Houston equity fund gets $20 million contribution
Wells Fargo gift will help minority firms and nonprofits
“Small businesses play an important role in the Houston economy, and it is a benefit for our city to provide every tool needed to help them succeed.”
Mayor Sylvester Turner
Wells Fargo, one of the nation’s biggest banks, said Thursday it will donate $20 million to a Houston fund that assists minority-owned small businesses and nonprofits.
It is by far the largest donation received by the Houston Fund for Social Justice and Economic Equity, which was launched by city leaders amid national calls to combat systemic racism in the wake of George Floyd’s 2020 murder by police.
Fund leaders said the donation will finance grants that they estimate will help more than 500 local small businesses purchase property and equipment, and support economic development in minority communities that have suffered during the COVID-19 pandemic and related economic fallout.
Mayor Sylvester Turner praised the contribution at a Thursday news conference, saying it will “allow small business owners to innovate, expand, and evolve in a way that improves their investments while also maintaining our reputation as a great place for economic development and company growth.”
“Small businesses play an important role in the Houston economy, and it is a benefit for our city to provide every tool needed to help them succeed,” said Turner.
The money comes from Wells Fargo’s Open for Business Fund, a $420 million program that the banking giant finances with the money it made processing roughly 282,000 applications for the Paycheck Protection Program, the federal pandemic relief program that gave millions of businesses forgivable loans to retain staff, cover expenses and stay open.
So far, the San Franciscobased bank said, about 85 percent of businesses that received
help from the Open for Business Fund have been minority-owned groups, which Wells Fargo CEO Charlie Scharf said are a “priority.”
“Fostering an inclusive economic recovery and helping small businesses sustain themselves and grow in the wake of COVID-19 is a priority for us,” Scharf said. “As a company, we have a commitment to make the communities where we operate stronger, and to do it at a very local level.”
Minority-owned businesses were hit particularly hard by the pandemic. A 2020 study by the Federal Reserve Bank of New York found roughly 41 percent of Black businesses closed during the first months of the pandemic, the highest rate of any racial or ethnic group.
Black business owners were also far more likely to use personal funds to stay afloat during the pandemic, another Fed study found, and were five times more likely than white business owners to say they were denied loans under the PPP.
Recent surveys conducted by H&R Block also found about 53 percent of Black business owners lost at least half of their revenue since the beginning of the pandemic, compared to 37 percent of white business owners.
Minority-led nonprofits in Texas were hit similarly hard by the pandemic, with 43 percent saying they had to lay off employees because of COVID-19, compared with 28 percent of all nonprofits statewide, according to Texas A&M University researchers.