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The Cosby Challenge:
Resource-Pooling Strategies for Black Economic and Educational Progress
Michael J. Isimbabi, Ph.D.
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First draft: 20 July 2004. This draft: 02 August 2004
Copyright © 2004. Capital Researchers LLC & Michael J. Isimbabi
This essay discusses a framework for establishing National Venture Capital and Educational Excellence/Anti-Stereotype Funds that can pool resources on a massive national scale from middle- and upper-class blacks (and nonblacks) to foster black progress.
The intensity of the reaction to the "Cosby Indictment" and the consequent calls to action1 suggest that the time may finally be ripe for the implementation of a strategy that many have advocated over the years but has yet to materialize: resource-pooling on a massive scale nationwide by middle- and upper-class blacks to collectively address urgent economic, educational, and social problems in the black community.
In an essay published in 1997, I examined the feasibility of a for-profit fund that would pool capital largely from black individual and institutional investors to provide direly-needed venture capital to black-owned and inner-city businesses.2 A revised and updated version of the essay,"Capital, Entrepreneurship, and Black Progress: Harnessing Black Financial Power Through a National Venture Capital Fund", is available on the blackprogress.net website.3 In the essay, I argue that, in light of developments and trends in the black community with respect to investing, entrepreneurship, and inner-city business development, such a "VC Fund" is feasible. I also outline a strategy that, by providing adequate financial and social returns to investors, would make the Fund successful in harnessing the substantial, but largely untapped, financial power of middle- and upper-income blacks for economic development.
Over the last decade, several "Financial/Economic Empowerment" and "Black Wealth" initiatives have been established by organizations such as Black Enterprise, the National Urban League (NUL), the National Center for Neighborhood Enterprise (NCNE), Operation Hope, BET, the NAACP, the Congressional Black Caucus, and others.4 Also, numerous wealth-building and entrepreneurship books directed at African Americans, such as BlackEnterprise's Book Series,5 have been published. Consequently, there has been a substantial increase in the level of awareness of the crucial need for investing, entrepreneurship, and wealth-building in the black community. These positive developments -- the substantial rise in black entrepreneurship and wealth-building efforts; increased profitable opportunities for, and consequent interest in, inner-city business development; etc. -- further bolster the case for the feasibility of a VC Fund. Such a fund could, for instance, take good advantage of tax incentive-based economic development initiatives such as the Treasury Department’s New Markets Tax Credit (NMTC) Program6 to invest in low-income inner-city and rural communities.
In the same vein, an educational and social analogue of the VC Fund, a "National Excellence & Anti-Stereotype Fund" ("EXCEL Fund"), would pool funds to finance initiatives that foster:
Of course, over the years, several ideas along the lines of VC and EXCEL Funds have been proposed but no initiatives on a substantive national scale have emerged. This is apparently because even visionary business and social entrepreneurs have had doubts about the feasibility of such initiatives. It now appears, however, that the extensive discourse triggered by Dr. Cosby's call to action can galvanize interest in, and provide the critical impetus for, the establishment of such resource-pooling initiatives.
What is clear from the reaction to Dr. Cosby's statements is that there is almost universal agreement on the imperative for a "self-reliance action plan" involving collective efforts by the black middle and upper classes. And there is, of course, much evidence that most successful blacks are willing to help fund credible and effective programs as long as they are convinced that their efforts will substantively improve conditions for poorer blacks, especially "at-risk" children with limited opportunities. Aside from altruistic considerations or a sense of obligation to help foster the progress of the race, there are purely self-interest reasons, namely the high "social returns" they will obtain from their investments. Clearly, antisocial or criminal behavior by a segment of the black population will continue to have a significant and pervasive adverse impact on all blacks regardless of class or national origin—i.e., racial stigma and prejudice, negative stereotyping, racial profiling, and the associated adverse economic, health, and social consequences.
While the debate on the underlying factors responsible for the ills highlighted by Dr. Cosby may never end, there is little disagreement -- even between black liberals and black conservatives -- about what needs to be done. This includes campaigns and programs that address interrelated problems, as appropriate for different circumstances and communities, such as:
To be sure, many individuals and organizations have been toiling, largely unheralded, in communities across the country to address these problems through after-school, mentoring, and other programs. And, for several years, prominent black columnists, commentators, and activists -- liberal, moderate, and conservative -- have stressed the need for educational excellence and the strong cultural values in the black community that traditionally have emphasized educational achievement as the foundation for black progress.8 For example:
Clearly, while these efforts have done much good, they remain of limited scope and scale and collectively do not meet the enormous need that exists, hence the persistence and pervasiveness, at alarming levels, of the pathologies that Dr. Cosby and others have decried. Chicago Tribune columnist Clarence Page characterizes the challenge, citing the example of the difficulties faced by College Bound Inc., "a wonderful little 13-year-old volunteer program", as follows:11
"[College Bound] pairs underprivileged, but promising, District of Columbia high school students with college-educated adult volunteers who mentor the kids through SAT preparation, scholarship applications and all of the other ins-and-outs of college preparation.
