Financing Black Progress: On a Marshall Plan for the “Abandoned,” Self-Reliance, and “Pooling Our Resources” Via a Transformational National Fund

In his book, Disintegration: The Splintering of Black America, Washington Post columnist and MSNBC commentator Eugene Robinson (winner of the 2009 Pulitzer Prize for Commentary) exhorts that “our most urgent priority should be an all-out assault on the stubborn, self-perpetuating poverty and dysfunction” of the segment of Black America he dubs the “large, Abandoned minority with less hope of escaping poverty and dysfunction than at any time since Reconstruction’s crushing end.”

Of course, approaches and strategies for addressing this challenge must span several interrelated areas: financing (public and private), entrepreneurship, wealth-building, job creation, education, job training, politics and policy, racial disparities, societal and cultural trends, etc.

Robinson proposes in his book a publicly financed “Marshall Plan for the Abandoned” (MPA) that would involve “massive intervention in education, public safety, health, and other aspects of life, with the aim being to arrest the downward spiral.”

Even at the time he proposed it – the book was published in October 2010 when the political environment was relatively less toxic (before the November 2010 elections, the subsequent budget and debt ceiling debacles, and the nasty and racially charged political environment that ensued thereafter) – Robinson acknowledged that the MPA “will be expensive, and politically it will be a hard sell.” Nonetheless, he argued then that the MPA could be politically feasible:

“[The MPA] should be framed as a cognate of the original Marshall Plan: a costly, but ultimately profitable, investment in America’s national security. I doubt that it can be sold to the public and to Congress at all unless it is made explicit that the intent is not to give any special advantages to Mainstream black families that most Americans consider to be middle class or even affluent. Even given the nation’s serious burden of deficit and debt, designing and building a bridge to bring the Abandoned into the Mainstream is not beyond our reach…. We can find the money. We just have to find the political will. …We also have to find the political leadership.”

However, given the political wreckage of the past year, with even the relatively very modest American Jobs Act stalled in Congress, we doubt Robinson would still make this argument today.

In this regard, the BlackProgress.com article, Financing Black Progress, Part 1: A Publicly Financed “Marshall Plan” Is Unrealistic, So What’s the Alternative? A “Self-Reliance Marshall Plan”?, argues that:

  • the noxious political environment and tight budgetary conditions will likely persist for several years, and so it is unrealistic to expect that any initiative that requires substantial public investment – even one that is much less ambitious than the MPA –  has any chance of being implemented anytime soon;
  • therefore, if we are not just going to stand by helplessly and hopelessly, the only realistic alternative is to develop large-scale self-reliance strategies, such as a national resource-pooling fund to finance initiatives that can effectively address the most urgent problems.

The companion article, Financing Black Progress, Part 2: A Self-Reliance “Marshall Plan”: Creating a National Resource-Pooling Fund, discusses (i) recent developments and trends that indicate such resource-pooling is feasible and (ii) how a national resource-pooling fund – the National Ventures & Excellence (EXCEL) Fund – could be created.

[See excerpts from the two articles below]

Obviously, success requires that efforts are based on prudent assessments of:

· what is realistically achievable through the political process with respect to the prospects for public financing of initiatives that can transform distressed communities; and

· the feasibility of self-reliance and resource-pooling strategies based on business and social entrepreneurship (such as the EXCEL Fund).

Even if President Obama wins reelection, Congress is likely to remain closely divided, deeply polarized, and largely deadlocked on budget priorities, especially with respect to addressing poverty. Thus, even proposals that are much less ambitious than Robinson’s MPA must spell out precisely the political strategies and pathways for getting Congress to appropriate the necessary funds.

In any case, what is certain is that there will not be enough public investment to address urgent problems in distressed communities anytime soon, and there are several aspects of tackling these problems where governments cannot be expected to play a major role.

Thus, approaches must include an all-out ramp-up of self-help efforts to much higher levels–a massive national self-reliance/“pool our resources” strategy, e.g., in the form of a large, resourceful, innovative, and potent EXCEL Fund with sizable resources that can wield enough clout nationally and be a  transformational force in improving distressed communities.

Excerpt from: Financing Black Progress, Part 1: A Publicly Financed “Marshall Plan” Is Unrealistic, So What’s the Alternative? A “Self-Reliance Marshall Plan”?

