Diverse Erie Economic Impact Report

PARKER STRATEGY GROUP

Investing in BIPOC Businesses: Fueling Economic Growth and Transformation in Erie County

PARKER STRATEGY GROUP

1

March 2025 2

Table of Contents 4

Executive Summary

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Diverse Erie Impact by the Numbers

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About Diverse Erie

6

Diverse Erie Initiatives

6

Erie County Population and Business Demographics

9

Economic and Community Impact of Supporting BIPOC Businesses in Erie County

10

Study Overview

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Investment in BIPOC Businesses Makes an Impact

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Conclusion

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Appendix A: Terms and Definitions

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Appendix B: Data and Methods

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Appendix C: Diverse Erie's Investments

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Executive Summary $5.7 Million

Impact of Diverse Erie investments

32 jobs

supported and sustained

54

small businesses

For every

$1 Invested by diverse erie,

$193,380 Contributed in Local and State Taxes

$1.63

is returned in impact

The work that Diverse Erie does in Erie County is invaluable; by giving the county’s BIPOC communities additional opportunities through the Generational Impact Investments, Small Business Investments, and the Small Business Fund, Diverse Erie is contributing positively to the economic momentum of the region. By fostering inclusivity and supporting diverse businesses, Diverse Erie has played a pivotal role in promoting economic growth, creating job opportunities, and enhancing the overall quality of life within the region. This report highlights key data and findings that demonstrate how the organization’s initiatives have positively influenced various sectors, from small business development to workforce diversification.

Through the investment of $3.5 million in BIPOC businesses and nonprofits that helped to support 54 small businesses, Diverse Erie helps drive additional economic impact in the region, supports and sustains jobs, and increases the tax revenue locally and statewide. This investment resulted in $5.7 million in economic impact, supported and sustained 32 jobs, and contributed $193,380 in state and local taxes.

By strategically directing resources to BIPOC entrepreneurs, these investments foster job creation, enhance business sustainability, and stimulate local commerce. The ripple effect of these investments extends beyond the businesses themselves, strengthening the overall economic fabric of Erie County by increasing consumer spending, expanding workforce opportunities, and building generational wealth in historically underserved communities. This level of impact underscores the importance of sustained, intentional funding that not only supports business owners today but also lays the foundation for long-term economic growth and prosperity.

“Without these investments by Diverse Erie, the BIPOC business community would look drastically different in Erie County. Expanding opportunities, particularly for people of color, has been a longstanding need in the region. With these targeted investments, BIPOC-owned businesses are now starting to thrive. Continued investments, specifically in BIPOC communities, help further Erie County’s economic growth.”

– Gary N. Lee Chief Administrative Officer of Diverse Erie

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DIVERSE ERIE ECONOMIC IMPACT BY THE NUMBERS $3.5 Million

Invested in BIPOC Businesses and Nonprofits in Erie County

$5.7 Million

Impact of Diverse Erie investments

$193,380

Local and State Taxes Generated

32 jobs

supported and sustained

54

Small businesses funded

about diverse erie Diverse Erie: Addressing Inequities and Advancing Community Equity | In 2017, Erie was ranked as the worst place to live in the U.S. for Black Americans based on income, health, and other socioeconomic indicators. The region faces stark public health disparities: food insecurity is 13% higher for Black families than white families; the infant mortality rate for Black mothers is 23 per 1,000 births, compared to 4.9 per 1,000 for white mothers; and diabetes mortality among Black residents is three times higher than among white residents. These challenges, compounded by inequities in job opportunities, business development, homeownership, and education, illustrate the systemic barriers faced by Erie County’s communities of color.

In response, Erie County Council established the Erie County Diversity, Equity, and Inclusion Commission, also known as Diverse Erie, in 2021. This initiative aims to tackle these systemic inequities by mobilizing public resources and attracting private investment to address racial disparities in the county. Diverse Erie funds projects and strategies designed to foster generational change, strengthen equity, and build a more inclusive future for all residents of Erie County.

Through strategic investments and community-centered initiatives, Diverse Erie is working to create long-term, sustainable impact that addresses the foundational challenges facing Erie’s BIPOC communities. A healthy community provides economic opportunities to all residents.

