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Navigating belief capital amid dominant norms

In our work, we have encountered how entrenched funding policies influenced by dominant culture norms create obstacles for transformative ideas to receive the necessary support. Traditional funding systems favor those with existing capital, leaving diverse initiatives underfunded.


At Velo, our projects cannot be shoehorned into existing traditions; otherwise, they would already be funded. We’ve been identifying barriers and biases in our work with the goal of finding creative ways to address them.


A few examples of barriers and biases we’ve encountered to date:


Reimbursement-only grants. Most Federal Covid relief funds were intended for areas in greatest need based on income and lack of economic opportunities. However, most are reimbursement-only grants, requiring organizations to make, document and submit expenditures before receiving funds. Typically, this means that only the largest, most established nonprofits can afford to operate from reimbursement-only grants. Some cities have obligated these funds to themselves, taking the reimbursement risk in house, and then providing flexible funds to life-changing initiatives and programs.


Not to be deterred, one visionary young leader of a small grass-roots youth program put several thousand dollars of his own funds into his nonprofit’s bank account so the organization could afford to provide services in an ARP-funded program and wait for later reimbursement. A similarly entrepreneurial young creator of a girls empowerment program regularly funds food, transportation and materials for sessions on her own credit cards while awaiting State grant reimbursement.


Loan collateralization levels and sources: A City-sponsored lending program that provides a startup business lending product for diverse entrepreneurs requires over-collateralization of loan amounts, including putting a lien on the entrepreneurs’ homes. This traditional banking norm disproportionately excludes those who do not have enough business assets to shield their personal assets from risk. To address the inherent biases that are excluding classes of borrowers, the collateralization rules would need to be relaxed or applied more creatively.


One startup leader was able to receive additional funding from her incubator/accelerator program to cover equipment costs rather than be forced to put a second lien on her family home.


Failed appraisals or feasibility studies. Appraisals often rely on comparable properties in higher-income areas, leading to undervalued assessments of properties in low-income neighborhoods. Consequently, potential investors and developers perceive these areas as risky and unprofitable, deterring crucial investment. Traditional appraisers will look for other intangibles, like wealth and relationships, to justify fully valuing the “as complete” plans of established developers. Additionally, feasibility studies may not fully consider the unique challenges and potential of these neighborhoods, leading to misinformed decisions and missed opportunities for growth and revitalization. These failures perpetuate economic disparities, hinder community development efforts, and underscore the need for more inclusive and nuanced approaches to assessing the true value and potential of low-income neighborhoods.


To date we’ve seen a failed commercial construction loan appraisal and a failed commercial feasibility study due to a lack of comparables, and a lack of intangibles to support the “as complete” value suggested by the business plan.


As noted in "White Fragility" by Robin DiAngelo, adapting existing practices with inclusivity in mind isn't enough; we need to dismantle ingrained structures perpetuating systemic biases and reshape systems entirely.


This requires the commitment of all of us to stretch beyond our comfort zones and:

· Unpack biases;

· Prioritize open dialogue and active listening; and

· Build inclusive partnerships.


As we continue our mission, we are working with partners that strive to break down dominant culture barriers and advocate for more inclusive and nuanced approaches to supporting transformative ideas in low-income neighborhoods.


Together, we can create a more equitable and thriving environment for all entrepreneurs and initiatives.

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