(Bloomberg) — The NAACP, the country’s biggest civil rights organization, is entering the investment world with a new impact fund that will focus on overlooked communities.
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The 115-year-old group is looking to raise $200 million to invest in fund managers and startups “focused on closing gaps facing communities of color,” according to a statement Friday.
“Right now, deeply entrenched systemic barriers are curtailing the innovative progress necessary to breed healthy competition in a global economy,” NAACP President and CEO Derrick Johnson said in the statement. “We’re seeking to change that.”
Founders from underrepresented groups face steep barriers to funding. Last year, for example, venture funding to Black-founded startups in the US fell to its lowest in seven years. At $705 million, the figure was less than 0.5% of the $140.4 billion that went to US-based startups overall, according to Crunchbase.
Racial Discrimination
The new NAACP fund comes at a time when efforts to address those gaps are facing legal attacks from conservative activists. One such high profile case involved the Fearless Fund, an Atlanta-based venture capital firm that was sued by Edward Blum’s American Alliance for Equal Rights.
Blum argued that the fund’s grant program for Black women entrepreneurs was discriminatory toward other races, and Fearless Fund ended up shutting down the program. Blum was behind the racial discrimination suit against Harvard that ultimately led the Supreme Court to end affirmative action for college admissions.
It’s the NAACP’s first vehicle investing in fund managers or startups, a spokesperson said via email. The fund may invest in businesses led by Black or Brown managers as well as people of other backgrounds looking to address problems for those communities, the spokesperson said.
The organization has tapped venture capital investor and consultant Jay Lundy as a managing director to lead the venture, dubbed NAACP Capital.
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–With assistance from Akayla Gardner.
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