Meeting Dr. Cosby's Challenge: Resource-Pooling Strategies for Black Economic and Educational Progress

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Strategies 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 action 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 to collectively address economic, educational, and social problems in the black community.

As a contribution to the ongoing discourse sparked by the "Cosby Indictment" and call to action, Capital Researchers LLC, a research/consulting firm in Washington, DC, has proposed strategies for pooling resources on a massive national scale from middle- and upper-class blacks (and nonblacks) to address urgent economic, educational, and social problems in the black community. [Links to several commentaries and critiques on the "Cosby Indictment" are provided at: http://www.blackprogress.net/cosby-indictment.htm (blackprogress.net-The Black Progress Network is an initiative of Capital Researchers).]

The proposals are motivated by a belief that the intensity of the reaction to the "Cosby Indictment" and the consequent calls to action suggest that the time may finally be ripe for implementing such resource-pooling strategies, which many have advocated over the years, but have yet to materialize.

In two essays, Dr. Michael Isimbabi, principal of Capital Researchers and a former finance professor and banker, discusses the feasibility of, and frameworks for establishing, two resource-pooling efforts:

• A for-profit "National Venture Capital 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. Such a "VC Fund", by providing adequate financial and social returns to investors, would harness the substantial, but largely untapped, financial power of middle- and upper-income blacks for economic development. The essay, "Capital, Entrepreneurship, and Black Progress: Harnessing Black Financial Power Through a National Venture Capital Fund", is available at: http://www.blackprogress.net/capital.html

• A "National Excellence & Anti-Stereotype Fund" ("EXCEL Fund") -- the educational and social analogue of the VC Fund -- that would finance campaigns and other programs that foster (a) the proper educational and social development of black youth and (b) eradication of the root causes of the continued perpetuation of racial stigma and stereotypes. The essay, "The Cosby Challenge: Resource-Pooling Strategies for Black Economic and Educational Progress", is available at: http://www.blackprogress.net/resource-pooling.htm

Several ideas along these lines have been suggested over the years 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.

Over the last decade, especially following the emergence of several "Financial/Economic Empowerment" and "Black Wealth" initiatives in the late 1990s, 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. Such 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. -- make a VC Fund that provides adequate financial returns to investors quite feasible. Such a fund could, for instance, take advantage of a tax incentive program such as the Treasury Department's New Markets Tax Credit (NMTC) Program to invest in low-income inner-city and rural communities.

The "EXCEL Fund" would finance campaigns and other programs that address interrelated issues, as appropriate for different circumstances and communities, with respect to:

• Misplacement of values on materialism, athletic achievement, the negative aspects of hip-hop culture, etc., rather than on academic achievement, entrepreneurship, and wealth-building

• "Anti-intellectualism" (or the so-called "acting white" syndrome) on the part of some black students, including those from middle-class backgrounds

• low expectations with respect to educational excellence and social behavior

• Inadequate parental involvement in the educational and social development and behavior of children

• Provision of financial and other resources (intellectual, educational, technical, advocacy, networking, etc.) for after-school, mentoring, and other programs that will foster children's educational, economic, and social development

• Public investment in education, early childhood development programs, after-school, mentoring, and remedial programs, job training, etc.

• Education reform, including school choice (charter schools, boarding schools, voucher programs), as appropriate for different communities, with emphases on seeking pragmatic solutions and reasonable compromises in policymaking

• Bad behavior by some blacks (especially youth and public figures such as misbehaving rap stars and athletes), which, though limited to a small minority, nevertheless denigrates the whole race and perpetuates racial stereotyping

• Negative stereotyping of blacks in the media by some influential media personalities, politicians, writers, and pundits -- often done primarily for political, ideological, and financial gain -- which fuel racial prejudice and animosity.

To be sure, many individuals and organizations have been toiling, largely unheralded, in communities across the country to address these problems. 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 self-reliance and educational achievement as the foundation for black progress.

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.

Of course, as Cosby's critics have noted, 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.

Nonetheless, 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. 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 the small, scattered, ad-hoc organizations that currently exist.

The feasibility of both the VC and EXCEL Funds is predicated on the presumption that successful blacks constitute a substantial, but largely untapped, potential source of financing for the Funds, and have a strong incentive to pool resources to help the black poor. While the EXCEL Fund would not provide tangible financial returns, its feasibility would depend on the ability of its sponsors to credibly demonstrate that it will provide high "social returns" to "investors".

In this regard, 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 small 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.

If such strong incentives exist, then 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., black economic progress and the eradication of the pathologies that afflict a minority but damage the whole race and hamper racial progress.

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 Funds, much like General Colin Powell did to found "America's Promise" (http://www.americaspromise.org) in 1997.

Thereafter, with strong and innovative management that results in substantive, highly visible, and well-publicized accomplishments, the Funds 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 the funds.

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 Funds. Obviously, a key question is whether the Funds would be able to attract enough financial contributions to enable them have a significant impact.

Is there a sufficiently large population of blacks who are concerned enough to invest significant amounts in the Funds and make them 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.

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Capital Researchers LLC (http://www.capitalresearchers.com/) provides top quality and cost-effective research, analysis, knowledge/information, education/training, and project management services. The firm is preparing a publication on black educational and economic progress, to be published later this year.

The two essays on which this press release is based are available at: http://www.blackprogress.net/ (The Black Progress Network, a Capital Researchers initiative). The website also provides links to (a) several commentaries and critiques on the "Cosby Indictment & Call to Action" and (b) websites/initiatives, reports, articles, etc. on: Wealth-Building/The Wealth Gap/Financial & Economic Empowerment; Fostering Educational Excellence; Business/Entrepreneurship/Capital; African Progress; Etc.

Contact Information

Michael J. Isimbabi, Ph.D.

Capital Researchers LLC

733 15th Street, NW - Suite 700

Washington, DC 20005

Tel.: 202-393-1348

Fax: 202-393-1349

http://www.capitalresearchers.com/
http://www.blackprogress.net/

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Michael Isimbabi