Black ExperienceBusiness

Minority Businesses Receive Little Federal Ad Money, Report Shows

Over the past five fiscal years, federal government agencies have spent approximately $5 billion in advertising, but only a minute share — $327 million — went to minority-owned businesses, according to a long-awaited report from the Government Accountability Office.

While non-minority-owned businesses continue to rake in billions of dollars in federal advertising money, Hispanic-owned businesses received just $192 million over five years, or about $38.4 million per year.

Black-owned businesses netted just $51 million, or about $10 million per year, over the five years covered in the new report that was prepared over a nine-month period beginning in October at the request of D.C. Congresswoman Eleanor Holmes Norton and other members of the Congressional Black Caucus.

Native American-owned businesses were the recipients of $50 million in advertising spending over the past five fiscal years while Asian American-owned enterprises received $31 million, according to the report.

Ethnicities classified as “other” received $3 million.

“On behalf of the [National Newspaper Publishers Association], this factual report exposes the gross racial discrimination and refusal of the federal government agencies cited in the report to be serious about diversity and inclusion with respect to annual federal spending on advertising,” said NNPA President and CEO Benjamin F. Chavis Jr. “For the government to admit today on the record that in the last five fiscal years, nearly $5 billion was spent on advertising and yet only a total of $327 million was actually spent on minority-owned businesses.

“his report is not surprising nor is it shocking, but it does reveal the consequences of systemic racial discrimination in both Republican and Democratic administrations when it comes to federal advertising spending,” Chavis said.

The departments of Defense (DoD), Homeland Security (DHS), and Health and Human Service (HHS) were responsible for 73 percent of federal advertising contract obligations that went to specified businesses between fiscal years 2013 and 2017.

Thirty-four other agencies were responsible for the remaining 27 percent of such obligations.

“Some agencies directed all or nearly all of their advertising contract obligations to specified businesses, but because these agencies’ advertising contract obligations were relatively low, the amounts they directed to these businesses were also relatively low,” Kris Nguyen, the acting director of Strategic Issues at GAO, wrote.

The federal government serves as the largest advertiser in the country. The most recent 2007 GAO report on advertising spending revealed that just five percent of the $4.3 billion available for advertising campaigns went to minority-owned businesses.

That report singled out five agencies — the National Aeronautics and Space Administration  and the departments of Defense, Homeland Security, Treasury and Interior — for their spending with minority-owned contractors.

For each of the past five years, DOD, HHS and DHS were consistently the top three agencies in terms of the amount of advertising contract obligations they directed to specified businesses.

All three generally increased the amounts they obligated to these businesses.

For example, in fiscal 2013, the three agencies allocated over 60 percent of all federal advertising contract obligations to specified businesses; in 2017 they accounted for more than 80 percent.

In 2017, DoD allocated 30 percent of the $147 million in advertising contracts to SDBs and those owned by minorities and women. That was followed by DHS (27 percent), DHS (25 percent) and all other federal agencies (18 percent).

Those figures were up from 2013 when the same agencies contracted for just $75 million in advertising.

Norton spokesman Benjamin Fritsch said the congresswoman was examining the report and would comment once she’s reviewed it.

However, Chavis said the NNPA would call on Congress to craft legislation that could force the hand of federal agencies to do more business with those owned by minorities.

“The NNPA therefore calls upon Congressman Cedric Richmond, the chair of the CBC, as well as members of the Congressional Hispanic Caucus to forcefully raise our voices of discontent and reaffirmation of our demands for equity, for justice, for fairness and end to this kind of systemic refusal to treat African-American-owned and Latino-owned businesses along with others in a just, fair and equitable manner,” he said. “We intend to amplify our voices and amplify our actions as a result of the GAO pulling the sheets off of what is really not happening in terms of federal advertising spending. There is no equity, no justice, no fairness and we will not be silent.

“The NNPA expresses its gratitude to Eleanor Holmes Norton for taking the lead to help ensure that this GAO report will be released to the public and for that we are grateful,” Chavis said. “The NNPA also thanks other members of the CBC and CHC for their leadership in this issue. Today, however, it’s time for all of us to respond and to act. There should be legislation introduced in Congress immediately to rectify this gross systemic inequity.”

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Stacy Brown

I’ve worked for the Daily News of Los Angeles, the L.A. Times, Gannet and the Times-Tribune and have contributed to the Pocono Record, the New York Post and the New York Times. Television news opportunities have included: NBC, MSNBC, Scarborough Country, the Abrams Report, Today, Good Morning America, NBC Nightly News, Imus in the Morning and Anderson Cooper 360. Radio programs like the Wendy Williams Experience, Tom Joyner Morning Show and the Howard Stern Show have also provided me the chance to share my views.

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