The Ann Arbor Area Community Foundation (AAACF) is sharing a new report that has helped to inform their work when it comes to how community and capital intersect in Washtenaw County.

AAACF commissioned the Washtenaw County Capital Research Report, the first report of its kind to deepen understanding of the investing ecosystem in Washtenaw County. According to the report, investment capital is mostly available to large businesses, but 70% of Washtenaw businesses have fewer than 10 employees. Furthermore, lending on a per household basis favors more affluent neighborhoods and white neighborhoods.

“Our guiding principles have been to make data-driven decisions, to collaborate across sectors and across neighborhoods, to prioritize community-led programs and to address emergency needs while also preparing to address recovery and the long-term impacts of this pandemic,” Neel Hajra, CEO, AAACF said in a video highlighting the foundation’s work in COVID-19 recovery.

The report highlights ways in which marginalized and low-income communities are often denied access to capital investments. A lack of equitable educational opportunities, underdeveloped business networks, and little history of economic development all contribute to businesses being unable to secure loans and investment funds.

But AAACF understands that providing opportunities for business development in under-resourced communities is vital not only to business owners but to the community as a whole.

“Possibility and opportunity—it drives me, and now as a proud member of the AAACF team, I bring into my work the mindset that community philanthropy should be supportive of the opportunity and possibility that the community seeks for itself,” Jillian Rosen, vice president for community investment at AAACF, wrote in a blog post.

Seeking to fill gaps identified in the area, AAACF most recently announced a $250,000 impact investment in Michigan Women Forward’s (MWF) Community Impact Note fund, which provides microloans to women-led businesses across Michigan.

The $10 million Community Impact Note (CIN) program provides loans of up to $50,000 to small businesses owned by women to promote growth and sustainability. AAACF’s contribution will target growing businesses in Washtenaw County that struggle to obtain lending capital.

“I applaud AAACF for their leadership,” Carolyn Cassin, MWF president and CEO, and CMF member said in a press release. “They serve as pioneers for Michigan community foundations and through this investment, they demonstrate how important it is to provide leadership through impact investing.”

With these funds, MWF will be able to provide loans to 10 to 15 small businesses across Washtenaw County. Such funding is crucial because of the COVID-19 pandemic’s impact on small business sustainability.

“With COVID-19, we know women and minority-owned businesses have been hit the hardest,” Rosen said. “This partnership will help these businesses recover and rebuild and catalyze the launch of new businesses in Washtenaw County.”

Rosen also notes that the microloan program will prioritize low to moderate-income women business owners and businesses owned by women of color. The program will also provide technical assistance through MWF to support business growth and sustainability.

“We’re proud to be the very first community foundation to make an investment in Michigan Women Forward,” Hajra said.

Both AAACF and MWF staff say they recognize the importance of investing in small, women- and minority-owned businesses to generate more economic opportunities in the area.

“AAACF’s capital, MWF’s microloan program and our community’s local businesses are a start to redefining the set of circumstances for economic opportunity in Washtenaw County,” wrote Rosen.

Want more?

Read AAACF’s press release on its MWF investment.

Read AAACF's Washtenaw County Capital Research Report.

Read Jillian Rosen’s blog post on AAACF’s investment in MWF.