Last month, Google announced a $3 million grant to the Hispanics in Philanthropy’s PowerUp Fund — a program created to support Latinx-owned small businesses across California, New York, and Texas.
Hispanics in Philanthropy started this project long before the coronavirus pandemic began. Before the economic consequences of COVID-19 in the U.S., access to capital at reasonable rates to start a small business was particularly difficult for black and brown communities.
Beyond its financial aspect, Latinx people lacked the social capital needed to start their own business. Most of them did not have generational networks, strong bank relations, or even trusted financial institutions. Discriminatory lending practices also placed them at a disadvantage.
Despite all the obstacles, Latinx people continued to open small businesses, many of which were thriving. “It was starting on its own to make a difference in terms of wage and wealth gaps in this country…and then all of a sudden, COVID,” said Nancy Santiago, Vice President of Hispanics in Philanthropy.
A 2018 study from Stanford University found that Latinx-owned businesses contributed about $500 billion to the economy in annual sales. They accounted for about 4% of U.S. business revenues and 5.5% of U.S. employment.
“We at Google, and myself included as a Latino, know that Latino-owned small businesses are part of the economic backbone of this country. I think a lot about my family. I have members of my family — my uncle, my grandma, different people across my extended family — who are small business owners…and they are in a very difficult position right now,” said Hector Mujica of Google.org.
With COVID-19, the opportunity gap is more evident than ever before. None of these systemic problems have changed. They have only become harder for Latinx small business owners to navigate.
“The impact of that and the ramifications of everything from the ability to send their kids to college to put food on the table to pay for a mortgage…the ripple effects will be felt for decades, quite honestly,” assured Santiago.
This $3 million grant from Google will help HIP, in partnership with Ureeka, to start the work to provide the Latinx community with a fighting chance — whether that means training and mentorship, financial support, or social capital.