MONEY – Economic Opportunity, Financial Inclusion, Access to Capital. Call it what you want but it’s all pretty much the same thing – it comes down to dollars.

Put your money where your mouth is. If you truly have a strong conviction for something, then this shouldn’t be a problem. Not charity, not donations. That is all temporary and not really sustainable.

You will have a consistent impact by making the conscious choice to be more inclusive in your everyday consumer spending habits.

If you take nothing else away from this article, remember that.

No, but seriously. It really all comes down to money. Why do you think Martin Luther King was killed?

Perhaps more context is in order.

History of Race & Economics in America in One Paragraph

• 1492: Europeans (Christopher Columbus) came to America in pursuit of more economic opportunity. They got it by taking over land and systematically slaughtering Native Americans.
• 1776 – 1835: U.S was officially founded via the Constitution and slavery was legal until passage of 13th Amendment.
• 1835 – 1960s: Reconstruction Era/Jim Crow – Even though slavery was deemed illegal, whites terrorized blacks and there was widespread segregation and inequality.
• 1930s-1968: The New Deal created enormous amounts of wealth by making homeownership easier for white people. Banks specifically excluded black people from obtaining home loans through redlining (read the Color of Law).
• 1968 – Present: Despite the passage of the Fair Housing Act in 1968, the primary vehicle for wealth creation, home ownership, is difficult to obtain for a number of reasons:
  • Black people being robbed of the chance to compound wealth over hundreds of years (Black Banks: The Color of Money).
  • Discriminatory lending practices by some banks persist.
  • Unequal treatment by some real estate agents.
  • Lack of Equal Access to Capital by Black Business Owners.
  • Unequal hiring and advancement opportunities in corporate America

This all ties back to money. So what’s the solution? Wait for it…money. Who has all the money? Banks.

Why Banks are Instrumental in Helping Black Owned Businesses

We’re going to make this as short as possible. For a more thorough explanation, again, you should really read Black Banks: The Color of Money. Some overpaid consultants also produced the chart below.

• Capital: Black Banks & Black Owned Mortgage Lenders make small business and home loans to minorities.
• Home Ownership leads to generational wealth creation. Black Entrepreneurs create wealth for themselves and others.
• These banks, new homeowners and entrepreneurs re-invest into their community via property taxes that go to their local schools, mentoring other entrepreneurs, and making more loans to black people. It’s a virtuous cycle.
• But banks are running out of money and closing at an alarming rate.

So now, the million dollar question on how best to support black owned companies and entrepreneurs?

Companies:

• They have all the money. Imagine if they put a tiny fraction of their assets into black banks. That’s exactly what Netflix has done. We need more companies to follow suit.
• Hiring: A) Many companies don’t hire enough black people to begin with and B) once they do, they stifle their advancement. The lack of diversity in the upper ranks of the Fortune 500 is absurd.

Individuals:

Everyday spending: Support black owned businesses in person and online: Restaurants, clothing, tax pros, etc…you can view any number of directories listing black owned businesses such as this one, this one or this one.

One Time: If you really want to support black businesses and entrepreneurs, then you should work with a great black real estate agent and/or secure a home loan from a black owned mortgage lender.

And the best part? It costs you nothing. As a home buyer, the home seller pays the commission for both their agent(the listing agent) and your agent (the buyer’s agent).

Make no mistake about it, real estate agents are entrepreneurs, not employees. They fill out 1099s because they are independent contractors.

Secondly, banks make their money via the interest generated from loans. Depositing a fraction of your money into one really won’t move the needle unless you’re a large company. But if you take out a 30yr loan for 350K, that makes a world of difference. So long as the terms are the same (down payment and interest), it should be an easy decision.

Can you make the case that this article is self-serving? Absolutely, we couldn’t be any more biased. It doesn’t mean that we’re wrong.