The Washington Area Community Investment Fund Inc. (Wacif) recently announced the launch of the DC Employee Ownership Initiative to create new pathways to small business ownership in the District.
There are approximately 2,650 business owners of color near retirement D.C., according to the Democracy at Work Institute, and the D.C. Employee Ownership Initiative, supported with $150,000 from founding corporate sponsor Citi Community Development, will provide retiring small business owners with succession planning support and technical assistance to transfer ownership of their businesses to employees. The initiative also will provide coaching to aspiring entrepreneurs to catalyze and launch new employee-owned cooperatives.
“Nationwide, employee ownership is experiencing a renaissance as a powerful tool for building community assets and ensuring that legacy businesses remain community anchors as business owners retire,” said Wacif Executive Director Harold Pettigrew. “Wacif is excited to deepen its collaboration with Citi Community Development in launching the DC Employee Ownership Initiative and looks forward to creating new opportunities to strengthen the approaches we have to community wealth-building through ownership.”
Robert Burns, Citi Community Development’s senior vice president and greater Washington market manager, added that nearly 40 percent of African-American business owners getting close to retirement age.
“By collaborating with Wacif, we aim to preserve existing businesses and catalyze new ones, so that residents, especially people of color, can access ownership opportunities and build wealth,” Burns said.
Research has shown that workers in employee-owned companies enjoyed 92 percent higher median household wealth and 53 percent longer median job tenure than those without.
In addition, employee ownership is increasingly important as baby boomers, who own 67 percent of U.S. small businesses, are facing retirement, of which 85 percent have no succession plan according to research by Democracy at Work Institute and supported by Citi Community Development.
“Employee ownership is an initiative highlighted in Mayor Bowser’s Economic Strategy and aligns with her commitment to create pathways to the middle class,” said Kristi Whitfield, director of D.C.’s Department of Small and Local Business Development. “The DC Employee Ownership Initiative will provide important tools for the city’s small businesses and help drive inclusive economic growth.”
Employee-owned cooperatives are business enterprises that are owned and governed by their employees. The number of U.S. employee-owned cooperatives has grown to exceed 350, with more than 7,000 worker-owners and annual revenues of over $400 million.