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LGBTQ+ people are significant contributors to many local economies. Photo by Photo Italia LLC.
Every June, communities celebrate Pride Month with parades, flags, colorful window decals, community events, and rainbows in business storefronts. But progress happens beyond the frame of celebration. Pride is a great time to recognize the LGBTQ+ community members and business owners who are already part of our communities, but it is also a time to reflect on who is being included in our economic ecosystem, who is being left out, and what that means for long-term growth.
Working in Main Street, you start to notice who shows up — who opens businesses, who is being asked to serve on boards or steering committees, who gets invited to the table, and who does not. What we have seen over the past few years is that the LGBTQ+ population is absolutely part of our local economies. They are creating jobs, spending money, leading initiatives, and building lives in our districts. But the ecosystems that support entrepreneurs, workers, and consumers are not always designed with LGBTQ+ inclusion in mind.
That disconnect has real implications for the health and competitiveness of our Main Streets and our broader local economies. Main Streets need to understand this disconnect and the ways they can foster more inclusive local economies.
The LGBTQ+ sector is not a new or emerging market. They are a present and powerful one. Recent estimates indicate that LGBTQ+ adults contribute approximately $1.7 trillion to the U.S. economy each year. Their annual buying power is currently around $1.4 trillion, which is comparable to the GDP of countries like Spain or Australia. These numbers reflect actual, measurable contributions across retail, services, real estate, finance, and other sectors.
Consumer behavior data adds even more weight to the picture. LGBTQ+ shoppers make 10% more store visits annually than their non-LGBTQ+ counterparts and spend 7% more per trip. More than 70% say they are willing to pay a premium for goods and services from businesses that support the LGBTQ+ community.
These figures are not only large, but also growing. As of 2024, 23% of Gen Z and more than 10% of Millennials identify as LGBTQ+. That is a generational trend that will continue to reshape the economic landscape. They are future leaders, business owners, volunteers, residents, employees, and board members. Communities that embrace this demographic shift will be better positioned for future relevance, both socially and economically.
Pride month is a great time to reflect on the ways your organization engages with and supports the LGBTQ+ community. Photo by Jessica Brauer.
LGBTQ+ entrepreneurs are opening businesses at a rate higher than the general population, but they are often doing it without access to the same support structures. The National LGBT Chamber of Commerce (NGLCC) estimates there are over 1.4 million LGBTQ-owned businesses in the United States, supporting more than 33,000 jobs. That number only includes those formally certified through NGLCC, meaning the actual total is likely much higher. Thirty-seven percent of LGBTQ+ entrepreneurs say they are not out to investors or their broader communities, often out of concern that it could affect their funding or client relationships.
Despite their impact, these business owners face unique challenges. The funding gap is especially stark. LGBTQ+ founders receive only 0.5% of the total $2.1 trillion in U.S. startup capital, according to a report from StartOut. This is despite evidence that LGBTQ+ startups often outperform their peers. On average, they create 36% more jobs, file 114% more patents, and achieve 44% more successful exits than other founders.
Some LGBTQ+ business owners report being directly denied funding due to bias. In one study, 33% of those who were turned down reported that the reason given was that their business was not the type of business the lender wanted to support. The outcome is a market that is doing more with less, and that speaks to a missed opportunity for lenders, investors, and economic development programs alike.
LGBTQ+ workers also continue to experience barriers in the economy. According to the Williams Institute at UCLA, nearly half of LGBTQ+ employees are not out to their supervisors. Twenty-one percent are not out at work at all. Among those who are, 39% report experiencing discrimination, compared to 12% of those who are not out. These experiences range from being passed over for promotions to enduring hostile work environments.
One in three LGBTQ+ employees has left a job because of how they were treated. More than 70% have heard slurs, jokes, or negative comments about LGBTQ+ people at work. Such environments are not only harmful to individuals. They affect productivity, morale, and retention. For local economies that rely on small business employment and a stable workforce, that is not sustainable. Communities lose out on talent, leadership, institutional knowledge, and ultimately experience population decline.
Creating a supportive environment for LGBTQ+ people can help attract entrepreneurs and business owners. Photo by Charlene Sharp.
Policy does not exist in a vacuum. It shapes how people experience place. The increasing number of anti-LGBTQ+ legislation has a direct impact on where LGBTQ+ individuals decide to start businesses, relocate for employment opportunities, or invest in their local community.
Communities that have chosen to improve their policy environments have seen measurable progress. The Municipal Equality Index (MEI) is a tool used to assess the inclusivity of a city or town’s laws and policies. It evaluates areas like non-discrimination ordinances, municipal services, law enforcement, and leadership inclusion.
A powerful example of the MEI in action comes from Laramie, Wyoming, the site of one of the most tragic and widely known hate crimes against a member of the LGBTQ+ community, Matthew Shepard. In the 27 years since, Laramie has taken meaningful steps to confront its past and commit to a more inclusive future. In 2016, the city scored just 48 on the Municipal Equality Index. By 2024, that score had risen to 92, including a perfect 100% in both Non-Discrimination Laws and Law Enforcement practices. Laramie’s journey demonstrates how communities can evolve and lead with intention, even when beginning from a place of pain.
Main Streets have always played a role in shaping what economic participation looks like at the local level. Whether you are coordinating a façade improvement program, recruiting new businesses, or organizing events, you are making decisions that affect who feels welcome and supported.
Support for LGBTQ-owned businesses can take many forms. Creating directories, promoting grant opportunities, or simply featuring these businesses on your platforms helps normalize their presence and grow their reach. These efforts do not need to be large-scale to be meaningful. They just need to be consistent.
Partnerships are a crucial starting point. Collaborating with local LGBTQ+ organizations, chambers, or networks ensures that your work is informed by real needs. These groups often have resources, contacts, and lived expertise that can help your program build smarter and more effectively.
Visibility is key. Encouraging local businesses to adopt inclusive practices, display signage, and engage in LGBTQ+ training can shift the tone of a district. It signals that all customers and employees are welcome, and that matters for both culture and revenue.
Collect and track the data that supports long-term inclusion. Are LGBTQ+ businesses represented in your outreach? Do you know how many are located in your district? Are there LGBTQ+ residents serving on your board or involved in your programming? If not, think about what barriers might be in the way, or better yet, ask.
Pride Month is a time for celebration, but it also serves as a checkpoint. LGBTQ+ people are already making significant contributions to the economy. The question is whether the systems around them are keeping up.
Inclusion is not extra. It is essential. When we build ecosystems that reflect the full diversity of our communities, everyone benefits.
Downtown Decorations, a Main Street America Allied Member, is this quarter’s Main Spotlight advertiser. For more information about what they do to support Main Street organizations, click here.
Applications are now open for the broader round of the Backing Small Businesses grant program, supported by American Express, which will award 400 grants of $10,000 to help locally significant small businesses overcome economic hardship, invest in growth, and make a meaningful impact in their communities.
Main Street Morgantown leveraged strategic partnerships to create a retail incubator that supports downtown, the local university, and the local arts community.
Meet 100 resilient small business owners rebuilding with support from our disaster recovery grant program, part of the Backing Small Businesses program supported by American Express.
