Impact InvestingRacial Equity

Opportunities for impact investors in New Orleans


The W.K. Kellogg Foundation (WKKF) convened a cohort of influential investors (endowments, investment banks, corporations and individuals) for an experience called Reimagining Opportunities for Investment (ROI) in the South, an exploration of diverse investment opportunities in the U.S. South. This dynamic group of investors came together to mobilize a sustainable investment ecosystem for Black, Indigenous, Latino and other undercapitalized communities of color in the Deep South.

ROI in the South included a look at the region as a whole and made stops in local communities to zero in on investment-ready opportunities.

New Orleans is one of the most unique places in the country, with a diverse history that dates back centuries. Its blend of African, Native American, Latinx, Asian American and European cultures, languages and traditions is central to the city’s identity and enduring cultural appeal. The story of New Orleans is one of Black-American-led culture, with commercial districts centered on food, music and art. 

From an investor’s point of view, New Orleans is bursting with entrepreneurial talent and full of opportunities. This economic pursuit requires collaboration and a shared intention to avoid repeating historical patterns of extraction and disenfranchisement of communities of color. In the mid-19th century, New Orleans was one of the country’s economic centers, but this was undergirded by plantation slavery. Following the Civil War and Reconstruction, racist policies continued, resulting in an economic downturn. Decades later, the devastation of Hurricane Katrina in 2005 exacerbated disparities in income, education and health.

Subsequent investments in growth have largely not been inclusive of its communities of color. Though New Orleans is one of the country’s cultural hubs and has no shortage of entrepreneurs, inequities persist: while the number of businesses owned by people of color continue to increase, they receive only 2% of the city’s receipts. A 2020 Tulane study of startups in greater New Orleans found that entrepreneurs of color were half as likely to receive traditional bank loans or angel investments as majority White-owned firms.

The Business and Investment Opportunities

The ROI in the South session on New Orleans highlighted that investors need to understand the economic, historical and cultural dynamics of a place to make successful investments. For impact-oriented investors in the South, contextual understanding and a racial equity lens are critical to ensuring their investments are addressing, rather than entrenching, racial wealth gaps. New Orleans presents a wealth of opportunities for such investors – particularly considering that by 2050, more than half of the city’s population will be people of color.

At each stop in the ROI in the South journey, it has been crucial for investors to hear first-hand from community leaders. The New Orleans session included perspectives from local practitioners and experts: Christy Slater, vice president of programs, Women’s Foundation of the South; Lamar Gardere, executive director, The Data Center; and Judy Reese Morse, president & CEO, National Urban League of Louisiana.

“It’s not a matter of ‘if New Orleans will win.’ But ‘when.’ And ‘when’ New Orleans wins, we will see a community whose culture not only inspires but elevates and supports its culture bearers. You will see thriving children, working families, engaged communities and equitable systems.”

“Just as our nation’s laws were changing in a way that would allow Black people to participate in the economy, and in one of the most diverse cities in the nation, we failed to build an inclusive economy. Instead we fashioned one that neither supported Black employment in industries that would provide good, family sustaining wages, nor nurture entrepreneurs of color.”

“The opportunity for all those who love the culture that community creates every day, is to invest in what lifts up community as experts and as leaders.”

Watch the Full Conversation:

WKKF’s investments in New Orleans began in the 1940s, and the city was named as one of the foundation’s priority places in 2008. The foundation’s investments in the city have included support to social, business and civic institutions to build infrastructure for more inclusive economic growth. Grounding in the experience and partnerships developed through this work, WKKF’s Mission Driven Investment (MDI) team identified a lack of access to start-up and scale-up capital as a key gap impact investors could fill. New Orleans has never lacked creativity or entrepreneurs, but affordable financial infrastructure remains inaccessible for many consumers and small businesses.

Investment Case Studies

To illustrate how investors can target the market gaps in New Orleans, WKKF highlighted two investees, Southern Opportunity and Resilience Fund (SOAR) and Community Investment Management (CIM)’s Enterprise Loan Fund. Though neither is based in New Orleans, both are working in the city by addressing market-level challenges, providing infrastructure for community-led entrepreneurship, and ensuring that capital is moving with an equity lens.

Southern Opportunity and Resilience Fund (SOAR)

SOAR is a loan facility created to build the capacity of community development financial institutions (CDFIs) that meet the needs of historically disenfranchised entrepreneurs in the U.S. South and Southeast. SOAR targets nonprofits and small businesses owned by people of color and women. CDFIs are critical to providing capital to historically underserved businesses and entrepreneurs, but in the South and Southeast, CDFIs are financially constrained. SOAR enables CDFIs to provide more loans that can flexibly support businesses and nonprofits. WKKF made a $3 million program related investment (PRI) into SOAR’s subordinated debt (Class B), which is considered riskier and more difficult to raise. This was designed to enable SOAR to attract additional investment. 

In the fund’s second year, an impact report was conducted based on interviews with 275 small business owners across 16 states who received loans from the SOAR Fund. The study found that 79% of borrowers said their ability to maintain jobs increased and 74% indicated they could not have easily found a good alternative financing source if SOAR did not fund them. The report also stated that some loan borrowers continue to be challenged by the burden of repayment. It’s in this context that we see the need for flexible and forgiving capital as small businesses face a market riddled with high inflation and increasing interest rates. 

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Community Investment Management (CIM)’s Enterprise Loan Fund

This fund provides responsible debt finance to small businesses, partnering with technology-driven lenders to reach market segments underserved by traditional lenders. In New Orleans, as in many other markets, the biggest obstacle to small business growth and sustainability is access to capital. CIM identifies responsible lending partners who use technology to reach a wider array of small businesses that are considered inefficient market segments. It has an explicit impact mission and serves disproportionately more women, people of color and military veteran-owned businesses than traditional financial institutions. WKKF made a $5 million mission-driven investment into the fund and provided post-investment support.

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Looking Ahead

Future ROI in the South sessions dive into specific sectors, including reentry and agricultural investments. WKKF believes the following are helpful to keep in mind as investors think about opportunities in New Orleans:

  • Building an inclusive economy in New Orleans is a long game. Decades of disenfranchisement won’t be undone in years. Investing in existing institutions, such as CDFIs, that have a long-term commitment to these populations and regions is one way for investors to build long-term infrastructure.
  • New Orleans is an example of how investors can unlock opportunities by investing in a community’s strengths. New Orleans is about experiences more than it is about institutions. Investors can identify the structures that turn culture and creativity into market opportunities that benefit local communities.
  • Successfully investing in New Orleans requires working alongside communities. Investments made in the community without the community routinely fail, an historical pattern that unfortunately played out in the post-Katrina investment wave. Communities know their own challenges and corresponding solutions. Partnering with them to realize those solutions is how businesses thrive and growth is inclusive.

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