You can find mentoring programs like this in just about every city. We need more. They also need more volunteers. As Kpakpundu Ezeze, board chairman of College Bound, said: "We could serve more kids if we had some more adult volunteers."
That's right. You don't need Cosby's millions to help the next generation grow up with the right values. A little time, attention and advice can go a long way, especially when many of today's kids are not receiving enough of it anyplace else.
I'm glad Cosby realizes that his critics were right about one thing: It is not just the "lower economic people" who are failing to parent their children properly and steer them, as Jesse Jackson says, away from dope and up toward hope.
As the West African proverb says, it takes a village."
To be sure, as Mr. Page and Cosby’s critics have noted,12 collective self-reliance initiatives should not obviate the crucial need for better public policies, especially higher levels of public investment in programs that have been proven to be effective in fostering children’s educational and social development. Others also insist that wealthy African Americans have a responsibility to make more substantial investments in poor black communities. For example, in reaction to Cosby’s statements, syndicated columnist and University of Maryland professor Ronald Walters observes:13
"Our new Black middle class is not investing their money and time in politics, but in creature comforts - then they turn around and complain about the lack of ''accountability'' from Black leaders...
There is plenty of blame to go around, but most especially, we have little economic leadership from those Blacks with money and no sense of strategy and priority in the use of their growing and substantial economic resources...
I think we have not sufficiently made a demand upon the Michael Jordans or P. Diddys because we have the mind-set that someone else should pay for our freedom while they do what they want...
If Oprah Winfrey, for instance, with her billions, had the correct mind-set, she could endow the entire infrastructure of the Black leadership with what to her would be relatively minor assets. Then, we wouldn't have to go to the corporate barons - the very people who, in many cases we are fighting - for financial support. We could plan and strategize with a sense of security that our goals and our methods were our own and that they couldn't be stopped so easily by the lack of financial support...
In short, if the entertainers, Black businesses and athletes funded projects in their own communities, the culture of the community would reflect a positive set of values rather than the dangerous, thug-infested values that now infect it in too many places."
As many have suggested, even with limited resources, individuals or small groups could pool resources to solve problems, especially those that government programs cannot adequately address. However, for this to happen on a sufficiently large scale in all communities that direly need the programs across the country, nationwide educational and informational campaigns and support networks are necessary. In this regard, the need for a massive, nationwide galvanizing effort is obvious.
Properly structured and managed, VC and EXCEL Funds that are based on the mutual fund or investment club model would be efficient vehicles for pooling modest amounts from millions of successful blacks to finance programs nationwide. A national VC or EXCEL Fund that is backed and promoted by prominent, successful, and well-respected people would have the requisite strength, fundraising ability, wide scope, scale economies, and efficiency to enable it accomplish objectives with much more effectiveness and impact than small, scattered, ad-hoc organizations.
The suggested approach is premised on clear evidence that there is a substantial but largely untapped potential source of funding – i.e., successful blacks -- for financing such initiatives. Thus, what is needed is a highly potent and empowering strategy with a compelling message and a robust and credible plan that shows that pooled funds will be efficiently utilized to achieve the goal that everyone desires, i.e., eradication of the pathologies that afflict a minority but damage the whole race and hamper black progress.
The obvious factors that are critical to the success of a VC or EXCEL Fund include:
Of course, this is where highly respected personalities such as Dr. Cosby could have a crucial impact, by using their considerable reputation and popularity to help jump-start and publicize the Fund, much like General Colin Powell did to found "America's Promise" (www.americaspromise.org) in 1997.Thereafter, with strong and innovative management that results in substantive, highly visible, and well-publicized accomplishments, the Fund could become self-sustaining by pooling modest amounts from the black community as well as nonblacks. There are numerous highly accomplished, competent, and entrepreneurial individuals who would enthusiastically jump at the opportunity, and even consider it a great privilege, to manage such a fund.
There is, of course, no reason why existing organizations across the political and ideological spectrums -- the NAACP, NUL, Rainbow/PUSH, National Action Network, National Black United Fund, Operation Hope, NCNE, Project 21, Center for New Black Leadership, Congress for Racial Equality, etc. -- cannot put together coalitions and set up initiatives such as VC and EXCEL Funds.With visionary social entrepreneurs who can come up with fresh thinking and new approaches, these organizations can develop and implement innovative and entrepreneurial strategies that will appeal to large segments of the black (and nonblack) population.
