Finding ways to create a more equitable and inclusive business climate in urban areas has been a goal of activists all summer. Finding the funding is more challenging.
On Monday in Newark, Mayor Ras Baraka announced the city and partners have been promised $2 million to create the “NWK FAM Fund” — a program aimed at putting capital in the hands of Black and Latinx business owners.
The new investment vehicle — short for “Newark 40 Acres and a Mule Fund” — aims to combat and reduce social and economic inequalities resulting from systemic racism.
The program, backed by prominent Black and Latinx investors, as well as leading corporate and philanthropic institutions, hopes to raise $100 million in investible capital, including $10 million by the end of the year.
“Black Lives Matter is not rhetoric, it’s a statement of action,” Baraka said. “It’s more than just eliminating racist behavior and inequality in our justice system; it’s about creating equality and opportunity for our black and brown communities.”
Officials said AT&T, Shaquille O’Neal, Panasonic, Carlos Medina, Nelson Mullins law firm, New Jersey Community Capital, Public Service Enterprise Group and Popular Bank are the first of the investors and corporate partners.
The fund also has an advisory board that consists of prominent financial, corporate and philanthropic leaders who share the fund’s vision of curing systemic racism with a systemic response. The initial board members include:
- Alejandra Ceja, executive director, Panasonic Foundation;
- Manuel Chinea, chief operating officer, Popular Bank;
- Sabrina Conyers, partner, Nelson Mullins Riley & Scarborough LLP;
- Michellene Davis, executive vice president, RWJBarnabas Health;
- John Harmon, CEO and president, African American Chamber of Commerce of New Jersey;
- Carlos Medina, CEO and president, Statewide Hispanic Chamber of Commerce of New Jersey;
- Randall Pinkett, chairman, BCT Partners;
- Malcolm Robinson, chairman, Montclair Capital Group;
- Paul Sangillo, vice president-legal, Innovative Cosmetic Concepts.
Those interested in learning more about the NWK FAM Fund or donating can contact Bernell Hall of Invest Newark at BHall@investnewark.org.
Baraka said the need for the fund is simple — and more pressing than ever.
“There are vast wealth disparities in our nation, state and city between white-owned businesses and Black and Latinx-owned businesses, clearly worsened by the pandemic,” he said. “We need to empower our entrepreneurs of color so that they can compete at increasingly higher levels. The Newark 40 Acres and a Mule Fund will bring pride and prosperity to our city as a whole and to our Black and Latinx business community in particular.”
According to the New Jersey Institute for Social Justice, the median net worth of New Jersey’s white families is $309,000, while the median for New Jersey’s Latinx and Black families is just $7,020 and $5,900, respectively. It is one of the worse racial wealth gaps in the nation.
Organizers said the objective of the fund is to close these gaps by providing Black and Latinx business owners with a more level playing field with their competitors.
Hall, the CEO of Invest Newark, said the model is the first of its kind in the country.
“We believe that we have created a national model where financial institutions, corporation donors and local economic development corporations partner to create a holistic investment platform that provides Black and Latinx businesses with access to the business contracts, patient capital and technical assistance necessary to grow despite the current pandemic and social unrest,” he said.
Officials said the initiative will drive economic wealth among Black and Latinx populations in Newark by leveraging invested capital, public subsidies and public assets to enhance the value of Black and Latinx-focused small businesses and real estate development.
Baraka said the city is superbly equipped to continue its immense economic progress.
The city is home to an international airport and seaport, a transcontinental train station, five major highways, headquarters to major corporations, the seventh-busiest indoor arena in the United States and more than 55,000 students and teachers attending high-level institutions.
New Jersey Community Capital President Wayne Meyer said Newark has had more than $5.6 billion in public and private investment and record levels of local job creation (pre-COVID-19) since 2014. He feels the fund can bring so much more.
“Despite over a century of broken promises, Black-owned businesses and entrepreneurs have thrived and been the economic engines of their communities,” he said. “It is a privilege for New Jersey Community Capital to help Mayor Baraka and his team provide capital to Newarkers looking to carry on this rich tradition.
“We are honored to be thought of as a trusted partner in the Newark FAM Fund and look forward to doing all we can to grow and sustain Newark’s Black and Latinx business community.”
The name of the fund comes from one of the earliest Reconstruction promises to the newly freed slaves of 1865 — one that provided each freshly emancipated family head with “40 acres and a mule” in America’s mostly undeveloped and unowned land at the time.
Under this initiative, “freedmen” and their families would be able to become small, independent farmers. However, the program was never pushed forward, and most of the freedmen rapidly reverted into a new form of semi-slavery as tenant “sharecroppers,” living in poverty and perpetually in debt to their white landlords.