Study finds news coverage of racial events hurts Black entrepreneurs

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A study analyzing the effect of racial news coverage on crowdfunding campaigns tested the impact on Black entrepreneurs’ projects. The results found that participants viewed these projects as lower quality and less potentially successful.

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Former UC Berkeley assistant professor in the Haas School of Business Andreea Gorbatâi co-authored a study that found news coverage of racial events decreases support for Black entrepreneurs. 

The study analyzed data pertaining to more than 20,000 projects on Kickstarter – a crowdfunding platform for entrepreneurial projects – finding that the success of Black entrepreneurs’ campaigns decreased following news coverage of racially charged events, such as the killings of Trayvon Martin and Eric Garner.

On the other hand, the success rates of their non-Black counterparts remained stable.

“You have to disentangle the different factors contributing to it,” Gorbatâi said. “With crowdfunding, you could imagine that maybe people give less money because people are donating to American Civil Liberties Union, or ACLU, or to other causes. So, we wanted to see if the effect was people actually staying away from African Americans’ projects more, and that’s why we ran three experiments.”

The study’s first experiment gave a predominantly white group of participants one of two articles – one covering a snowstorm and the other being a neutral account of plans for racial bias training after a racially charged arrest in Philadelphia – then asked the participants to evaluate a crowdfunding proposal.

The results of the experiment found that participants who were exposed to coverage of the arrest were more likely to view an entrepreneur’s idea as lower quality if they were Black.

Additionally, the participants exposed to racial news coverage were more likely to doubt a project’s potential for success if it was headed by a Black entrepreneur.

“Our premise was that if there is increased awareness of racial discrimination then that should translate to more empathy,” Gorbatâi said. “If you see the police are killing African Americans unfairly or mistreating African Americans then there’s no reason why that should affect an entrepreneurial proposal because there is no relationship between the two.”

The study’s second experiment repeated the same process as the first but with an equal number of white and Black participants.

After being presented with news coverage of racially charged incidents, both the white and Black participants were more likely to favor a project if its founder belonged to their “in-group.”

The experiments’ results surprised Gorbatâi, who was hoping to see a “silver lining” to the racial violence that sparked the Black Lives Matter movement in the form of increased awareness of racial discrimination.

“We all want to think that if someone tells us you’re doing the wrong thing, we’re going to self-correct and do the right thing,” Gorbatâi said. “This experiment highlights how deep the roots of discrimination are and how much more we need a concerted effort changing institutions, changing education, changing how African Americans are integrated in society at all levels.”

Gorbatâi and one of her co-authors are planning to conduct a follow-up study consisting of similar experiments but instead priming participants with positive news pertaining to the Black community, such as Amanda Gorman’s inaugural poem

Additionally, they plan to look at more extreme incidents of racially charged events, such as police killings of Black people, to see if “there are any particular interventions that would flip the empathy switch,” Gorbatâi added.     

Contact Rachel Raps at [email protected], and follow her on Twitter at @rachelraps_dc.