The Wealth-Building Power of a Black-Owned Business: A Success Story from the Business Equity Fund at the Boston Foundation
By Orlando Watkins, Vice President and Chief Program Officer at the Boston Foundation and founder of the Business Equity Fund, and Anthony Rust, Fund Manager of the Business Equity Fund.
A series of significant financial investments by the Boston Foundation’s Business Equity Fund in TARTTs Day Care Centers, a longtime provider of child care in Boston, is a recent example of the wealth-building power that can be unleashed when a company owned by people of color has access to the advice and capital they need to grow.
For close to 80 years, TARTTs has been providing critical services to Boston’s families. Opened in 1946 by the remarkable Mrs. Bessie Tartt Wilson (see below), the Tartt family has grown the business over three generations, expanding from one child-care facility to multiple sites in Boston.
Photo above: The family from left: Mary L. Reed (2nd Generation), Ken Reed (3rd Generation), Nida Wright Adjetey (4th Generation), Wanda Geer (3rd Generation).
Photo by Richard Howard for the Boston Foundation's Annual Report in 2019.
The Business Equity Fund (BEF) at the Boston Foundation saw the potential in TARTTs and provided financing to the company through three different transactions. Now, after almost eight decades in business, TARTTs Day Care services are being sold—the successful culmination of decades of hard work and service to the community.
Founded at the Boston Foundation in 2018, the BEF helps businesses owned by people of color employ more staff, build more wealth and ultimately thrive. The Fund is designed to provide both flexible financing and patient capital to established businesses that are positioned for growth. It also serves as a critical core component of a broader ecosystem, leveraging ancillary capital from its affiliates, including Nectar Community Investments and Liquid Capital Enterprises. To date, 40 businesses have received a total of $22.34 million in capital financing.
“From the very beginning we loved the Business Equity Fund’s mission,” says Ken Reed, Chief Operating Officer of TARTTs, on behalf of the family. “It was a unique approach when it came to supporting businesses. Wealth building for Black and Latinx company owners is both a laudable and achievable goal if those owners are supported especially at the most critical stages of their lifecycle.
The BEF is loaded with successful entrepreneurs who understand the challenges we face as owners, not just in the realm of access to capital, but truly believing in our potential. They inspired us to keep pushing our model forward with confidence.”
"It is very easy for business owners to get so engrossed in their day-to-day operation that they lose sight of the possibilities the future could hold. Having an organization willing to invest in what your business could someday become is invaluable.” - Ken Reed, Chief Operating Officer of TARTTs.
Asked about the services the BEF provided, he said, “The BEF worked with us in many ways. They provided workshops, seminars, training opportunities and eventually funding to help us achieve our goals. Utilizing its expansive network of business owners and industry professionals, the BEF also provided us with a personal business consultant who helped us with strategic planning.”
Speaking about the consultant the BEF provided Reed says, “While we were initially resistant to the idea of involving someone in our business at that level, we quickly realized how important goal setting and developing realistic approaches for achieving desired outcomes was for our business. It is very easy for business owners to get so engrossed in their day-to-day operation that they lose sight of the possibilities the future could hold. Having an organization willing to invest in what your business could someday become is invaluable.”
Indeed, the BEF is playing a desperately needed role in helping businesses owned by people of color. According to The Color of the Capital Gap, a report of the Foundation’s research center Boston Indicators, White families have 5-8 times more wealth than Black and Latinx families and the share of Black-owned firms that received none of the financing they requested of banks is almost double that of White-owned firms. In addition, the vast majority of venture capital funding goes to White founders: 72% as compared to 2% for Black entrepreneurs and 1% for Latinx entrepreneurs.
The sale of TARTTs is an excellent example of one of the BEFs major goals—closing the wealth gap that exists between majority communities and BIPOC communities. Perhaps most importantly, it is proof of the value that exists in BIPOC communities and the investment and financing opportunities that other business lenders and investors should be considering this marketplace.
Mrs. Bessie Tartt Wilson
Mrs. Bessie Tartt Wilson arrived in Boston at the age of 19 from Mobile, Alabama to attend nursing school. However, upon graduation, she found that employment as a Black nurse was challenging and so she tapped into her natural talent for entrepreneurship. At first, she founded and ran a nurses’ registry to help other Black nurses find employment, but then she turned to the needs of Boston's children and the tremendous potential for growth in the city’s child-care market.
In 1943, at the age of 23, she founded Tartt’s Nursery School in Dorchester. It quickly became renowned throughout Boston for high-quality child care, but Wilson didn’t stop there. She went on to develop a teaching philosophy based on a well-rounded curriculum and a strong value system designed to instill a love of learning and encourage the development of happy, healthy, confident children.
“We think our mother/grandmother/great-grandmother would be very proud of what TARTTs has become,” says Ken Reed. “Bessie Tartt Wilson is widely regarded as a pioneer in the field of education. However, all three generations of family members who followed her into the family business primarily knew and respected her, first and foremost, as a strong businesswoman. Her innovative approaches to child care as a business as well as her work ethic, critical thinking and decisiveness is what I feel spawned generations of future entrepreneurs. We ‘got the bug’ from her and it allowed our family to help take TARTTs to heights even she may not have anticipated. We feel she would be very proud to see her name live on.”