Financing Black Progress: On a Marshall Plan for the “Abandoned,” Self-Reliance, and “Pooling Our Resources” Through a National Fund
- Part 1: A Publicly Financed “Marshall Plan” Is Unrealistic, So What’s the Alternative? A “Self-Reliance Marshall Plan”?
- Part 2: A Self-Reliance “Marshall Plan”: Creating a National Resource-Pooling Fund
Given the current political environment and budgetary constraints, it is unrealistic to expect anything such as a “Marshall Plan for the Abandoned” — or similar proposals that call for massive public investment to address the urgent problems in our distressed communities — to be implemented. If waiting for the government is futile, 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. So what are the alternatives? The only other financing option is resource-pooling on a substantial scale in the African American community. Despite decades of exhortations on the “need to pool our resources,” a large-scale nationally galvanizing resource-pooling effort has yet to materialize. Recent developments and trends, however, indicate that the necessary elements are in place to overcome barriers and make this happen. Part 2 outlines how such a national “self-reliance” resource-pooling fund could be created.
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Part 2: A Self-Reliance “Marshall Plan”: Creating a National Resource-Pooling Fund
I quite agree that there is a great deal that the Negro can do to lift himself by his own bootstraps. Well has it been said by one that Negroes too often buy what they want and beg for what they need. Negroes must learn to practice systematic saving. They must also pool their economic resources through various cooperative enterprises. Such agencies as credit unions, savings and loan associations, and finance companies are needed in every Negro community. All of these are things that would serve to lift the economic level of the Negro which would in turn give him greater purchasing power. This increased purchasing power will inevitably make for better housing, better health standards, and for better educational standards. — Dr. Martin Luther King, Jr., 1958
[From: “Advice for Living,” The King Papers Project, The Martin Luther King, Jr. Research and Education Institute, Stanford University — http://mlk-kpp01.stanford.edu/primarydocuments/Vol4/Mar-1958_AdviceForLiving.pdf]
As discussed in Part 1, given the current political and economic environment and budgetary constraints, it is futile to expect substantial increases in public investment in even the most worthwhile initiatives that can help to bring about the transformation of distressed communities. Therefore, the only alternative is to proactively develop an innovative, collective self-reliance strategy through the establishment of 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. For example, a recent Prudential Financial survey (The African American Financial Experience) found that African Americans’ financial goals go beyond just increasing personal affluence or ensuring a secure retirement: they are “more likely than the general population to cite charitable donations as an important goal… Solidarity and concern for the financial health and wellbeing of the community is very strong among African American decision makers.”
A well-established and reputable fund would be able to attract substantial contributions from African Americans as long as they are confident that their contributions would be effectively utilized to solve problems in distressed communities, and especially if the fund’s investments, while creating jobs in these communities and fostering economic and social progress, would also provide them with some financial return in addition to social returns.
The challenge, then, is to create a plan that can overcome the likely hurdles and galvanize nationwide support to build such a fund. Recent trends in entrepreneurship, business development, and wealth-building in the black community strongly indicate that the necessary elements are in place to make this happen.
There already are strong positive trends with respect to greater awareness and heightened focus on entrepreneurship, investing, and wealth-building in the black community [see, for example, articles and reports on the “Entrepreneurship” and “Wealth-Building” pages at www.blackprogress.com]. According to the Census Bureau, the number of black-owned businesses in the US increased by 60.5% from 2002 to 2007, more than triple the national rate, and receipts generated by black-owned businesses increased by 55.1% to $137.5 billion. And there’s much evidence that opportunities for profitable business investment exist and are being successfully exploited in inner-cities and adjacent urban areas.
The Great Recession notwithstanding, there is a large population of well-off African Americans with high enough incomes and networth who want to contribute to progress in distressed communities, as the Prudential study clearly implies. They would therefore consider it worthwhile to invest in an EXCEL Fund if they are confident the Fund would be the best vehicle to enable them achieve this goal.
