An “Our Black Year” Homage: Cooperative Economics & Organizing Your Financial Support for Black Businesses
Ujamaa, Investing, and Keeping It Black-Owned
There’s a Swahili word called “ujamaa,” which means cooperative economics. Ujamaa is a principle taught on the fourth day of Kwanzaa and since 1992, each year on December 29th, I would share personal reflections with family and friends about how I put this principle in action for the last 365 days of the year.
In hindsight, this period of reflection during the annual Kwanzaa celebration was profound and life-changing for me. Ultimately, it would be the seed planted in an 8-year-old Black boy that would lead me to become an angel investor and venture capitalist with a focus on investing in ventures led by Black and Brown entrepreneurs. Powerful.
2017 was a pivotal point in my Ujamma journey. In honor and celebration of Black History Month, I decided to embark on a “social experiment” in February 2017. I led my household in a one-month commitment to dedicate 100% of our household spending to Black-owned businesses. My wife and I would only purchase goods and services for all of life’s needs from Black-owned manufacturers, distributors, retailers, or entrepreneurs.
I originally had the idea hit me in December 2016, and a friend recommended that I read “Our Black Year” first. I read it in December and did a lot of research on local vs. national offerings leading into the Christmas holiday. I took 30 days to prepare for the endeavor and we took the journey in February 2017. It was a remarkable experience, and a very eye-opening one.
Additionally, on February 9, 2017, a friend and I pulled together 18 Black men and women to open bank accounts at the Black-owned Industrial Bank in Washington, DC. In total, we moved over $100,000 to Industrial Bank in new accounts on that day. We had a chance to sit down with the CEO of Industrial Bank, Doyle Mitchell, for a little over an hour to discuss the history of the bank and meaningful ways to support Black banks and entrepreneurs. By banking with a Black-owned bank, you indirectly support Bank loans to Black homeowners and business owners. Your bank deposits allow banks, such as Industrial Bank, to practice fractional reserve banking and lend 90% of your deposits to the Black community for home and business loans.
Since that initial month in 2017, our household has fully adopted the idea of going out of our way to do research and prioritizing products and services created and/or owned by BiPOC business owners.
Of course, funneling our expenses towards Black entrepreneurs took a lot of organization, and we had to keep careful track of where all our dollars were going. I used Mint.com to track our household spending (I love that application) and we recorded 5% of our total household spending going to Black-owned businesses in the year. By the end of 2017, I knew I wanted to build on this rewarding experience in a meaningful way.
Throughout 2017, I started to form relationships with many of the entrepreneurs and small business owners that we were supporting. I would share ideas, resources, and make introductions. Naturally and organically, I would introduce more people to my “social experiment” and an entrepreneurial ecosystem was built. Each year since that first one, I would encourage friends and associates to set an annual spend goal and support the ecosystem of Black-owned businesses and businesses that are allies of the Black community and culture.
That work has paid off. In 2020, 25% of my household spending went to Black-owned businesses. In addition, 3% went to ‘other minority-owned’ businesses, so in total, 28% of our household spending went to minority-owned businesses. These numbers have increased each year over the last 4 years: 5% (2017), 8% (2018), 22% (2019), and now 25% (2020).
My wife and I achieved these numbers by prioritizing quality businesses first and foremost. Black-owned businesses don’t suffer from any lack of talent or incredible ideas, but rather from marginalization and under-investment. They can and should be competitive businesses in DC and beyond, but the barriers they face are just more difficult than other communities. Being intentional about betting my money on the ones that are doing great work, but just flat-out need more dollars, just helps give them an edge they need.
Over the years we’ve gone through trial and error trying out new goods or services from a particular Black business and reviewing the results, compiling the best ones, and coming up with a list of reliable places we turn to over and over again. We found new businesses mainly through word of mouth, leaning on our community of folks to suggest and vouch for places we could try out and vet ourselves later on.
Our friends and family are now well-versed in carefully and compassionately asking who owns the venue and gleaning the background of the stakeholders involved. Sometimes, businesses that look promising don’t quite meet the standards we’ve set for ourselves, but we don’t get discouraged because we know that there are many others out there who can do the job and meet this critical criterion. We learned to give feedback in a loving and compassionate way and give every business a chance.
This project is deeply personal and profoundly fulfilling for me as a Black man and 6th generation Washingtonian. The racial wealth gap in this country is massive and growing exponentially, with Black people disproportionately suffering the most evaporation of their wealth. My small contribution in my family’s own city is to try and elevate that issue and try to address it in my own community, and there’s incredible joy in that for me that I encourage all other folks to share with me.
The ecosystem I’ve been supporting has supported me right back, and one of the great pleasures of the whole experience has been my ability to connect Black businesses and entrepreneurs with each other to create feedback loops for all those places to support each other and keep more dollars — and jobs — within the community. Every time I see a place I’ve invested my money input up a “Now Hiring” sign, I know I’ve done well for myself, my dollars, and my community.
Since that first Kwanzaa celebration in 1992, I’ve invested in close to 30 ventures.
The process I went through to source Black businesses and shift my expenses towards them isn’t just limited to DC. Anyone, anywhere in this country, can and should put in the time to consciously direct your dollars to the businesses and people that need them the most. All it takes is a little due diligence and the payoff is immense. By organizing our financial support for Black businesses, we’re living in alignment with our values while creating vibrant communities and sustainable ecosystems for the most marginalized people in this country. And you can do it too.
Need help taking the first step? Connect with our team at Think Rubix today to see how we can help guide you on your very own Ujamaa journey.