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Diverse Erie Initiatives Diverse Erie is driving equitable progress in Erie County, PA, through targeted initiatives that empower the county’s BIPOC communities. By focusing on opportunity investment, Diverse Erie strategically supports BIPOC-owned businesses, creating pathways for sustainable economic growth and community development. Diverse Erie’s initiates are a resource for organizations and small businesses across Erie County.

Generational Impact investments

Small Business Small Business investments Fund

Erie County Population and Business Demographics Erie County, Pennsylvania, is a diverse region in the northwestern corner of the state, bordered

by Lake Erie. The county has a population of around 270,000, with the city of Erie serving as its hub. The area is predominantly White, making up over 80% of the population, but there is 20% of the population that is comprised of African American (Black), Hispanic, and other ethnicities, especially in the city of Erie. The county has a median age (39.9 years) slightly above the national average, reflecting a stable but aging population.1 Erie County’s workforce is spread across sectors like healthcare, manufacturing, education, and retail, with a strong presence of small businesses and a growing interest in initiatives to support immigrant integration and workforce diversification.

The table located in Appendix C highlights Diverse Erie's extensive investment in small businesses and nonprofit organizations throughout Erie County, Pennsylvania. In addition, Diverse Erie along with other community investors including the Erie County Redevelopment Authority (ECRDA), Pennsylvania Minority Business Development Authority (PMBDA), The Erie Community Foundation (ECF), and the Erie County Gaming Revenue Authority (ECGRA) have stepped up to create a loan fund that is producing results across Erie County.2 1 U. S. Census Bureau Quick Facts 2 As of the latest reporting according to the Erie County Redevelopment Authority (ECRDA), total commitments to the DEI loan

program totaled $1,956,650, with contributions from ECRDA RLF ($457,900), ECRDA ARPA ($233,750), PMBDA ($265,000), the DEI Commission ($500,000), Erie Community Foundation ($250,000), and ECGRA ($250,000). To date, $1,722,650 in loans have originated, leveraging an estimated $3,975,600 in additional funds, supporting total project costs of approximately $5,698,250.

The program is estimated to have created 65 new jobs and retained 123 existing jobs, with $615,000 in funds currently available.

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Erie County, Pennyslvania Population Statistics Age & Sex

Race & Hispanic Origin 0.3%

5.1%

8.0%

2.3% 2.9%

Population estimates, July 1, 2023

267,571

20.5%

4.9%

50.3% 20.3%

82.9%

Female person

Persons under 18 years

White alone, not Hispanic or Latino

Two or more races

Persons 65 years and older

Persons under 5 years

Hispanic or Latino

Asian alone

Black or African American alone

American Indian & Alaskan alone

Source: U. S. Census

Currently, Erie County lacks specific publicly available data detailing the exact percentage of Black, Indigenous, and People of Color (BIPOC) businesses among its total business ownership. Although BIPOC communities make up about 13% of Erie County’s population, systemic challenges have traditionally limited their business ownership levels compared to the majority white population. Local initiatives like the Diverse Erie Small Business Fund are now focused on expanding support and opportunities for BIPOC entrepreneurs to help address this imbalance by providing investments to BIPOC-owned businesses, increasing economic growth and creating a more inclusive business landscape in the county.3 In 2022, Erie County’s business profile shows that there are 6,165 total employer establishments with 112,074 total employees with an annual payroll of $5.4 million. As of 2021, in Erie County there were 14,444 total nonemployer establishments.

3 https://www.census.gov/quickfacts/fact/table/eriecountypennsylvania/INT100222

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Erie County, Pennsylvania Business Statistics

total employer establishments, 2022

112,074

Total employment, 2022

5,444,372

6.4%

14,444

4,513

6,165

Total annual payroll, 2022 ($1,000)

TOTAL EMPLOYMENT, PERCENT CHANGE, 2021–2022

total nonemployer establishments, 2021

all employer firms, reference year 2017

3,660

men-owned employer firms, reference year 2017

756

women-owned employer firm, reference year 2017

Unavailable

3,595

286

3,467

nonminority-owned emplyer fimrs, reference year 2017

veteran-owned employer firms, reference year 2017

minority-owned employer firms, reference year 2017

nonveteran-owned emplyer firms, reference year 2017

Source: U. S. Census

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Economic and Community Impact of Supporting BIPOC Businesses in Erie County Supporting Black, Indigenous, and People of Color (BIPOC) businesses in Erie County yields substantial economic and social benefits, helping to reduce systemic disparities and generate new opportunities across several key areas. Diverse Erie is working to • •

• • •

Improve wealth gaps: BIPOC-owned businesses play a critical role in narrowing racial and generational wealth gaps. By providing pathways for wealth-building, these businesses will increase economic growth and foster financial security across disinvested communities.

