An initiative launched by Black executives to support Black Canadian-led businesses and charities has set an ambitious goal of raising $1.5-billion over the next 10 years.
The Black Opportunity Fund was formed by a group of Bay Street leaders over the summer in the wake of protests against anti-Black racism. On Tuesday, the not-for-profit unveiled a plan to raise a large fund that would be managed, in partnership with the Toronto Foundation, for the benefit of charities, small businesses and entrepreneurs from the Black community.
The idea is to create a permanent pool of capital – similar to an endowment – which could generate steady returns and provide long-term funding for charities as well as loans and other financial support to small businesses. The aim is to support nearly 8,000 Black-owned businesses and 450 charities over the next 15 years.
“We have heard quite strongly that there is desire for there to be a pool of capital that is available and has the flexibility to take into account the particular needs of the Black community, especially as it relates to charities and non-profit organizations,” said Colin Lynch, co-founder of the group and head of global real estate investments at TD Asset Management.
The group is asking the federal government for a cornerstone commitment of $800-million. Ottawa has not committed anything yet, but Mr. Lynch said government officials seem “receptive to the idea of further support.”
In September, the federal government committed $93-million over four years to a newly formed Black Entrepreneurship Program, which is separate from the Black Opportunity Fund. Financial institutions, including Royal Bank of Canada Royal, Bank of Montreal Montreal, Bank of Nova Scotia BNS, Canadian Imperial Bank of Commerce CM, National Bank NA, Toronto-Dominion Bank TD, Vancity and Alterna Savings, also committed $128-million to that Ottawa-led initiative.
The Black Opportunity Fund is hoping to raise additional money from other levels of government, corporations, endowments and individuals. It has already secured financial support from 20 Canadian corporations, and is in conversation with dozens more, Mr. Lynch said.
If the group can hit its $1.5-billion fundraising target, the fund could generate upward of $100-million a year, Mr. Lynch said. This “philanthropic capital” would go to funding charities or providing financial assistance to Black-owned businesses.
Black Canadian entrepreneurs and small-business owners sometimes struggle to secure money from traditional lenders, Mr. Lynch said. The fund would assist by guaranteeing loans from private lenders or by making low-cost loans itself.
“We think this is something the whole of Canada can get behind and support,” Mr. Lynch said.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.