Each year, Kwanzaa encourages the African American community to reconnect with their roots and heritage, and focus on values of the utmost importance. Cooperative economics —Ujamaa—is the holiday’s fourth principle and calls upon Black people to build their own businesses, control the economics of the community, and share in all its work and wealth.

The Black community represents the nation’s third-largest consumer group, with an aggregate buying power of $1.6 trillion dollars, according to the University of Georgia’s Selig Center for Economic Growth. Estimates indicate that there’s also $300 billion in untapped spending potential, due to the community being historically underserved and systematically excluded in goods and services such as food, housing, healthcare, banking and more. 

Indeed, Black-owned businesses can lead the way in creating more wealth within and between the community. But there’s also a moral imperative for well-established companies that benefit from Black dollars to work towards supporting the creation of Black wealth. Efforts must go beyond Black History Month observances and philanthropy, and include tangible grants and investments to Black-owned businesses so that they may self-sustain and, ultimately, grow. 

For example, Black venture capital funds are embodying the principle of cooperative economics every day, but they don't get the support they deserve, due to racial disparities in the venture capital marketplace. Issues of racism in the industry are oftentimes insidious, and structural factors include reduced access to capital relative to their white peers, and fewer legacy connections. 

At Foot Locker, Inc. as part of our Leading Education & Economic Development (LEED) initiative, a comprehensive program to give back to Black communities, we decided to help bridge the gap by investing more than $20 million in seven Black-owned or operated VC firms during the past 18 months—an effort that advances diversity in how venture funds are allocated and makes a difference in determining which venture efforts sink or swim in an otherwise volatile market. Several of these fund managers are first-timers, meaning the investment also supports new entrants into the space.

This is one-way well-established businesses can help the community tap into its own buying power, with an opportunity for Black people to directly benefit from its own economic growth.

There are few excuses for companies to avoid doing so, when there are ample avenues and opportunities. The new Seed at the Table investment platform has created a system in which anyone can invest in Black-owned businesses, as a way to support those disproportionately impacted by the pandemic and to address the disparity in which White-owned businesses have more access to capital than Black-owned businesses. It also intentionally builds on the momentum for racial justice that has emerged since last year, even as some rallying cries from allies have reduced to a murmur. The platform features numerous businesses seeking investment to either get off the ground or expand their operations. 

Outside of various projects from Black entrepreneurs to support the community’s economic development, other companies are also supporting the cause, but more need to join in the work. Earlier this year, for example, McKinsey and Company invested $15 million in the Black Economic Development Fund managed by the Local Initiatives Support Corporation (LISC). LISC is an organization also supported through Foot Locker, Inc.’s LEED initiative. The partnership, McKinsey executives said, is part of efforts to bridge the racial wealth gap and fight social inequity. 

In order for Black communities to thrive, it’s not only upon Black people to support Black-owned businesses year-round, but also for established companies in the general market to take a serious look at their operations, recognize how they benefit from Black consumers, and do the work of pouring back into these communities. It’s how our community allies can join us in the fight to reclaim resources and support economic empowerment as part of the way forward. 

Patrick Walsh is the Vice President, Growth and Commercial Development at Foot Locker, Inc. As a part of the Commercial Leadership team, Patrick acts as a strategist and advisor to the global commercial business.