Create jobs: Job creation by BIPOC businesses has a profound impact. If 15% of Black-owned businesses nationwide hired just one additional employee, the U.S. economy would see a $55 billion boost. In Erie County, this effect is even more pronounced, as BIPOC businesses contribute to local employment and economic growth.

Foster innovation: The diverse perspectives that BIPOC entrepreneurs bring drive innovation, contributing fresh ideas and solutions that strengthen the local economy’s resilience and vitality.

Strengthen communities: BIPOC businesses enrich local economies, support inclusive markets, and enhance community resilience—all benefits that extend to Erie’s broader population.

Increase family income: Through local entrepreneurship and job creation, BIPOC businesses bolster household incomes, improve financial stability, and enhance quality of life for families across the region.

Despite these positive contributions, BIPOC businesses face substantial challenges which are being ameliorated by opportunity investments by Diverse Erie which include: • • •

Limited access to capital: Many BIPOC entrepreneurs struggle to secure essential startup funding, which limits their growth potential and restricts the economic impact they can generate.

Discriminatory lending practices: Research4 shows that Black and Hispanic loan applicants face increased scrutiny regarding education and credit history compared to white applicants, further hindering their access to necessary capital.

Educational and business support resources: BIPOC entrepreneurs often face challenges in accessing high-quality educational and training resources critical for developing skills and knowledge, as well as affordable and essential business support services like legal, accounting, and marketing—barriers that can hinder entrepreneurial success, particularly for those with limited financial resources.

A healthy economy in Erie County relies on the inclusion and active participation of all its residents, including the BIPOC community, whose contributions are essential to the area’s economic vibrancy and resilience. By creating equitable opportunities for employment, business ownership, and access to resources, Erie County can foster economic growth that benefits everyone. Supporting BIPOC entrepreneurs and workers not only strengthens the community but also drives innovation, expands the local tax base, and builds pathways for sustained wealth. Prioritizing an inclusive economy enables Erie County to leverage its diverse talent pool and build a stronger, more sustainable future for all residents.

4 https://latino.ucla.edu/research/american-dream-deferred/#:~:text=Black%20and%20Latinos%20with%20excellent%20

creditworthiness%20were,Asians%20were%20similar%20to%20those%20for%20white.

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study overview Parker Strategy Group was contracted by Diverse Erie to measure the current economic impact of its efforts in Erie County. The study utilizes actual financial data provided by Diverse Erie. The data has been analyzed and modeled using IMPLAN (see Appendix B for more details on methodology).

TERMS TO KNOW

These are the direct expenditures by Diverse Erie for operations, grants, and funds.

Local revenue and supply chain impacts. These impacts measure the estimated increase in demand for goods and services in industry sectors that supply or otherwise support businesses and organizations.

Represents the third wave of economic impact and measures the estimated effect of increased household income resulting from expenditures by Diverse Erie, small businesses, and nonprofit organizations. Induced impacts reflect the reinvestment of earned wages, as measured throughout the first two levels of economic impact.

This reinvestment can occur anywhere within the economy on household goods, entertainment, food, clothing, transportation, and other household goods.

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INVESTMENT IN BIPOC BUSINESSES MAKES AN IMPACT Opportunity investment in Erie County’s BIPOC businesses is making an impact. As a result of $3.5 million in investment from 2022 to 2024, $5.7 million in economic impact has been generated with 32 jobs supported and sustained. As a result of this investment, $193,380 in local and state taxes have been generated.

Local and Statewide Economic Impact

$3.5 Million Direct impact

$1.3 Million induced impact

+ $5.7 + = Million $973,405 indirect impact

in combined economic impact

Investment in BIPOC businesses throughout Erie County have made an impact. Based on dollars invested into BIPOC businesses and organizations throughout Erie County, $5.7 million has been generated an economic impact.5 This includes a direct impact of $3.5 million, $973,405 indirect, and $1.3 in induced impact in FY23.

