By Beth Sirull
Women-owned businesses are one of the fastest growing economic engines in the United States. There are nearly 13 million such businesses, which together generate nearly $2 trillion in sales and employ over 9 million people.
The number of women-owned businesses is also growing fast—over 20% in the past few years. On average in 2019, across the United States, women started over 1,800 businesses every day. Over 40% of these businesses are owned by women of color. And the number of businesses owned by Black women grew by an astonishing 50% over the past five years.
And yet, in 2018, women received a meager 2.2% share of venture capital dollars invested. And less than a quarter of businesses receiving a loan were owned by women. In fact, only $1 of every $23 lent to a business in this country goes to a woman-owned business.
Access to capital is critical to growing businesses. Women-owned businesses are starting at a rapid clip, but they don’t grow at the rate that other businesses do. It’s time to start financing this growth.
Michelle May’s Seva Foods is one such business. And San Diego’s Women’s Empowerment Loan Fund, or WELF for short, is one such financing vehicle. Before receiving a loan from WELF, May manufactured Seva Foods’ vegan, organic snacks—unique foods like coconut jerky and space ice cream—in a rented commercial kitchen. She was perennially running out of product, which she notes is “a good problem to have—but one that needs to be solved.”
May was turned down by several lenders before securing a $25,000 loan from WELF. “Now I can buy the last piece of equipment I need to scale up production in a co-manufacturing facility,” she said. “This is my chance to grow my business.”
WELF in one of the philanthropic tools used by the Jewish Community Foundation of San Diego. The JCF’s goal is to make San Diego the best place to live for the greatest number of people. Yes, as you might expect from our name, we work to ensure a vibrant Jewish community in San Diego and around the world. But there can’t be a thriving San Diego for the Jewish community unless there is a thriving community for everyone.
When you have a donor-advised fund at the JCF, we give you a host of options for how to invest your philanthropic dollars. Where we can, we encourage our donors to make “impact investments”—investing the philanthropic dollars they hold at the foundation not just for financial return, but also to have a positive social impact on San Diego and the world.
We recommend options like WELF that have a positive impact. Donors receive interest on the funds they have invested and down the road, the principal will be returned to donors’ funds at the foundation. At that point, donors can choose to reinvest or give their money to any charity. In the meantime, San Diego’s women-owned businesses are getting the financing they need.
Seeking to both help fill the capital gap facing women-owned businesses and to foster a community of San Diego impact investors, JCF partnered with Catalyst of San Diego and Imperial Counties (formerly San Diego Grantmakers) to be the lead investor in WELF. Our investment encouraged and enabled other institutions and individuals across the county to invest.
Most of these investors were first-time impact investors. Building an ecosystem of investors in San Diego who are willing and able to invest capital for both financial return and social impact will open whole new pots of capital for small business in the region.
WELF is a $1 million pilot loan fund that provides low-cost financing up to $25,000, along with technical support, to women-owned businesses in San Diego. The fund enables women-owned businesses to grow, create jobs, and improve our local economy. It combines financing with expert business coaching to ensure recipients have the resources, tools and network needed to help their business grow.
As May says, “It’s not just the money. Working with WELF has connected me to people in the community who can help me as I grow my business.” The fund is open to all women business owners but focuses on reaching women of color. To learn more, visit the WELF web page.
Beth Sirull is president and CEO of the Jewish Community Foundation of San Diego.