Can a ‘Guaranteed Income’ for Black Entrepreneurs Narrow the Wealth Gap?
To tackle barriers to capital for Black businesses, an Oakland project is trying a new strategy: Monthly cash payments, no strings attached.
At the start of the coronavirus pandemic, one organization seeking to narrow the racial wealth gap changed its strategy from loans to direct cash payments for its cohort of Black businesses.
Illustrator: Maria Ponomariova/iStockphoto via Getty Images
As dozens of cities roll out or contemplate “guaranteed income” pilot projects to give residents money with no strings attached, a program in Oakland, California, is testing a similar model to help small businesses.
Runway, which calls itself a “financial innovation firm,” originally helped Black women entrepreneurs mainly through small loans. But in 2020, Runway began gifting its business-owner clients — which it calls its “family” — with a monthly $1,000 stipend, no strings attached. The Rapid Emergency Fund project is a pilot, which Runway is billing as a “universal basic income” experiment for Black business owners, to see if this kind of supplemental income could be curative for the racial wealth gap. It started in March when all non-essential businesses were ordered to close to stop the spread of Covid-19.