5 Economic impact measures the value of all sales of goods and services.

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ECONOMIC IMPACT

Combined Economic Impact

Direct

Indirect

Induced

Total

$3,500,000

$973,405

$1,266,084

$5,739,489

Source: Parker using data from Diverse Erie in IMPLAN

DIVERSE ERIE TOTAL ECONOMIC IMPACT BY CATEGORY

$0.97M INDIRECT

$1.3M INDUCED

$5.7M $5.7M

TOTAL ECONOMIC IMPACT

TOTAL

$3.5M DIRECT

Operations

Small Business Investments

Generational Impact Investments

Small Business Funds

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Supporting and Sustaining Jobs Overall Diverse Erie has supported 32 jobs across Erie County, (19 direct, 5 indirect, and 8 induced).

EMPLOYMENT IMPACT (JOBS) Direct

Indirect

Induced

Total

19

5

8

32 Source: Parker using data from Diverse Erie in IMPLAN

DIVERSE ERIE TOTAL EMPLOYMENT IMPACT BY CATEGORY

8

32

JOBS

JOBS

32 JOBS TOTAL EMPLOYMENT IMPACT

5

JOBS

19 JOBS

Small Business Investments

Operations

Small Business Funds

Generational Impact Graphic

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Contributing to the Local and State Tax Base Investment into the BIPOC community yields $193,380 in state and local taxes throughout Erie County and Pennsylvania. State ($127,240) and local taxes ($66,140) paid include payroll taxes, income taxes, sales taxes, and unemployment taxes.

TOTAL LOCAL AND STATE TAX IMPACT Impact

Direct Indirect Induced Total

Subcounty, General

$11,109 $4,669 $8,496 $24,274

Subcounty, Special Districts

$8,306 $8,569 $18,368 $35,243

County

$1,240 $1,663 $3,720 $6,623

State

Total

$60,567 $22,948 $43,725 $127,240

$81,222 $37,849 $74,309 $193,380

Source: Parker using data from Diverse Erie in IMPLAN

DIVERSE ERIE TOTAL LOCAL AND STATE TAX IMPACT BY CATEGORY

$193,380 TOTAL LOCAL & STATE TAX IMPACT

Operations

Generational Impact Investments

Small Business Investments

Small Business Funds

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Conclusion Diverse Erie’s opportunity investment in BIPOC businesses is proving to be a transformative force in Erie County, PA. Between 2022 and 2024, a $3.5 million investment catalyzed an impressive $5.7 million in economic impact, underscoring the Commission’s ability to amplify resources and foster meaningful growth. Beyond the financial returns, the initiative has supported and sustained 32 jobs, providing critical stability and opportunity within the community. Additionally, the program has generated $193,380 in local and state taxes, reinforcing its value not only to individual businesses but also to the broader economic fabric of Erie County. These outcomes highlight Diverse Erie as an effective and impactful model for equitable economic development, demonstrating the power of strategic investment in underrepresented communities.

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Appendix A: Terms and definitions Direct economic impact: All direct expenditures made by BIPOC businesses and organizations receiving funding and investment from Diverse Erie.

Direct employment: Total number of employees, both full-time and part-time.

Dollar year: Presented in 2024 dollars.

Government revenue/state and local tax impact: Government revenue or tax revenue that is collected by governmental units at the state and local levels in addition to those revenues paid directly by the BIPOC businesses and organizations. This impact includes taxes paid directly — by the BIPOC businesses themselves, by employees of the businesses and by vendors who sell products to the businesses — and also taxes paid at the household level.

Indirect economic impact: Includes the impact of local industries buying goods and services from other local industries. The cycle of spending works its way backward through the supply chain until all money is spent outside of the local economy, either through imports or by payments to value added (multiplier effect).

Indirect employment: Additional jobs created as a result of BIPOC businesses economic impact. Local companies or vendors that provide goods and services from the BIPOC businesses increase their number of employees as purchasing increases, thus creating an employment multiplier.

