A GIS-based Impact Score tool for Impact Investments in Massachusetts
By Rajat Kumar, Impact Investing Intern
Businesses owned by Black, Indigenous, and People of Color often face structural and geographic barriers to financing. A report by McKinsey & Company highlighted that in 2022, Black and Latino founders, also referred to as “founders of color”, “BIPOC” (Black, Indigenous, and People of Color) or “MBEs” (Minority Business Enterprises) received only 1 percent and 1.5 percent, respectively, of total U.S. venture capital (VC) funding. Women-founded teams received just 1.9 percent of VC funds, while Black and Latina women founders received only 0.1 percent. Data shows that around 20% of small businesses in the United States are -owned by people of color (U.S. Census Bureau, 2022, Finio et al., 2023).
This project reveals that in Massachusetts, less than a percent of businesses are certified MBEs, despite BIPOC communities representing nearly 28% of the state’s population.
This gap in the local economy is further shaped by key social impact indicators such as access to jobs, education, networks, and financial systems – and ultimately determines who gets to build wealth. There is a fundamental challenge faced by local BIPOC business entrepreneurs where opportunity is not evenly distributed.
At the same time, BIPOC businesses can unleash opportunities for financial institutions as they play a major role in the United States economy.
There is a trend among impact investors to support BIPOC founders by deploying catalytic capital, which accepts more risk and/or lower returns in order to fill financing gaps and mobilize third party investment. However, these financial entities often face challenges in tapping into the BIPOC-owned business ecosystem.
BIPOC entrepreneurs face persistent barriers to accessing capital, including limited banking relationships, systemic bias in lending, lack of collateral often required from traditional lenders, and limited access to investor networks. While impact investors seek to address these inequities, identifying exactly where investments can generate the greatest social and economic returns remains difficult. Traditional spreadsheets and static datasets often fail to capture geographic patterns of inequality, leaving investors without clear guidance on where capital can be most transformative.
The Story Map
This GIS-based Story Map project integrates multiple datasets to create a composite Impact Score for municipalities across Massachusetts.
This tool tracks six key indicators: BIPOC population share, poverty rate, unemployment rate, median income, educational attainment, and business density. Together, these metrics generate an impact score – measuring the disconnect between community demographics and business ownership.
A higher score indicates where diverse communities exist, but entrepreneurial ecosystems remain underdeveloped, signaling untapped potential.
By combining demographic, economic, and business indicators, the analysis identifies priority locations where racial equity needs, economic distress, and entrepreneurial gaps converge – highlighting high-impact opportunities for targeted investment with high need and better social returns on investments.
What are the results?
Six cities in Massachusetts–all designated Gateway Cities by the state legislature–emerged with impact scores above 70, signaling urgent investment needs: Chelsea, Lawrence, Springfield, Holyoke, Brockton, and Lynn.
Chelsea ranked first with a score of 81.53, driven by high BIPOC population, elevated poverty and unemployment, and low business density. In contrast, Georgetown ranked lowest, reflecting stronger economic indicators and lower disparities.
Across the 26 priority municipalities, clear patterns emerged – urban centers and post-industrial cities consistently demonstrated high entrepreneurial gaps, highlighting structural inequities embedded in local economies.
What’s Next?
This tool is designed for impact investors, CDFIs, foundations, and business support organizations seeking data-driven strategies for inclusive growth in Massachusetts.
The GIS-based impact scores provide a scalable framework to deploy catalytic capital with equity goals in cities like Chelsea. By guiding capital toward municipalities where the investment impact potential is highest, investors can reshape entrepreneurial ecosystems, expand business ownership, and foster long-term community wealth.
