Category Archives: Entrepreneurship

Leadership and Innovation in the New Civil Rights Movement: Impact Investing as a Main Cornerstone

Excerpt from:

Leadership and Innovation in the New Civil Rights Movement: Impact Investing as a Main Cornerstone. By Michael J. Isimbabi, Ph.D.  Emerging Practitioners in Philanthropy [EPIP.org] Blog. May 04, 2015.

…Given the limited public funding available even for proven, cost-effective initiatives (such as early childhood education), impact investing is increasingly gathering momentum as a means of addressing social problems.

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Nonetheless, it is unrealistic to expect that impact investment capital will be invested on scales large enough to have transformational impact in the communities where capital, especially equity, is most direly needed. Despite several examples of successful inner-city revitalization efforts in recent years, there remain significant negative perceptions and stereotypes of these environments. Also, many ventures that could have the most direct positive impact on poor communities tend to have high risk and provide relatively low financial returns. Furthermore, even as the impact investment market has grown, there is a disparity in opportunities for impact investing led by and for Black communities.

In order to attract substantial capital to under-resourced communities from impact investors as that market grows, the challenge is to devise feasible business models and strategies and provide persuasive evidence of investment opportunities that will appeal to different categories of impact investors. Some impact investors will accept very low, below-market financial returns if they are convinced a venture has the potential to have transformational social impact.

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So what are the alternatives to (futilely) waiting for the government?

This is where the leadership of visionary and entrepreneurial EPIP members can become a powerful force. Emerging social sector leaders can play a leadership role in the movement to ensure that venture-philanthropic capital flows to under-resourced communities, which, in the past, have either been exploited or ignored by other capital sources.

In my eBook, Pooling Our Resources to Foster Black Progress: An Entrepreneurship and Impact Investing Framework, I present a comprehensive framework for implementing such an approach through the establishment of a (primarily) for-profit venture-philanthropic impact investment fund, the Excellence and Ventures Transformation Fund (“EXCEL- TRANSFORM Fund”).

I argue in the book that the strong trends in impact investing provide a unique opportunity for African Americans to harness their resources on a substantial scale, through a vehicle such as the Fund. By investing in the Fund, African Americans will be able to more efficiently pool some of the money they already give away in the form of charitable giving – which is considerable – as impact investments in entrepreneurial ventures that will have greater impact compared to “traditional” charitable giving to nonprofits, many of which face challenges pertaining to cost-effectiveness and operational efficiency.

The Fund will be a vehicle for galvanizing large numbers, potentially millions, of African Americans as well as non-African Americans – philanthropic-minded individuals and organizations motivated by powerful altruistic, self-interest, and national progress reasons – to pool resources on a large national scale to transform under-resourced communities. ….

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Read the full article here:  

http://www.epip.org/leadership_and_innovation_in_the_new_civil_rights_movement_impact_investing_as_a_main_cornerstone

[Dr. Isimbabi is affiliated with this website.]

Baltimore and Beyond: Creating Opportunity in Places – Brookings Institution Forum

For links to Video, Audio & Transcript: http://www.brookings.edu/events/2015/05/21-baltimore-and-beyond

Informative and insightful forum hosted by the Brookings Institution’s Metropolitan Policy Program, “featuring hands-on experts to reflect on promising practices to help young people and families in distressed communities participate in an advanced economy that works for all.”

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May 21, 2015

Summary: “Recent events in Baltimore and St. Louis underscore the enduring challenges the nation faces in trying to create neighborhoods of opportunity amid entrenched poverty, long-term disinvestment, and stark racial divides. Baltimore was an early pioneer in applying new comprehensive approaches to neighborhood revitalization. Since then, the practice of joining people- and place-based strategies has evolved, driven by both public and private sector leaders. The Great Recession has reversed progress in some ways as unemployment, foreclosures, and stagnant wages increased poverty. As the nation now focuses on its struggling urban areas, it is critical to broadly examine what cities, counties, and the nation have learned since the redevelopment of Baltimore’s Sandtown-Winchester neighborhood….”

Featuring:

Welcome by Jennifer S. Vey, Fellow, Metropolitan Policy Program

Panel Discussion

Amy Liu (Moderator) — Co-Director and Senior Fellow, Metropolitan Policy Program

Derek Douglas — Vice President for Civic Engagement, The University of Chicago

Frederick B. (Bart) Harvey III — Former Chairman and Chief Executive Officer, Enterprise Community Partners

Joel Miranda — Director of Leadership Development and Graduate Leadership, YouthBuild USA

Donald Hinkle-Brown — President/CEO, The Reinvestment Fund

Michael Smith — Special Assistant to the President and Senior Director of Cabinet Affairs for ‘My Brother’s Keeper’, The White House

Related:

Los Angeles 1992 to Baltimore 2015: Washington’s Changed Response to Urban CrisisBruce Katz. Brookings Institution. May 27, 2015.

Beyond Baltimore: Building on What We Know to Create Neighborhood Opportunities. Amy Liu. Brookings Institution. May 12, 2015.