Ideally, black conservatives and liberals could set aside their differences and pool resources to launch a vigorous nationwide campaign for action on initiatives that everyone agrees are necessary. Such a broad-based coalition would be the most potent means of promoting the virtues of academic achievement, entrepreneurship, savings and investment, etc. in the black community, and would reflect the views of the vast majority of African Americans. The very fact that prominent conservatives and liberals are able to come together on a national level to address the issues that are most critical for black progress will cause strong and positive reverberations in the black community as well as the political, policy, and business communitiesnationwide. Sadly, given the ideological and partisan rancor and bad blood between liberals and conservatives, especially in an election year, this obviously will not happen.
A common criticism of existing organizations and their leaders -- on both the left and the right -- is that most are unrepresentative of the views of most blacks (particularly the younger generation). This is partly because they have to adhere to the dictates of their respective ideological and political establishments, which are sometimes not in the interest of the black community at large. Thus, these organizations’ leaderships may have difficulty galvanizing massive, nationwide resource-pooling efforts. Therefore, a centrist organization that is unencumbered by ideological and political baggage would be best-placed to pool funds from the growing ‘silent majority’ of African Americans that is more interested in pragmatic solutions to problems than in ideological and partisan intransigence.
Ideally, an EXCEL Fund would be set up by a group of visionary and dedicated independents and centrists/moderates who do not have strong political and ideological affiliations. While a wealthy benefactor may not be necessary, a strong, highly visible, and reputable group of initial sponsors – prominent and highly-respected individuals and organizations – would be needed to provide and/or help to raise the seed funding required to jump-start the Fund and publicize it nationwide. In this regard, well-known and respected black media, entertainment, and business professionals would play a critical role. (Dr. Cosby could take the lead here, much like Gen. Powell did for "America's Promise".)
Through a few carefully chosen and highly visible activities initially, the Fund can demonstrate the substantial potential impact it could have with more resources. This would in turn spur interest and financial contributions by the black community and some nonblacks as well.
An EXCEL Fund's activities could include the following:
The challenge therefore is to get some prominent and high-networth individuals and organizations interested enough to provide seed capital, and then have them agree on the broad strategies of the Fund. Obviously, the key question is whether the Fund would be able to attract enough financial contributions to enable it to have a significant impact. Is there a sufficiently large population of blacks who are concerned enough to contribute significant amounts to the Fund and make it self-sustaining without a wealthy benefactor? If the reaction to the "Cosby Indictment" and the pervasive angst over racial stigma and stereotyping -- e.g., as manifested in racial profiling in recent years -- are any indication, there clearly is. And there certainly are visionary and committed business and social entrepreneurs who can take the lead.
------------------1. Links to sources of information on Dr. Cosby's statements and several commentaries and critiques are provided at: http://www.blackprogress.net/cosby-indictment.htm. 2. Links to several reports, articles, etc. on black entrepreneurship, inner-city business development, and the "capital access problem" are provided at: http://www.blackprogress.net/business-entrep.htm. 3. http://www.blackprogress.net/capital.html. 4. Links to the websites of major initiatives and related articles, books, etc. can be accessed at: http://www.blackprogress.net/wealth-building.htm.
5.http://www.blackenterprise.com/Pageopen.asp?Source=Articles/01302001293.htm 6. http://www.cdfifund.gov/programs/programs.asp?programID=5 7. Glenn C. Loury discusses at length racial stigma and stereotypes in relation to black progress, in: The Anatomy of Racial Inequality (Harvard University Press, 2003). See also: Race & Inequality: An Exchange. J. L. A. Garcia, John McWhorter, and Glenn C. Loury. First Things, May 2002. 8. Links to the websites of "Educational Excellence" initiatives and several related articles, books, and other documents are provided at: http://www.blackprogress.net/education-excellence.htm. 9. "Campaign for African American Achievement", National Urban League (http://www.nul.org/caaa/caaa/index.html). In his book, Achievement Matters: Getting Your Child the Best Education Possible (Kensington, 2002), former NUL president Hugh Price advocates greater parental involvement in children’s education in order to foster a culture of achievement and public schools’ accountability.) 10. NAACP Education Web Page: http://www.naacp.org/work/education/edunews.shtml 11. Clarence Page, "What Bill Cosby Meant to Say", Chicago Tribune, May 30, 2004. 12. See, for example: Clarence Page, "Cosby's 'deal' to quell poverty cuts both ways," Chicago Tribune, July 11, 2004; Julianne Malveaux, "How Long? Cosby, Brown and Racial Progress", Black Issues in Higher Education, June 17, 2004; Theodore M. Shaw, "Beyond What Bill Cosby Said," The Washington Post, May 27, 2004. 13. Ron Walters, "Bill Cosby Part II: Bill Cosby and His Pals Could Do More". http://www.capitaloutlook.com/columns/opinions3.html
02 August 2004
Copyright © 2004. Capital Researchers LLC & Michael J. Isimbabi