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Cambridge has long been hailed as a progressive bastion and home to among the more racially and ethnically diverse populations in Massachusetts. But a “disparity study” commissioned by the City Council has found that just one-half of 1 percent of some $260 million in city contracts went to firms owned by people of color over a recent five-year period.
It’s a disappointing “but not surprising” finding, business advocates say. Already, community leaders inside and outside of Cambridge City Hall are calling for change.
“The study is just the first step in improving our efforts,” said Pardis Saffari, director of economic opportunity and development in Cambridge. “We’re hoping to not only work internally but also externally with the community to ensure that people are aware that the city is open and ready to do business with them.”
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In a memo releasing the report last week, city officials pledged to expand contracting opportunities for businesses owned by people of color and women and help them find such opportunities.
Ordered in 2020, the study found that the city awarded just $3.1 million to minority- and women-owned enterprises in contracts for city services between July 2016 and July 2021. Of that, more than half — $1.7 million — went to businesses owned by white women.
Another $1 million was spent with Asian-owned firms, and $300,000 with Hispanic-owned firms. Around $7,000 went to Native-American businesses, and less than $60,000 to Black-owned businesses, despite Black people accounting for nearly 11 percent of the city’s population.
Roughly half the residents of Cambridge are white. Asian and Pacific Islanders, the second-largest group, account for nearly 20 percent of the city’s population. Another 12 percent identify as another race or of two or more races.
The report was authored by law firm Griffin & Strong and based on a survey sent to 8,000 businesses, interviews with businesses owned by women and people of color, public hearings, and focus groups. (The study analyzed contracts for professional services, supplies, and other services such as marketing, technology, and landscaping. It excluded construction-related spending.)
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Altogether, the study found broad sentiment that businesses owned by women and people of color often go ignored by city departments, that their owners feel shut out of “informal networks” that help businesses secure city contracts, and that Cambridge’s existing strategies to address racial disparities “have not been effective.”
The study recommends the city “expand its use of race and gender-conscious policies,” perhaps including “a sheltered market program,” that would allow Cambridge to designate certain government contracts to businesses owned by women and people of color.
The Cambridge study, however, comes as race- and gender-based preference programs of all kinds come under increasing legal scrutiny in the wake of the Supreme Court ruling barring racial preference in college admissions. Conservative groups have taken aim at a number of both private- and public-sector programs that aim to steer contracts to disadvantaged groups based on race.
Nicola Williams, owner of The Williams Agency, said the picture the report paints of Cambridge is expected, but disheartening. She is also a facilitator for the Cambridge-Somerville Black Business Network, a coalition of 60-some entrepreneurs who encouraged the city to commission the report in 2020.
Those businesses “are not reaching out to the city because they are not feeling welcome,” Williams said. “They need to feel like the city is taking real effort to bring them in for change to be made. ... It’s low, for women, for people of color, across the board.”
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A report in the City of Boston in 2018 came to similar findings, that just 1 percent of its $664 million in construction and services contracts went to businesses owned by women and people of color. In 2021, Mayor Michelle Wu launched a “sheltered market” program of her own, first as a pilot with six contracts and then at full scale. It has boosted the number of contracting dollars for businesses owned by women and people of color to 6 percent in 2022 and 14 percent this past fall.
In October, Wu also announced the Supplying Capital And Leveraging Education, or SCALE, business accelerator program, which will use $2.4 million in federal funding to help small businesses compete for contracts.
How the new study might effect change in Cambridge is yet to be seen, said Denise Jillson, executive director of the Harvard Square Business Association. She called the results predictable, considering the demographics of Cambridge businesses. Of the 400 or so her group represents, less than a dozen are Black-owned.
“By producing a report like this, as painful as it to look at it, it’s a wake-up call,” Jillson said. “It’s important for all of us to work hard to change those numbers.”
Diti Kohli can be reached at diti.kohli@globe.com. Follow her @ditikohli_.