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Black-owned businesses not receiving fair share of public contracts

 By Harry Colbert, Jr., Managing Editor,

A picture is worth a thousand words, and the picture on the cover of this week’s edition of Insight News tells a shocking tale.

In 2016, African American Leadership Forum’s (AALF) executive director, Jeffrey Hassan, and Minneapolis Urban League executive director, Steven Belton, met with public, private and philanthropic leaders to determine investments in the Twin Cities African-American community.    While they found some progress was being made in employment, legislative initiatives, and philanthropic investment, there was no progress being made in government spending with Black-owned businesses.

Black-owned businesses receive just 0.5 percent of the $4.63 billion spending from the seven reporting agencies in an African American Leadership Forum survey.   Source: African American Leadership Forum

Black-owned businesses receive just 0.5 percent of the $4.63 billion spending from the seven reporting agencies in an African American Leadership Forum survey.
Source: African American Leadership Forum

From the data collected from agencies willing to respond to Hassan and Belton’s request to disaggregate data based on specific ethnicity – the State of Minnesota, University of Minnesota, cities of Minneapolis and St. Paul, Hennepin County, Metropolitan Council, and Metropolitan Airport Commission – the picture the numbers paint is by no means a Kehinde Wiley, Amy Sherald, Andy Worhol, Renoir nor Picasso. While many agencies were touting there spends with what are categorized as disadvantaged businesses (businesses that are either minority or women owned), when the numbers were ferreted out, it showed the devil was in the details.

According to the responding agencies, more than $4.63 billion was spent among the agencies in 2016. Of that, ethnic minority and women-owned businesses received $420,760,611 or just a little above 9 percent of the total spend. But Black-owned businesses only received $23,202,347 or about 0.5 percent. The largest of the disadvantaged business spend went to white women, whose businesses received $278,352,762 or 6.01 percent; which means of the more than $4.63 billion spent in 2016 nearly $4.49 billion of it was spent with white-owned businesses; just under 97 percent.

“I think all of us knew the numbers were bad, but we didn’t know they were that bad,” said Hassan. “They couldn’t do any worse if they were doing it intentionally.”

Hassan stopped short of saying the paltry spending with Black-owned businesses was intentional, but he did say it was a case of “out of sight, out of mind.”

“That’s why it’s so important to have this data disaggregated and in black and white, so to speak. AALF has to be sort of the watchdog to make sure this spending issue is front and center.”

Hassan did point out some good news. He said while the spending with Black-owned businesses is not nearly what it should be, the agencies who participated in the survey increased spending by about $2 million as a whole and indicated a willingness to do more.

Much of that increase came from the State of Minnesota. In 2015 the state only spent about $135,000 with Black-owned businesses. That number jumped to $1.5 million in 2016, keeping in mind the state spent about $2 billion that year.

The state’s chief inclusion officer, James Burroughs addressed the numbers during African Heritage Day at the Capitol; an event presented by the Council for Minnesotans of African Heritage.

“In 2015 we spent $135,000 with Black-owned businesses and that’s ridiculous,” said Burroughs. “This past year (2016) we spent $1.5 million and that’s a significant increase, but that’s still not enough.”

While the numbers AALF and the Minneapolis Urban League were able to collect are glaring, Hassan is fearful the numbers from agencies that declined to participate in the survey may be even worse than those that were provided. According to Hassan, entities such as Osseo School District and Brooklyn Center School District chose not to provide any of their spending data even though more than 50 percent of Osseo and 75 percent of Brooklyn Center students are students of color.

AALF will bring further light to this issue of spending – or lack of – during its 4th Annual Public Forum, held this coming Saturday (March 10), at the Humphrey School of Public Affairs on the University of Minnesota campus. In addition to discussing the issue of government spending, the forum will address topics of education and health. The education session will feature a special report from Commissioner Kevin Lindsey of the Minnesota Department of Human Rights, whose office recently cited 43 school districts for discipline disparities. The health breakout, led by Gene Nichols and Stella Whitney-West, executive director, Northpoint Health & Wellness Center, will launch the Trauma-Informed Survey developed by Dr. Reba Peoples and Adeya Richmond.




March 2, 2018
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