Relationships and wealth are staples of community influence. Without both Blacks will never be full contributors to the priorities of a community. For us to create systemic change, we need to add wealthy Blacks to the tables with wealthy whites helping to determine how communities function, how decisions are made, and how priorities are set. We need Black people seated at the table discussing issues and making lasting decisions as co-leaders.
The community is being crafted by the few at this table. The real influence, in most situations, comes from the owners of businesses that have been around for generations. We can debate if this is how things should work, but this is how they do work. Longevity and relationships are a part of why these leaders of privately held businesses are able to influence decisions; their accumulated wealth is another.
I realize it is easier to recognize the reasons to address police brutality and poor-performing schools than to see the need to enable Black wealth. We must refuse to accept either/or answers to complex problems of race in the country. In this case, the solution is both. We must address the many issues of human suffering and also engage in all levels of success for Blacks. There is a compelling case for supporting the small percentage of Black entrepreneurs with scalable business models.
In discussions about Black businesses, too often the conversation is only about businesses that are small and struggling. The messages lean toward supporting these businesses in social service terms as if they’re attempting to care for them instead of enabling them for success. The focus is not on economic development and job creation, and it’s surely not on driving generational wealth. By thinking solely about very small businesses, we miss a big opportunity when it comes to closing the equity gap. There is a reality to business some don’t realize, and others choose to ignore. The fact is that 98% of all businesses, regardless of the race of the owners, have fewer than twenty employees. And of those businesses with employees, the average employee count is four.
It may sound elitist to some but take a closer look. Supporting a select segment of business owners is not a new concept. Communities have always supported the relatively small percentage of entrepreneurs with significant growth aspirations. Supporting particular types of businesses manifest itself in various tax incentives, public-private partnerships, and job creation credits. The Paycheck Protection Program (PPP) is a recent example. Some believe the PPP is the most significant transfer of wealth from the government to the private sector in decades. I am simply suggesting we become more intentional about Black entrepreneurs. A focus on Black entrepreneurs means equitably enabling Blacks to build businesses that create significant jobs, make capital investments, and, yes, build significant personal wealth. Why should blacks only be supported to grow small businesses?
Adding the discussion of Black wealth to any conversation is tricky yet critical to making systemic change. This is a nuanced message I want to convey to you. The opportunity of Black entrepreneurship— and the community influence and multigenerational wealth that follows—is too important to leave out of our set of solutions. Right now, almost half of black families are more likely to “inherit” poverty than any level of wealth. Growing scalable black businesses is unlikely to happen without an intentional effort and entrepreneurship is the most powerful approach to wealth creation. As a matter of fact, private business is the largest single investment of those with the top 1% of wealth. Of course, they invest in the stock market and other kinds of investments, but the largest portion (42% of their wealth) is retained in the businesses they own.
To clarify, I’m not saying wealth is the only way to make meaningful changes that improve our communities. I am saying wealth and influence are linked, and business ownership is the catalyst to both. Wealth creates influence, and longevity enables the long-term thinking and commitment needed for deep investment and lasting change.
I challenge you to take stock of the landscape of activities you would describe as pursuing racial equity. How many of those efforts are focused on equitable opportunities to create wealth? My experience tells me few if any. Communities will realize many other benefits of having more Black-owned businesses creating significant wealth. Wealthy Blacks engage in philanthropy at higher levels than others. They serve as mentors, inspirations of possibility, and developers of talent. They do their part to set the stage for more opportunity, different perspectives, and increased empathy. As catalysts, Black entrepreneurs are an important signal of a community’s intent. Scalable, wealth-creating, multi-generational black businesses are in all our interests.
People, companies and communities who say they are serious about racial equity must add a specific plan to grow large, multi-generational black businesses. If the goal is equity, specifically focusing on building wealth-creating Black-owned businesses is not just important; it is imperative.
Mel Gravely is the author of the new book, Dear White Friend: The Realities of Race, the Power of Relationships and Our Path to Equity. He is the majority owner and CEO of a commercial construction company in Cincinnati, Ohio.