“…Unfortunately, while substantial increases in public investment in proven cost-effective programs would be transformative — and so advocacy on this front should continue — there is no realistic chance that anything on a substantively transformative scale can happen any time soon. Despite previous calls for such investment, African Americans simply have not had and still do not have enough political clout to make it happen. Not even with an African American in the Oval Office, and not even if we were in economic boom times.

…[T]he noxious and racially-charged political environment, the continued contentiousness of the budget debate, the political damage the president has suffered, and the difficult reelection prospects he faces have essentially erased any chance of substantial increases in investments in even the most desirable and worthwhile initiatives.

…The president’s American Jobs Act, which, presumably, the administration believes is politically feasible in the current environment, is quite modest and falls severely short of what would be required to foster significant progress in distressed communities. Even so, it is becoming evidently clear that the parts of the Act that are most critical to job creation in poor communities will not be approved by the current Congress. Furthermore, even if the president wins reelection, he is unlikely to have a Congress that would be willing to pass any kind of legislation that will come anywhere close to having a significant impact relative to the enormity of the crisis in distressed communities.

Clearly, waiting for the government is futile. So what is the alternative?

Obviously, we cannot simply throw up our hands, stand helplessly by, and watch yet another generation or more of ‘Abandoned’ black children grow up in “permanent underclass” status, trapped in vicious circles of poverty, despair, and dysfunction. While there are many organizations and individuals who are working selflessly and tirelessly to address the crisis, substantial resources are desperately needed to bring about the desired transformative impacts in distressed communities, which require increased investments in job creation and other initiatives such as early childhood education, parental education, after-school programs, remedial education, mentoring, job training, etc.

If such public investment is not likely anytime soon, the only realistic alternative is to develop more innovative strategies and effective initiatives through a coherent, proactive and collective “we-have-to-help-ourselves” approach on a large scale. An obvious mechanism for doing this is a national resource-pooling fund to finance initiatives that effectively address urgent and critically important economic, educational, and social problems in black communities.

For various reasons, despite decades of exhortations on the “need to pool our resources,” a large-scale nationwide resource-pooling effort has yet to materialize…”
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Excerpt from: Financing Black Progress, Part 2: A Self-Reliance “Marshall Plan”: Creating a National Resource-Pooling Fund

“…There are several resource-pooling initiatives in communities across the country, but they are small-scale and lack resources and clout. A national fund, however, would have the muscle and scope to efficiently galvanize the black community and mobilize resources on a massive scale and thereby accomplish objectives with greater effectiveness and transformational impact than small organizations. It could pool money from black individual and institutional investors to provide venture capital to black-owned businesses and entrepreneurial ventures that can provide jobs for people in distressed communities. And it could mobilize the substantial additional funds needed for the expansion and replication of innovative and proven initiatives that are already successful in addressing dire needs in education, health, housing, etc. in several communities nationwide.

Establishing such a fund would require collective buy-in, and a collective effort, from the wealthy, the black middle and upper classes, and affected communities to pool resources to finance initiatives that focus on the most urgent and critically important economic, educational, and social problems in black communities.

And African Americans do have the financial muscle to create this fund right now.

Call it the “National Venture & Excellence Fund” or “EXCEL Fund” for short.

Based on the mutual fund or investment club model, it would have both for-profit and non-profit arms to address various problems accordingly. The for-profit arm would focus on business investment and other entrepreneurial ventures that can create jobs and better economic opportunities for people in distressed communities. The non-profit arm would provide the additional funding that is desperately needed to expand early childhood education, academic achievement, mentoring, job training, and other initiatives that have already been proven to be highly successful in numerous communities. It would also engage in social entrepreneurship and innovation in areas critical to progress in distressed communities (education, health, housing, etc.).

The concept of a national resource-pooling fund is not new–it has been bounced around for years but has yet to materialize. This is apparently because those who proposed such initiatives lacked the requisite credibility to marshal the necessary support to get them established; or, perhaps the visionaries and entrepreneurs that had the wherewithal to set up and run such a fund concluded there were just too many difficult obstacles to overcome.

It is certainly not because African Americans would not be willing to invest in a reputable fund. There is a strong tradition and long history of philanthropy and “giving back” in the black community, such as financial contributions to churches, charity and community organizations, etc. …”

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