Furthermore, today’s (and future) ubiquitous and innovative social media, internet, and other information/communications infrastructures and networks would greatly facilitate the vigorous and powerful nationwide mobilization of African Americans, especially the younger generation, that is necessary for the Fund to grow and have a transformative impact.
Best of all, there’s a large and fast-growing cadre of visionary, highly-skilled, accomplished, and credible business and social entrepreneurs and leaders, from which can emerge a strong group that can build a well-structured EXCEL Fund and manage it with first-class professionalism.
It is therefore not unrealistic to envision a nationally captivating effort that overcomes the hurdles that have hampered the creation of national resource-pooling efforts to date and successfully galvanizes the necessary nationwide support.
Here’s one way this could happen:
It starts with nonpartisan and nonideological leadership. We know there are visionary and committed business and social entrepreneurs who are concerned enough to take on this leadership role, contribute significant amounts to the Fund, and help make it self-sustaining.
The common criticism of existing national ‘black progress’ organizations and their leaders – on both the left and the right – has been that many are increasingly unrepresentative of the views of most blacks, particularly the younger generation. Furthermore, many of the leaders are too burdened by political, ideological, and personal baggage to command the type of broad-based and large-scale support that is necessary for innovative and transformative action.
Thus, to overcome the barrier of prospective investors’ skepticism and distrust as to whether their contributions will be well-utilized, a nonpartisan and nonideological (or perhaps centrist) organization that is sponsored and managed by highly accomplished and reputable people, and is unencumbered by ideological and political baggage, would be best able to convince large numbers of African Americans to invest in the EXCEL Fund.
Clearly, a group of talented, motivated, and dedicated entrepreneurial visionaries who have strong credibility and proven records of accomplishment, and who engender trust and confidence, would be able to generate interest and enthusiasm among the black population and jump-start/run such a fund.
Call them the “Black Progress Innovators” (BPIs). And, of course, they exist in large numbers.
A few BPIs may be well-off enough to pool sufficient funds to jump-start the Fund all by themselves. However, most are more likely to have limited personal wealth. Such BPIs would pool whatever limited amounts of their own they can afford and, perhaps with supplementary contributions from other individuals and/or foundations, obtain the seed money for financing the initial groundwork required to get the organization started. They would prepare a credible and compelling business plan that spells out realistic goals and how the Fund will work to achieve them. Then, because they have unblemished reputations and strong records of achievement and demonstrated competence, they would be able to convince as few as five prominent and accomplished public figures to lend their credibility, prestige, and imprimatur to the effort.
These prominent people could be high-networth individuals, or highly-accomplished personalities who are not necessarily wealthy but command public respect and credibility by virtue of their accomplishments. Think entrepreneurs, corporate heavyweights, entertainment icons, sports personalities, academics, public servants, and other professionals, such as (to name only a few out of thousands): Oprah Winfrey, Colin Powell, Ken Chenault (American Express), Ursula Burns (Xerox), Richard Parsons (Citigroup; formerly Time Inc.), Earl Graves, Sr. (Black Enterprise), Vernon Jordan, William Raspberry, Desiree Rogers (Ebony/Jet), Bill Cosby, Ben Carson (Johns Hopkins brain surgeon), Henry Louis Gates Jr. (Harvard), Freeman Hrabowski (president, University of Maryland, Baltimore County), Neil deGrasse Tyson (astrophysicist), John Rogers, Alphonse “Buddy” Fletcher Jr., John Utendahl, Ruth Simmons (Brown University president), Kurt Schmoke (former Baltimore mayor), Morgan Freeman, Robert Johnson (BET founder), Tyra Banks, Russell Simmons, Jay Z, Will Smith, Denzel Washington, Magic Johnson, Bill Russell, Michael Jordan, etc.
Some of these personalities could choose to provide additional seed capital for the Fund but they do not necessarily have to make financial contributions. Simply by virtue of the respect they command, their motives and intentions will not be questioned, and their public expression of confidence in the Fund will therefore enable it to gain the instant credibility needed to counter the initial skepticism and mistrust that any prospective investor might have. For example, in 1997, General Colin Powell used his stellar reputation and huge popularity to establish and mobilize funding for America’s Promise Alliance.
