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In late January, the Greater Wilmington Business Journal reported that Channel, a small business center for minority entrepreneurs backed by Live Oak Bank, was shutting down. I saw the article shared all over social media, but I don’t think any other outlets picked up the story.
Channel was founded in late 2021 to help those who'd previously been unable to access traditional business resources like coaching and consulting, financial advice and assistance, and office space. It offered a host of free services to anyone who wanted them, but in particular focused on minorities and women — ultimately serving over 1,000 small business owners and entrepreneurs.
When it was launched, it seemed very much of a piece with DEI efforts taking root in the public and private sectors at the time, but it also apparently made business sense for Live Oak Bank, the nation’s largest Small Business Administration lender.
On the one hand, the creation of Channel implicitly acknowledged racial inequality. Director Chakema Clinton-Quintana and business advisor Atiba Johnson, both Black, could relate to the minority experience in the small business world — and spoke to the mistrust of financial institutions in minority communities. Over the years, I heard from them, and the entrepreneurs they helped, about the value of having someone who “looks like you” at your side on the daunting journey of starting a business.
I've heard Clinton-Quintana and Johnson both speak very directly, but elsewhere there were a lot of euphemisms used: ‘potholes’ on the road to creating a business, ‘barriers’ to funding, and difficulty in getting ‘access’ to resources.
And, the truth is, the inequality Channel was addressing could look like a lot of different things, some of them difficult to talk about. There’s the overt racism of an individual loan officer who turned away an entrepreneur, the broader discrimination of banking policy (like Wells Fargo’s fair lending violations, for example), and the generational economic disparities that have left minorities without startup capital or financial credit. For Black entrepreneurs in particular, you could trace that to the redlining era, Jim Crow, or slavery, depending on how far back you pull the camera.
On the other hand, there was an economic case for Channel. I remember hearing some rumblings of surprise on the right that Live Oak Bank, whose CEO James S. "Chip" Mahan III was reportedly a significant donor to President Trump’s first inauguration, had stood up something so ‘woke.’ But you could see the logic: Channel could help create a “pipeline of healthy businesses Live Oak is eager to serve,” by Live Oak Bank’s own estimation. And, if you’re being a bit more cynical, you might imagine that, in 2021, many companies were calculating the halo effect of embracing DEI efforts, or the reputational (and thus financial) cost of not doing so. To top it all off, entrepreneurialism — helping people chase The American Dream – is probably always a better pitch to conservatives than social safety net programs and subsidies. You can see how the stars aligned.
Now, a little more than four years after founding Channel, Live Oak Bank has shut it down. I wanted to ask more about that decision, but it was tough going.
Clinton-Quintana and Johnson both declined to comment about Channel’s closure beyond boilerplate statements (I suspect, but don’t know for sure, that NDAs are involved, which is pretty standard fare for corporate exits). Meanwhile, Live Oak Bank opted for email over an interview.
Asked the first obvious question – why shutter Channel? – their response, the same statement they sent WilmingtonBiz, was generic PR:
After careful consideration, we’ve decided to bring Channel—Live Oak’s small business development center in downtown Wilmington—to a close at the end of this month. Live Oak determined that the needs of Wilmington’s small business community have evolved. Since Channel opened, the local small business ecosystem has grown significantly, with many strong organizations now offering education, technical assistance, and community programming for entrepreneurs. With those resources firmly in place, Live Oak is refocusing on what we do best—providing banking and financing solutions that help small businesses grow and thrive.
Notably, the statement makes no mention of minorities, which is odd given that their unique experiences, needs, and challenges were the very reason Channel was created as “an inclusive small business center in downtown Wilmington that serves minority entrepreneurs.” It’s hard to chalk that up to corporate amnesia.
From my conversations with people in the start-up and entrepreneurial world, it seems true that there are more resources out there than there were in 2021. But I hear about minorities dealing with the same gaps and blind spots – more euphemisms, I know – that existed in the past. That’s why, in part, Johnson recently founded the Wilmington Minority Chamber of Commerce. When I spoke to him in December, Channel was still ostensibly alive and well, and Johnson said that while it was an important asset, there was still work to be done. In other words, minority business owners needed more help to level the playing field, not less.
I pushed Live Oak Bank on this a bit, asking, “When Channel was founded in 2021, it was described as an effort to help establish trust between minority communities and banks and overcome what historically has been described as a lack of access — have those issues been addressed?”
In their response, Live Oak Bank dodged the question and again managed not to use the word “minority.”
“Channel was a meaningful and successful first chapter in Live Oak’s work supporting Wilmington entrepreneurs. It strengthened local connections and supported the small business ecosystem during a particularly important period for our community,” their spokesperson wrote.
Charitably, you could take “a particularly important period for our community” to mean the wake of the Summer of Racial Reckoning in 2020, when institutions were searching their souls and reappraising their roles and responsibilities when it came to racial inequality in our country. Cynically, you can read that phrase as the time when socio-political pressure was at its peak, and the failure to do DEI work could mean costly public blowback. (And both things could be true: even if Live Oak Bank created Channel as a performative gesture, it still did good work.)
I put the question one other way, noting that “many large banks like JP Morgan Chase, Wells Fargo, and Barclays have scaled back or ended DEI efforts as part of policy changes and pressure from the Trump administration” and asking Live Oak Bank if it could comment on residents who saw the closure of Channel in that vein.
