Although black-owned businesses make up more than a third of the local construction industry, they were awarded less than 1 percent of Memphis school contracts in the last five years, according to a new study.
That’s the most egregious finding from a consulting group commissioned by the school board last year to measure disparities in how Shelby County Schools does business — particularly with companies owned by white women and people of color.
The study, presented Tuesday to school board members, recommends that the district create an outreach program to try to close that gap. If the board adopts the findings next week as expected, such an initiative could be the next step.
The study highlights an equity issue in a district that’s focused more typically on eliminating inequities in the education of children. But as Tennessee’s largest school system, Memphis’ fifth largest employer, and the overseer of a $1 billion budget, Shelby County Schools has an obligation to manage its business dealings in an equitable fashion, too, said Shante Avant, chairwoman of the school board.
“Wherever there are inequities, whether it’s academics or where we spend money, … all those are part of how we improve our city,” Avant told Chalkbeat ahead of the report’s release.
Specifically, the study compared the percent of businesses owned by white women and people of color who are “willing and able” to do work for the school district to the amount of money spent with those businesses from 2011 to 2016.
Here’s a quick summary. (For a more detailed chart, scroll to the bottom of this page.)
Business owners interviewed by researchers identified several barriers encountered when attempting to work with the district. Almost half cited competing with large firms as the biggest concern. (Nationwide, only 4 percent of black-owned businesses have more than one employee.)
The district commissioned the study last fall from MGT Consulting Group based in Tallahassee, Florida, under a $254,000 contract. The group reports completing more than 200 such studies, including one in 2012 for the Memphis utility company.
In anticipation of the findings, Shelby County Schools recently hired Brenda Allen as its procurement director to spearhead efforts to close the gap. In addition to recommending the new initiative, the study recommends hiring three more people under Allen to assist with “outreach, reporting, and monitoring” to increase contracts with businesses owned by white women and people of color.
The consultant said the district’s procurement team should “document their outreach efforts and the reasons why they may have rejected qualified” businesses.
The findings reflect disparities countywide. More than half of Memphis businesses are black-owned, but generate less than 1 percent of the city’s business revenue, according to the 2012 U.S. Census of Small Business Owners. Five years earlier, the number was closer to 2 percent. And similar gaps in county government spending were found in a 2016 study.
The report commended the leadership of Shelby County Schools for its desire to decrease disparities in business contracts after years of inattention to the issue — and relatively soon after the 2013 merger of city and county schools.
You can read the full report here.
Want to learn more? Join High Ground News, Chalkbeat Tennessee and MLK50: Justice Through Journalism on Jan. 25 for “Show Mem The Money: The Education Edition,” a conversation with Memphis education leaders about how the business of education can be an economic driver for women- and black-owned businesses as one of the city’s largest employers.