Our Black Year (32 page)

We buy John's clothes from Sean John, and he recently purchased a suit from Steve Harvey's new clothing line, the Steve Harvey Collection. We have a friend who is an independent reseller of J. Hilburn custom shirts, and she stops by John's home office. He doesn't even have to leave the house. We found a Black-owned shoe store with a selection for the whole family in Hyde Park, right down the street from Kimbark Liquors, which we still frequent when we need to restock our liquor cabinet.

Afriware Books moved to a less expensive location, but Nzingha is still around, and so is her Afro. This has been another benefit of The Empowerment Experiment: When we shop at Afriware, my daughters get to see another positive Black role model. That's no small thing.

Our home security company remains Black-owned Foscett's Communication and Alarm Co. of Chicago, and we still use Covenant Bank, an African American–owned institution a mere five miles away on the West Side. Twice a week we drive five miles in the opposite direction to Black-owned Evans Cleaners in Maywood. We still buy the gas cards and the McDonald's, Burger King, and Quiznos cards from Black-owned franchisees. For the rare times we go out for a nice romantic dinner, we stick to Park 52 and Market, both Black-owned. But a couple other options have turned up, including Fleming's in downtown Chicago and the five-star C-House, owned by Ethiopian celebrity chef Marcus Samuelsson, known for his philanthropic work and social justice activism in his homeland and for funding food justice and mentoring programs for urban youth in America.

And we keep our eyes open for other opportunities to do what Maria Stewart, Booker T. Washington, those resourceful heroes from the Black Wall Streets, and so many others before us have done. We're carrying on as best we can.

Couldn't do it any other way even if we wanted to. We're walking up this path now, forever.

M
IMA DIED AT HOME ON FEBRUARY 13, 2010, AT 2:46 p.m., while I begged her to live. She'd started a steep descent in mid-December, and by January I felt as if I was spending all my time on the phone, yelling at somebody—the doctors, the nurses, the hospice coordinator. It was my way of protecting Mima, and I was going to do so even if it killed me or anyone who crossed me.

E-mails, phone calls, messages, and invitations for The Empowerment Experiment were piling up since we completed our historic year. I ignored all of them during Mima's final weeks while I focused on managing her illness and shuttled between Chicago and Atlanta. My life and my family's life felt very frayed.

At this point the disease so ravaged Mima and she was so heavily sedated that I don't know what registered for her. But of this much I am sure: She hung in there until we had completed the year of EE. Although I did everything I could to help her, the overall lackluster outcome of our Black year made me wonder whether my time would have been better spent just being with her. It still weighs on me. The only consolation I have is that Mima survived with pancreatic cancer for nearly two years, a miraculous length of time.

In the first few months after her passing I kept thinking about the authenticity of her life, something I'd grown to appreciate after The
Empowerment Experiment ran its course. During that year I could have filled a house with all the pretension, deceit, and artificiality I encountered. The thought of her living with such purpose and unwavering love yields profound admiration in me. It always will.

Impervious to heartache, time passes. We buried Mima on February 17. The next day John and I returned home to the girls, to the harshest month of Chicago weather, and to whatever was next in the life of The Empowerment Experiment.

What followed—after making and fielding phone calls about Mima, responding to the condolences, and excavating the mountain of e-mails, phone messages, and other business for EE—was the report from the Kellogg School of Management at Northwestern University, twenty-nine pages that analyzed our adventure and offered a broader perspective. An uplifting compilation for the most part, it made us feel that we'd contributed by providing data for some academic gravitas that was, at the same time, anchored in the real world. The complete report can be found in the appendix, but here are a few of the highlights.

“Over the course of 2009,” the report states, “the Andersons made 513 purchases and spent approximately $48,943.” That total actually represented what you might consider spending money. If you include our mutual fund investments and other money we transferred to Black fund managers and financial institutions and deposits, we ended up “spending” about $94,000 that year in African American businesses that we otherwise wouldn't have.

It was especially interesting to see the pie chart (see appendix 2) indicating how we spent our money day to day at Black-owned businesses or elsewhere when we could not find a Black option. Our biggest expense, 37 percent, was child care. Automotive came in next at 18 percent, followed by restaurants at 11 percent. Almost as telling was the list of products and services that Black-owned businesses didn't offer—things like car seats, appliances, lawn treatment services, basketball shoes, cell phone service, utilities, bed sheets, hair clippers, a treadmill, and vitamins. Seeing
this in black and white made it all the more clear how barren the landscape is of African American businesses.

Calling business awareness “a significant hurdle,” the researchers encourage Black-owned businesses to “leverage on-line Black business search engines and ensure that their business websites clearly highlight Black ownership,” something with which Karriem might take issue. Word-of-mouth referrals are also important. In addition, the report urges Black-owned businesses to “maintain high levels of quality and service in order to capture and maintain” consumer awareness, determine service and product needs in predominantly African American communities, and establish neighborhood businesses to fill those needs. Black businesses should target “industries where there is severe Black owner underrepresentation,” which would offer entrepreneurs a unique advantage and a potentially lucrative opportunity, especially where their diversity can be seen as valuable and appealing.

That was pretty logical stuff, but my favorite part of the study is a little blue-shaded box buried in the back of the report (see appendix 2) where the researchers calculated the impact of all fifteen million Black households in the United States spending 2, 5, 10, and up to 68 percent of their after-tax income on Black-owned businesses. As discussed in chapter 5, a few pennies here and there can create tens, maybe hundreds of billions of dollars in economic empowerment for folks who could use it in productive ways.

“The Empowerment Experiment has laid the foundation for leveraging the economic power of the Black American consumer,” the report notes. “Although the breadth and depth of the experiment were limited, it reinforces key issues and opportunities within this large consumer base that have direct implications for the growth of Black entrepreneurs and ultimately for ‘self-help' economics.”