“We are continuing to support entrepreneurs by focusing our efforts where we deliver the greatest value—through specialized banking and financing solutions aligned with our mission to be America’s Small Business Bank,” a spokesperson wrote, which again avoided the question and the issue of race or DEI. The spokesperson punted in a similar fashion when asked if there were any efforts to transition Channel to another fiscal sponsor or establish it as a free-standing institution.
Live Oak Bank said that shutting down Channel was not part of any other internal reorganization. And, while WilmingtonBiz noted that Channel’s 5,000-square-foot downtown Wilmington lease was up in March, that overhead cost was not an issue, according to Live Oak Bank. If the issue was simply that Channel was losing money, that the economic case was no longer there, presumably Live Oak Bank could have said as much.
So, if I take Live Oak Bank at its word, Channel closed because its work was done. And if that work was the same on its last day as it was on its first day, that means to me that Live Oak Bank believes the racial disparities and inequalities that plagued minority entrepreneurs in 2021 have been rectified, or that enough other institutions have taken up the effort to address them. But, even when prompted in a few different ways, Live Oak Bank wouldn’t say that.
To be fair, Live Oak Bank isn't the only institution trying to gracefully (or quietly) wind down a DEI program. Setting aside Live Oak Bank’s non-answers, it’s hard not to see the end of Channel in the broader context, a collective corporate backing away from DEI efforts, although one imagines it's for a host of different reasons.
Some people publicly argued the systemic racism at the forefront of public discussion in 2020 was exaggerated or even illusory; they will likely feel vindicated now that DEI's moment seems to be passing. Others, I suspect, never really believed in DEI; they went through the motions to keep the socio-political wind at their backs and, now that those winds have shifted, they are happy to drop the issue. I know some believe in DEI but fear that public sentiment has shifted and, in this reactionary moment, the verboten words “diversity, inclusion, and equity” should be avoided judiciously. And many are simply taking cover from the Trump administration, and like-minded Republicans at the state and local level, who have made it a top priority to root out DEI wherever they perceive it.
It's harder to imagine that any company, including Live Oak Bank, believes both that DEI was necessary and also that its work is done, that the frenzied attempts at reckoning and rebalancing over the last few years have fundamentally changed the situation, that the problem of racial inequity is fixed. Mission Accomplished.
Many in leadership positions took up the cause of DEI with apparent sincerity, citing a deeply entrenched form of racism and inequity that persisted through the Civil Rights era into the 21st century. In their cases, it’s odd — to say the least — to see them simply wave it away.
Editor's note: A Messy Situation
This week, WWAY ran a piece about a Facebook post from a family member of a patient at Novant New Hanover Regional Medical Center, describing unsanitary conditions.
In response to those claims, Novant sent a statement to WWAY, which read in part, “We just finalized a thorough vetting process and have engaged a new vendor to overhaul and manage our cleaning and environmental services program. As we prepare for this transition on March 1, our leadership team has implemented additional rounding and oversight measures to ensure our standards are met.”
Last May, when I asked NHRMC President Laurie Whalin about concerns patients and nurses had shared with me about sanitation and hygiene, she told me Novant had recently brought in a new ‘environmental services’ (i.e., cleaning and janitorial) vendor, Sodexo. Whalin said Sodexo had lobbied for a larger staff and already had a good, longstanding relationship as the hospital’s food services provider.
This week, Novant confirmed it is bringing in a new new environmental services company, Crothall Healthcare. (I asked what happened to Sodexo; a spokesperson didn't provide details, but noted the company is still providing food services.)
My experiences with Novant over the last few years have often been along these lines: admit things were bad, point to some complicating factors (i.e. the pandemic), and note that new management, vendors, or systems are in place. Almost always, Novant will say that corrective measures were already being taken before the latest news story broke. It's not that leaders like Whalin have been dishonest or oblique; in fact, they've been generous with their time, offering interviews anytime I've asked (and sometimes proactively), and always responding to concerns. It's just that there's a PR-shaded optimism that seems a little out of touch, and asks for a lot of faith.
Case in point: this week StarNews quoted Novant Coastal Region President Ernie Bovio, who came to NHRMC in late 2023 after a series of leadership turnovers. Like other top Novant brass, Bovio cited old datasets as being responsible for NHRMC’s poor safety ratings — two out of five stars from the federal Center for Medicare and Medicaid Services and a “C” grade from the nonprofit watchdog group Leapfrog. (Notably, NHRMC scores poorly in safety categories based on much more recent data, and there is a steady stream of concerning stories from staff and patients being posted on social media, almost in real time.)
Bovio told StarNews, “2026 is going to be a turning point for us.”
I think the public would very much like that to be true (as would elected officials, who regularly get an earful about NHRMC). But if it’s not the same line Novant has been singing for several years now, it certainly rhymes: the conditions in the hospital are far better than the current rankings suggest and, when the data sets catch up, the public will see they are a 5-star, grade-A facility.
Last November, Whalin told me NHRMC expected to have a public-facing online dashboard that would give a more accurate, up-to-date picture of hospital safety ready to go by the end of the year. A couple of weeks ago, a Novant spokesperson said they were still working on it. I’m not sure exactly what the dashboard will look like, or whether it will assuage all doubts, but it would certainly help.
I’ll note that the WWAY story was about a different post than I’d seen earlier this week, which was from an anonymous account claiming to be a nurse, alleging poor working conditions this past weekend during the winter storm. A major hospital during a shelter-in-place event is going to be a madhouse — but in happier days, that’s when morale was highest, not lowest, current and former NHRMC staff have told me. One nurse described Hurricane Florence, for example, as “our finest hour.” That was definitely not the tone of this post, which we’re still looking into and trying to vet the source.
In short: What a mess