Yes, There Are Two Baltimores. Jennifer S. Vey and Alan Berube. Brookings Institution. May 15, 2015.

Good Fortune, Dire Poverty, and Inequality in Baltimore: An American Story. Alan Berube and Brad McDearman. Brookings Institution. May 11, 2015.

 

Closing the Racial Wealth Gap – The 2015 Color of Wealth Summit

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The 2015 Color of Wealth Summit, organized by the Center for Global Policy Solutions (CGPS) and the Insight Center for Community Economic Development (ICCED), was held at the US Capitol in Washington, DC on April 30, 2015.

The annual summit seeks to “engage Members of Congress, Congressional staff, the media, and the public in a dialogue about the racial wealth gap, its effect on marginalized households, its impact on the U.S. economy, and solutions for closing the gap.”

The informative and insightful sessions featured, among others: Members of Congress, policy researchers, economists, academics, and nonprofit, community development, financial and media professionals.

Watch videos of sessions here: http://globalpolicysolutions.org/2015colorofwealthsummit/

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Pooling Our Resources to Foster Black Progress: An Entrepreneurship and Impact Investing Framework

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Check out the new book, Pooling Our Resources to Foster Black Progress: An Entrepreneurship and Impact Investing Framework. The book:

  • Examines the great potential with respect to the powerful nexus among: black earning/buying/investing power, philanthropy and resource-pooling, buying/banking black, entrepreneurship, business development, job creation, wealth-building, and economic and social progress 
  • Shows how a potent, large-scale resource-pooling vehicle with a comprehensive framework that is able to harness this potential, especially with the galvanizing power of online and social media, can have immense impact 
  • Presents a framework for establishing such an initiative, in the form of a national impact investment fund — the “Excellence and Ventures Transformation Fund” (or “EXCEL-TRANSFORM Fund”) — that would address unemployment and poverty and help finish the “unfinished business” of the civil rights movement.

[Full disclosure: the author, Dr. Michael Isimbabi, a finance and energy industry professional, consultant, and former professor of finance, is affiliated with this website.]

Look inside the book (the first 10%) for free and get it here (at Amazon.com): http://www.amazon.com/POOLING-RESOURCES-FOSTER-BLACK-PROGRESS-ebook/dp/B00HTWJ8BY.

Also join the discussion on the feasibility and establishment of the EXCEL-TRANSFORM Fund, innovative strategies for self-reliant resource-pooling, and related philanthropy, entrepreneurship, impact investing and empowerment issues at the book’s website, www.PoolingOurResources.com, and Google Plus.

The Racial Wealth Gap: Recent Studies

Less Than Equal: Racial Disparities in Wealth Accumulation. Signe-Mary McKernan, Caroline Ratcliffe, C. Eugene Steuerle & Sisi Zhang. Urban Institute. April 2013. 

When it comes to economic gaps between whites and communities of color in the United States, income inequality tells part of the story. But let’s not forget about wealth. Wealth isn’t just money in the bank, it’s insurance against tough times, tuition to get a better education and a better job, savings to retire on, and a springboard into the middle class. In short, wealth translates into opportunity.

…How Did the Great Recession Affect Wealth, and Who Lost the Most? While the Great Recession didn’t cause the wealth disparities between whites and minorities, it did exacerbate them. The 2007–09 recession brought about sharp declines in the wealth of white, black, and Hispanic families alike, but Hispanics experienced the largest decline. Lower home values account for much of Hispanics’ wealth loss, while retirement accounts are where blacks were hit hardest….

How Do We Fix This? Families of color were disproportionately affected by the recession. However, the fact that they were not on good wealth-building paths before this financial crisis calls into question whether a whole range of policies (from tax to safety net) have actually been helping minorities get ahead in the modern economy. More fundamentally, it raises the question of whether social welfare policies pay too little attention to wealth building and mobility relative to consumption and income….

…A common misconception is that poor or even low-income families cannot save. Research and evidence from savings programs shows they can. When we examined families living below the poverty level, we found that over a decade more than 40 percent were able to increase their networth and save enough to escape asset poverty—in other words, they had enough assets to live at the poverty level for three months without income (about $3,000 for an individual and $6,000 for a family of four). The federal government spends hundreds of billions of dollars each year to support long-term asset development. But these asset building subsidies primarily benefit high income families, while low-income families receive next to nothing. Reforming policies like the mortgage interest tax deduction so it benefits all families, and helping families enroll in automatic savings vehicles, will help improve wealth inequality and promote saving opportunities for all Americans.

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How America Built the Racial Wealth Gap. Lawrence D. Bobo. April 9, 2013.  Straight Up: Will leaders ever step up to fix the mess that social policy and our checkered past created?

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The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide. Thomas Shapiro, Tatjana Meschede and Sam Osoro. Research and Policy Brief. February 2013. Institute on Assets & Social Policy. Brandeis University.