“Ultimately,” the report concludes, “successful execution of The Empowerment Experiment on a larger scale, consistently, throughout the nation will create generations of financial stability and wealth in the Black population that have yet to be achieved.”

The report brings up a key factor in empowering Black businesses: the importance of capital. Our friend Steven Rogers and others are aware
of this problem and discuss it in public forums. According to Rogers, few people know of the successful fund management companies dedicated to providing money to minority entrepreneurs and that those companies are profitable, safe places to put money to work. There is even a consortium of the most credible of these funds and equity investors, the National Association of Investment Companies, which includes Yucaipa Johnson, owned by business magnates Magic Johnson and Ron Burkle; John Rogers's Ariel Investments; and Goldman Sachs's Urban Investment Group Companies. For Black entrepreneurs and emergent businesses it is a network (and gold mine) of funding sources and venture capital firms specifically focused on creating and growing Black businesses. NAIC has successfully invested funds in
Essence
magazine, Black Entertainment Television, and TV and Radio One.

As proof of the consortium's performance, consider the 2003 report by the Ewing Marion Kauffman Foundation, which analyzed funds operated by NAIC and found that “investments in minority business enterprises resulted in healthy returns equal to, if not slightly higher than, traditional investments by mainstream venture capitalists.”

“We have to educate the White community,” Rogers told me, “the ones who are the holders of capital, that this is good business.... Look at investing in minority-owned businesses as a competitive advantage. Do it with the expectations of market rate returns, and one of the benefits will be social benefits. Don't do it from a philanthropic kind of mind-set. Every argument has to be an economic argument that says this is good for business.”

I couldn't agree more. It's supporting the Farmers Bests of the world versus the J's Fresh Meats. We want to support only those businesses that make the grade, which brings up another important point: training. As Rogers and other experts note, research shows that a lack of training—sometimes more often than a lack of capital—is a critical factor in why entrepreneurs fail. Entrepreneurial training for Black businesspeople can be achieved through partnerships, not charitable handouts. These partnerships—with universities or other institutions—can teach small businesses and entrepreneurs how to grow.

Based on what we've learned through The Empowerment Experiment, the best way to get started is by creating more Black-owned franchises of major consumer brands, including food and clothing stores, hotels, and household and professional services. We need to offer consumers convenient ways to make the small changes in their lives that result in economic empowerment for underserved neighborhoods. Sure, we want to establish Black-owned grocery stores, hotels, retailers, banks, and law and accounting firms, but let's begin with what already exists. Consider McDonald's, KFC, Foot Locker, and Jiffy Lube. The franchise model enables Black entrepreneurs to enter a market with a known commodity, consumer demand, and quality products.

Unfortunately, at the moment too few Black-owned franchises exist. The biggest hurdle is the initial investment required to acquire the franchise. But franchisors can help with that. At McDonald's, the most successful franchise in the world, I worked on this very issue, researching and presenting a report to senior management on the importance of franchisee diversity. That report offered strategies on recruiting, retaining, and establishing parity between the Black consumer base and the restaurant owners.

In fact, programs like this exist now and they work, but not enough companies have them, not enough money is being invested in them, and not enough attention is being paid to them. One fantastic example is Marriott's Franchise Diversity Initiative, in which the chain partners with the National Association of Black Hotel Owners, Operators and Developers (NABHOOD). Through it, in July 2011 Marriott had 586 women- and minority-owned hotels nationwide, including 126 owned by African Americans. That number surpassed the goal of the program, set in 2005, to have 500 women- and minority-owned hotels by 2010. The objective was part of a larger diversity agenda that included a pledge to spend $1 billion with minority suppliers, a goal Marriott has surpassed by $1.3 billion.

Another worthy program is New York Life's $50 billion Empowerment Plan that seeks to persuade two hundred thousand African American families to purchase at least $250,000 of life insurance. Yes, it's a savvy sales strategy, but that doesn't detract from its broader value. The idea, as New York Life states, is to show African Americans “how other cultures use life
insurance to protect income and to build multigenerational wealth.” The company wants to challenge Blacks “to be wealth creators, instead of wealth spenders.” However, the wealth creators are not just the consumers who are able to create and transfer wealth with life insurance and annuities; the $50 billion Empowerment Plan also calls for targeting Black entrepreneurs as agents and brokers: “New York Life's 900+ African American agents have pledged to help empower the communities they serve.” Eugene Mitchell, SVP of the African American Market Unit, describes these reps as “quasi business owners,” something akin to being a New York Life franchisee. In effect, the Black entrepreneurs, their families, and their neighborhoods reap the same benefits that occur when major franchisers recruit, train, and support Black franchisees. As an advocate for African American economic empowerment, I like that concept—a lot.

If other corporations, like Pepsico's KFC and Pizza Hut, Procter & Gamble, Toyota, Home Depot, Kmart, and The Athlete's Foot, were to allocate one-tenth of the money they spend on advertising to Black consumers on advertising to Black entrepreneurs, they would attract some of the most talented, driven, and hardworking franchisees, suppliers, and vendors on the planet. The money they would invest in training the new franchisees—which is what the companies would invest in any potential franchisee—along with offering financing, extended repayment periods, and that critical help with start-up costs—would get the attention of Black consumers, who would support those stores in big numbers. The same would happen if these firms were to put more money into finding Black suppliers and vendors or enabling quality Black companies that may not be big enough to serve as subcontractors or suppliers to their partners or their own suppliers. Progressive organizations engage in Tier 2 supplier diversity by requiring that their main suppliers meet certain levels of spending with minority suppliers.