same communities have endured the harshest impacts during this public health crisis.
Fair access to political leaders that does not hinge on the size of checks that are drawn would offer a start, too.
Image credit: Brandy Kennedy via Unsplash
Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.
Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.