Induced economic impact: The response by an economy to an initial change (direct effect) that occurs through respending of income received by a component of value added. IMPLAN’s default multiplier recognizes that labor income (employee compensation and proprietor income components of value added) is not lost to the regional economy. This money is recirculated through household-spending patterns, causing further local economic activity (multiplier effect).

Induced employment: Additional jobs created as a result of household spending by employees of the BIPOC businesses and employees of vendors. This is another wave of the employment multiplier.

Multiplier effect The additional economic impact created as a result of the BIPOC business’s direct spending. Local companies that provide goods and services to these businesses increase their purchasing by creating a multiplier (indirect/supply-chain impacts). Household spending generated by employees of the BIPOC businesses and the BIPOC businesses’ suppliers creates a third wave of multiplier impact (induced/household-spending impacts). The multipliers in this study are derived by IMPLAN. Study year: 2022, 2023,2024 Subcounty general taxes: Includes city and township taxes.

Subcounty special districts taxes: Includes city, fire, police, emergency medical services and other special taxes levied at the local level.

Total economic impact: Includes spending on operations, capital expenditures, labor income expenditures and value added to the economy as a result of expenditures. It is the combined impact of direct, indirect and induced impacts.

Value added: The total market value of all final goods and services produced within a region in a given period of time (usually a quarter or year). It is the sum of the intermediate stages of production.

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Appendix B: Data and methods Data used to complete the economic impact analysis was provided Diverse Erie. Primary and secondary data were used to complete the input-output models in IMPLAN. The study approach and economic impact findings are a conservative estimate of impact and are based on actual financial information.

These findings represent a snapshot of the economic impact of investment into business growth and development in the BIPOC community.

Overview and the IMPLAN Model The most common and widely accepted methodology for measuring the economic impacts of economic sectors is input-output (I-O) analysis. At its core, an I-O analysis is a table that records the flow of resources to and from companies/organizations and individuals within a region at a given time. For a specified region like a state or the nation, the input-output table accounts for all dollar flows between different sectors of the economy in a given time period. With this information, a model can then follow how a dollar added into one sector is spent and respent in other sectors of the economy, generating outgoing ripples of subsequent economic activity. This chain of economic activity generated by one event is called the “economic multiplier” effect.

The primary tool used in the performance of this study is the I-O model and dataset developed and maintained by IMPLAN Group LLC (formerly Minnesota IMPLAN Group Inc.). IMPLAN is a widely accepted and used software model first developed by the U.S. Forest Service in 1972. The data used in the baseline IMPLAN model and dataset comes largely from federal government databases. The input-output tables themselves come from the Bureau of Economic Analysis. Much of the annual data on labor, wages, final demand and other market variables comes from the Bureau of Labor Statistics, the Census Bureau and other government sources.

Government agencies, companies and researchers use IMPLAN to estimate the economic activities associated with spending in a particular industry or on a particular project. The IMPLAN model extends conventional I-O modeling to include the economic relationships between government, industry and household sectors, allowing IMPLAN to model transfer payments such as taxes.

As explained above, the model works by tracking the flow of resources to and from companies/ organizations and individuals within a region. Producers of goods and services must secure labor, raw materials and other services to produce their product. The resources transferred to the owners of that labor or those raw materials and services are then spent to secure additional goods and services or inputs to the products they sell. For example, an organization in a region may develop a company that produces trains with a value of $1 million. However, to produce that product, they may be required to spend $500,000 in wages and benefits, $200,000 to suppliers of parts, $100,000 for electricity, $50,000 for transportation of goods and raw materials to and from the plant, and $50,000 in various professional services associated with operating a business (e.g., attorneys and accountants). The suppliers will, in turn, spend those resources on labor and raw materials necessary to produce the trains. Workers and the owners of the company will buy goods and services from other firms in the area (e.g., restaurants and gas stations). The suppliers, employees and owners of this second tier will, in turn, spend those resources on other goods and services, either within the study region or elsewhere. The cycle continues until all the money leaves the region.