KEY FINDINGS:

1. Tracing the same households over 25 years, the total wealth gap between white and African-American families nearly triples, increasing from $85,000 in 1984 to $236,500 in 2009.

2. The biggest drivers of the growing racial wealth gap are: • Years of homeownership • Household income • Unemployment, which is much more prominent among AfricanAmerican families • A college education • Inheritance, financial supports by families or friends, and preexisting family wealth

3. Equal achievements, such as income gains, yield unequal wealth rewards for whites and African-Americans.

 

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Closing the Racial Wealth Gap Initiative – Publications and Materials. Insight Center for Community Economic Development.

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Lisa Hall, President/CEO of Calvert Foundation, on the Potential of Impact Investing to Transform Underserved Communities

Excerpts: Lisa Hall, President/CEO of Calvert Foundation, on the potential of impact investing to transform underserved communities

LisaHall-239x164Lisa Hall of the Calvert Foundation on Impact Investing: An In-depth Interview. Forbes.com. October 20, 2011.

….Rahim Kanani: How can we convince traditional investors to reevaluate their portfolios and consider social impact investing?

Lisa Hall: I thought about this a lot at the Congressional Black Caucus Foundation’s annual conference, where I spoke about impact investing and the widening wealth gap. During the past few years, our economy has suffered greatly and yet the wealth keeps building at the top. Impact investment creates a virtuous circle of empowerment, opportunity, and engagement by connecting investors, underprivileged individuals, and communities. We need more people to get involved in impact investing because it is a critical part of the solution to closing the wealth gap. ….

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Lisa Hall on How Calvert Foundation is Democratizing Impact Investing. Forbes.com. December 17, 2012.

Sixteen years ago, Calvert Foundation was born of a seemingly improbable idea: using investment dollars to help end poverty.

Today, investment banks describe impact investing as an “emerging asset class”;… the impact investing market is estimated to raise at least $500 billion in the next decade;…and according to Calvert Foundation’s recent research survey, 72 percent of financial advisors are interested in offering impact investing products to clients….

Impact investing is undoubtedly an idea whose time has come. As budgets of philanthropies and governments have shrunk, investment capital has come to be recognized as a tool that can address some of the world’s most pressing problems.…..

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BET Founder Robert L. Johnson’s “RLJ Rule” to Increase Employment Opportunities for African Americans

Robert-L.-Johnson-CNBCRobert L. Johnson Urges President Obama to Encourage U.S. Businesses to Adopt Version of the NFL Rooney Rule for Employment. News Release. Rljcompanies.com. December 17, 2012.

Robert L. Johnson, chairman of The RLJ Companies and founder of Black Entertainment Television (BET) today calls on President Barack Obama to renew his commitment in addressing the employment gap between African Americans and White Americans, by encouraging U.S. corporations to adopt the RLJ Rule to address the overwhelming gap in unemployment.

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Stephen DeBerry on the Power of Impact Investing to Foster Black Progress

16535_200_150One of the very interesting presentations at the Innovation and Impact Forum for Black Male Achievement conference, held October 3, 2012 in New York City, was on the transformational potential of “impact investing” by Stephen DeBerry, Founder and Chief Investment Officer at Bronze Investments and a partner at Kapor Capital

According to his bio, DeBerry “makes and manages investments that align strong financial returns with positive social impact.”

Watch his full presentation here: Stephen DeBerry: Power of Impact Investing & Technology.

Related:

The BlackProgress.com essay, Financing Black Progress, Part 2: A Self-Reliance “Marshall Plan”: Creating a National Resource-Pooling Fund, discusses impact investing in the context of a national resource-pooling “impact fund” that can attract investments from millions of black investors.

See also: Pooling Our Resources on a Large, Transformative Scale: Breaking Through the Trust Barrier

Perspectives on Buying Black

Maggie Anderson tells the story of her family’s pledge to buy black for an entire year in Our Black Year: One Family’s Quest to Buy Black in America’s Racially Divided Economy. [See links to media coverage of the book here.]

The Andersons’ endeavor evolved into The Empowerment Experiment, which “converts our family’s pledge into a positive awareness campaign about the need for strategic entrepreneurship and conscious consumerism in and to benefit the Black community.”

Ms. Anderson provides an excerpt from the book in Black Enterprise (July 2012): How To Buy Black (“14 strategies for conducting your own empowerment experiment”).  Continue reading

Emerging Trends in Collaborative Black Philanthropy: The First Head and Heart Philanthropy Summit

From BlackGivesBack.com 

On August 10-11, 2012, nonprofit executives, foundation leaders and philanthropists convened at the inaugural Annual Head and Heart Philanthropy Summit in Martha’s Vineyard, MA, “for learning, professional networking and idea generation.”

The invitation-only summit was organized by Christal M. Jackson, founder of Jackson and Associates Group, LLC, a boutique fund development and philanthropic consulting firm, who noted: “…Given the serious issues facing our community, we must begin to collaborate for greater impact to create systemic change.”  Continue reading