COVID-19 has shuttered main street and presented unprecedented challenges to small business owners. The economy is in a perilous state—nearly double the amount of jobs lost in April came from small to midsize businesses versus large corporations. Simultaneously, the Black Lives Matter movement, fueled by a long history of institutional bias, has reinvigorated a national call for justice.

As the country faces some hard truths and tries to navigate the complexities of a new economic normal while battling systemic racism, it is time to reflect on the areas where we can make an immediate difference, including how we can be more intentional with where we allocate our dollars.


Small businesses are fighting a battle on two fronts—COVID-19 and historical prejudice—which are increasingly intersecting. Research from the Brookings Institute uncovered that people of color constitute around 40 percent of the U.S. population but own only 20 percent of the nation’s over five million businesses. They face undue difficulty in accessing capital: 60 percent of loans sought by white small-business owners are approved by large banks, but a mere 29 percent are approved for Black small-business owners. McKinsey similarly finds that 42 percent of minority-owned small businesses reported difficulty in obtaining their much needed credit, compared to 29 percent overall. And COVID-19 has further exacerbated the problem.

Racial injustice is one of the many issues that needs to be addressed. Gender inequality also persists, with women comprising 51 percent of the population despite owning just 33 percent of our businesses. We need a stronger emphasis on diversity, equity and inclusion (DEI), not only in terms of how we run our businesses, but also how we allocate our investment dollars.

Identifying Market-Based Solutions

Ensuring access to capital through the pandemic is one area that can make an immediate, measurable impact.

Our partnership with StoneCastle Cash Management, a fintech solutions provider, enables us to distribute funds to local banks, credit unions and community reinvestment programs across the country, but in particular to economically disadvantaged communities. Our clients’ cash allocations are now facilitating Small Business Administration (SBA) and economic disaster loans and ensuring the sustainability of our main streets. In fact, despite holding just 17 percent of all assets in the banking ecosystem, community banks account for half of all small business loans. The strategy has returns and downside protection competitive with large, institutional cash strategies while still meeting our impact rubric.


Despite the headlines, certain real estate investments can also yield long-term impact for the local economy. Following a heavy sell-off, investors have access to inexpensive public REITs, which have exposure to Section 8 housing. Section 8 builds in a backstop for a portfolio, frequently subsidizing a large portion of rents, which means impact investors can benefit from the same returns but with enhanced capital preservation.

Charitable Giving and Citizenry

Supporting small businesses and community wellbeing often extends beyond investing for good. The pandemic presents societal challenges that also require non-market answers and an equal emphasis on charitable giving solutions. The CARES Act recognized as much, removing the limit on charitable deductions, and helping nonprofits assist those most impacted by COVID-19.

The River Fund, based in Queens, New York, has been one such success story. Fighting hunger, homelessness and poverty across the five boroughs, the River Fund has seen its board raise more than $1.5 million. Where COVID-19 might have challenged the organization’s ability to operate, impact-minded citizens stepped up. The River Fund has provided 4.6 million pounds of food in just 14 weeks of the coronavirus crisis.

At Tiedemann Advisors, we believe that every day presents an opportunity to create a positive impact. Many of our clients are fully engaged with supporting their local communities through philanthropy and charitable giving, as well as by putting their investment capital to work for change and a better future. COVID-19 and the ongoing fight for social justice have brought stark disparities forward, but by looking at solutions through an impact lens, we can make this a teachable moment.

Michael Tiedemann is a founding partner and CEO at Tiedemann Advisors.