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IMPLAN Methodology The model uses national production functions for 546 industries to determine how an industry spends its operating receipts to produce its commodities. These production functions are derived from U.S. Census Bureau data. IMPLAN couples the national production functions with a variety of county-level economic data to determine the impacts at a state and congressional district level. To estimate these regional impacts, IMPLAN combines national industry production functions with county-level economic data. IMPLAN collects data from a variety of economic data sources to generate average output, employment and productivity for each industry in a given county. IMPLAN combines this data to generate a series of economic multipliers for the study area. The multiplier measures the amount of total economic activity generated by a specific industry spending an additional dollar in the study area. Based on these multipliers, IMPLAN generates a series of tables to show the economic event’s direct, indirect and induced impacts to gross receipts, or output, within each of the model’s 546 industries.

The model calculates three types of effects: direct, indirect and induced. The economic impact of Diverse Erie’s investment in the BIPOC community is the sum of these three effects.

DIRECT Investments in constuction and expenditures for operations

INDIRECT Purchases from local suppliers

INDUCED Household spending from earnings of direct and indirect expenditures

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Considerations concerning IMPLAN There are three important points about the use of IMPLAN (or any other input-output model): 1. It is a fixed price model. The model assumes that changes in consumption are not limited by capacity and do not affect prices. This simplifying assumption does not cause a problem for the analysis presented here because we are taking a snapshot in a specific year.

2. As in many studies using this type of model, the model does not calculate the direct impacts; the direct impacts reflect actual spending levels and patterns. Changing the level of direct spending allows us to calculate the magnitude of the indirect and induced effects associated with the initial level of spending.

3. Because the model continues to calculate additional spending until all the money leaves the region (i.e., “leakage”), the larger and more economically diverse the region, the longer it will take for spending to leave the region and the larger the impact is likely to be. For example, employees may spend some amount of their income on buying a car. If no car manufacturers are in their state or county, this spending will leave the region and the multiplier effect will stop. At the national level, some portion of that same spending by that same individual may go to a national auto producer.

Therefore, that spending would lead to more spending at the national level than would be captured by a more regional model. The national impact will be larger than the sum of the individual states, and the individual state impact will be larger than the sum of the impacts in its congressional districts.

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APPENDIX C: DIVERSE ERIE’S INVESTMENTS Small Business Investments ($5,000 - $7,000) • Barb’s Corner

• Smoke n Barbeque

• AB Superior Auto Service

• Dapper Don’s Styling Lounge

• Tender Loving Care Place, LLC

• Erie Auto Service

• Divinely Crown’d, LLC

• True Sports, LLC

• FitKing Co.

• Lake Erie Woodworks

• Pacleys Moving and Labor Services, LLC

• Hill Top Mart, LLC

• WHM Working Capitol

• Materialistic Boutique

• 1 of 1 Services, LLC

• Mompreneur Renovations

• CookMedia, LLC

• Moore’s Painting & Services

• Joe’s Rentals

• Photos by Dai

• Sacred Divine Femininity, LLC

• Sew Royalty Embroidery & Custom Designs • State Auto Service • Supremacy Construction

Small Business Investments ($10,000 - $15,000) • C. Barney & Smith Memorial

• Triple D’s Tasty Grill

• Premier Manufacturing LLC

• Ty’s Healthy Healers

• Priority Care Unlimited

• Wonderful Chippers Food Group

• A Taste of Love

• I & M Convenience Store

• Barb’s Family Daycare

• Wayne Rentals, LLC

• Dinner is Served by Lisa

• 2 Brothers Auto Service

• Diverse Hands Daycare

• Camaraderie BBQ Inc.

• Hooks Catfish Kitchen

• Easter Group Daycare

• Heavenly Hands Early Learning Childcare Academy • LashedByTay BeautyCo • Property SoJutions-360, LLC • The Learning Ladder Early Child Care Center, LLC • World of Care Inc.

Small Business Investments ($20,000 - $25,000) • Handled with Care Childcare

• Almadina Supermarket

• Crockett Rentals, LLC

• Johnson Real Estate Properties, LLC

• Manus Enterprises

• Nature’s Beauty Salon

Small Business Investments ($100,000 - $250,000) • Youth Leadership of Erie (YLI)

• Mercy Center for Women (MCW)

• Eastside Renaissance Inc. (ESR)

• Minority Community Investment Coalition (MCIC)

• Greater Erie Economic Development Corporation, (GEEDC)

• Erie’s Black Wallstreet (EBWS)

Additional Investments ($500,000) • Diverse Erie Small Business Loan Fund

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PARKER STRATEGY GROUP

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