Alternatively, rather than a group of BPIs having to convince them to back a fund, a few of these personalities could simply get together, set up a fund themselves, and get some highly competent people to run it. A recent example: in September 2011, New York City mayor Michael Bloomberg and philanthropist George Soros announced that their respective foundations will each contribute $30 million to a $127.5 million initiative (with the remaining amount to be provided by the City) to address the problems of education, poverty, health, unemployment, and incarceration among young black and Latino men in the city.
Once a strong team of BPIs and their backers is in place, the Fund would identify the potentially high-impact initiatives on which to focus – including those that make up for government shortfalls – in the most critical areas, e.g.: entrepreneurship, job creation, early childhood education, academic achievement, mentoring, job training, public campaigns to aggressively combat racial prejudice/hatred and stereotyping, and a think-tank that would generate ideas and innovative approaches, undertake research, and analyze and disseminate information in these and other critical areas.
The Fund would then utilize innovative strategies to build nationwide support from a large base of African Americans and thereby pool funds on a scale large enough to enable it have transformational impact in communities across the country.
There are, of course, many skeptics and naysayers who, for various reasons, doubt the feasibility of an EXCEL Fund. For example, some believe that most successful African Americans do not care about helping to address problems in distressed communities and would therefore not find it worthwhile to invest in such a fund. Thus, many conclude that, for this and other reasons — including, inter alia, blacks’ relative low networth, distrust of black leaders who have tried to launch such initiatives in the past, and a perceived lack of group cohesiveness and common purpose — financial resource-pooling on a large national scale for collective progress will remain very difficult in the black community as, they argue, has been the case for generations.
However, for decades, African Americans, including those who are not well-off, have consistently made contributions to churches and other organizations or initiatives they trust can make a difference in their communities, even during difficult economic times. Thus, as the Prudential study suggests, there is reason to believe that there is a significant proportion of African Americans that constitutes a large enough base that would be willing to make at least modest contributions to jump-start the Fund and ensure its success. A crucial prerequisite is that they must be confident that the Fund has the potential to successfully address the plight of those, especially children, who, sadly, remain trapped in distressed communities without much hope.
Furthermore, there are numerous “non-black” organizations and individuals who genuinely want to help foster progress in distressed communities and would want to invest in an innovative initiative that credibly demonstrates its potential to have a transformational impact.
Obviously, prospective investors must be assured that their investments will be well-utilized, which is why it is imperative that: (a) the Fund is sponsored and run by highly accomplished and respected people of high integrity; (b) its goals and plans are sound, credible, realistic, and clearly spelled out; and (c) it maintains a high level of transparency and accountability.
Even with an average contribution of only $25 per month by two million people (individual monthly contributions could range from as little as $5 to hundreds of dollars), the Fund would net $3 billion in five years.
With a sharp and dedicated focus, the Fund would foster job creation and educational achievement in distressed communities, especially through mentoring, training, and development of the large numbers of children trapped in these communities who desperately need such assistance, to ensure that they place greater value on academic excellence and refrain from criminal or other dysfunctional behaviors.
The benefits to contributors, financial and non-financial, would be vastly worth their investments, by helping to spur faster progress in distressed communities and thereby fostering the economic and social advancement of the race.
The creation of a national EXCEL Fund through aggressive resource pooling can be the 21st century self-reliance approach and solution to the unique challenges facing our community. Otherwise, the alternative is to just stand by — waiting for the government’s Marshall Plan that will never come — and watch yet another generation, or more, of black children in distressed communities waste away.
There are no obstacles in the framework described above for establishing an EXCEL Fund that are impossible to overcome. At least a few of the numerous BPIs out there will emerge to make it happen, so expect to see some form of an EXCEL Fund soon.
The views expressed in this article, a contribution by our special correspondent, are solely the author’s and do not necessarily represent those of BlackProgress.com or its affiliates and associates.