Boston Has A Plan To Close The Racial Wealth Gap For Good

Earlier this spring in the majority black and Latinx Boston neighborhood of Jamaica Plain, an economically and racially diverse group of people sat in a semicircle and listened intently while Lor Holmes talked about garbage.

Holmes is a business manager at Cero, a worker-owned composting co-op that converts food scraps from local restaurants into soil for area farms. For roughly an hour she kept her audience of 20 rapt as she explained in nitty-gritty detail how massive machines called anaerobic digesters turn food waste into fuel — and how those machines could one day free Jamaica Plain and the surrounding area from the city’s corporate-owned energy grid.


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If compost to energy independence feels like a leap, consider the rest of the grand plan: a radically reinvented local economy that prioritizes minority-owned businesses and runs on a digital currency uncoupled from the U.S. dollar, in which citizens democratically decide how private and municipal investments are distributed.

In a city that remains one of the most starkly segregated cities in America, with a racial wealth gap that sees African-American households with a median net worth of just $8 (compared to $247,500 for white Boston households), a group of social justice activists calling themselves the Boston Ujima Project are endeavoring to empower those left out of the economy by giving them an economy of their own.

“This is about recognizing the history of the racial wealth gap and where that comes from,” said Ujima co-founder Aaron Tanaka. “It’s about overcoming a history of no access to capital and extraction [of wealth from the community].”

To Ujima’s members, the best way to right the enduring wrongs of free-market enterprise is by embracing free market enterprise.

“I’ve always been sort of entrepreneurial by nature,” Holmes, an Ujima member, said after her presentation. “I don’t find that contradictory with being anti-capitalist. And as long as there is private ownership, we want to have that distributed as equally as possible among as many people as possible.”

Though its meetings may have the feel of a second-wave Occupy gathering — with their sticker-adorned laptops, statements of preferred gender pronouns, and politely affirming finger-snaps in lieu of applause — Ujima is, at its core, an impact investment fund (a term used to describe funds intended to yield social or environmental returns in addition to financial ones) dedicated to elevating local, minority-owned businesses and keeping economic gains in the area.

Run, not out of a private equity firm, but out of borrowed community-center space, the $550,000 fund is governed by 259 voting members who, by design, must identify as people of color or working class, and must have ties to the fund’s target area of the largely low-income communities of Dorchester, Roxbury, and Mattapan. One needn’t invest to be a member (nor be a member to invest). Only an eighth of the nearly 470 total members have invested directly into the fund; membership requires just a $25 annual fee. Ujima hopes to bring in foundations and nonprofits as investors, and to grow the fund to $5 million by the end of 2020.

This summer the group will begin voting on which local minority-owned businesses to invest in. In addition to financials, Ujima voters will judge loan candidates based on the services their businesses offer to the community, and their values, such as a commitment to the environment, fair scheduling policies, or a willingness to hire formerly incarcerated people.

In 2016 Ujima offered the community a taste of what a democratically controlled economy might look like. At a pilot event in August of that year, Ujima brought together 175 community members, who pooled $10,000 of their own money (which was matched by nonprofits) and collectively decided to grant zero-interest loans to five black- and immigrant-owned businesses.

Among the loan recipients was Norma Rosario, a 64-year-old caterer who specializes in healthy Caribbean food. A single mother of limited means, Rosario emigrated from Puerto Rico 35 years ago. With a $2,000 loan from Ujima — which, considering her circumstances, would be very difficult to obtain from a traditional bank — Rosario was able to purchase three cambros, or holding ovens, that allowed her to grow from serving 20- to 30-person parties to events topping 200 people.

In addition to the loan, Ujima connected Rosario to her first major job, a 200-person event for City Life Vida Urbana, a community organizing group in Jamaica Plain. Rosario netted $7,500 on that job, which allowed her to not only pay off debt that had been dragging on her finances for years but also replace the roof of her mother’s home in Puerto Rico, which was destroyed by Hurricane Maria.

“A $2,000 loan may seem small to most, but for me and my family it was life-changing,” said Rosario, who now has dreams of launching a food truck or even a brick-and-mortar restaurant.

A $2,000 loan may seem small to most, but for me and my family it was life-changing. Norma Rosario

Another loan recipient from that pilot event was Fresh Food Generation, a healthy food truck and cafe based in Dorchester. Co-founder Cassandria Campbell, 34, a first-generation Jamaican American who grew up on the Section 8 housing voucher program and later earned an urban planning degree from MIT, touted her business’ mission to improve access to healthy food for Boston’s low-income and minority populations.

Speaking with HuffPost, she grimaced recalling how the opening of a new Popeyes in Roxbury earlier this decade was celebrated as an economic development win for the neighborhood. If she had been further along at the time, perhaps Fresh Food Generation could have been in that space instead, bringing better wages and better health outcomes to the people of Roxbury, not to mention keeping the profits circulating in the community.

She said the $5,000 loan from Ujima allowed her and her business partner to purchase a $4,000 commercial food processor, which quadrupled productivity in the prep kitchen and helped grow sales 30% in each of the following years.

Campbell sees the benefits of an Ujima relationship going far beyond access to capital. “When you get involved with Ujima, you’re literally getting buy-in from the community,” she said.

Campbell also pointed to Ujima’s efforts to build relationships between small businesses like hers and large institutions like Boston Children’s Hospital (BCH). Thanks to Ujima staff facilitating meetings with the procurement department at BCH, Fresh Food Generation got its first order from the hospital — 130 boxed lunches — in April. According to Campbell’s co-founder, Jackson Renshaw, in two years the relationship with BCH could be worth more than $100,000 in annual revenue.

“This is when I realized that Ujima is not playing games,” said Campbell. “Relationship building with the likes of Children’s Hospital can take several different touches over a long period of time to get that big order. We were in after two meetings set up by Ujima.”

The benefits go both ways, said Ujima staffers. By connecting its alliance of small businesses — a growing network of 26, including Cero, Fresh Food Generation and Norma Rosario’s Catering — to what it calls “anchor institutions” like BCH, Ujima is also offering a service to these big organizations.

Through certain provisions in the Affordable Care Act and a city program called Payment in Lieu of Taxes, Boston’s large nonprofit institutions (think hospitals, universities, and faith-based organizations) are expected to spend a significant percentage of the money they save in property tax exemptions to better the communities in which they operate. By connecting them with local business owners, “we’re creating a pathway for them to comply with the law,” said Nadav David, who leads Ujima’s anchor institution committee. “These institutions are spending a ton of money, and in many cases that money is leaving Boston,” he added. “It’s better for the institution when that money goes back into the local economy.”

The Ujima Project is also putting pressure on local lawmakers to use taxpayer money responsibly. “Tax dollars and pension dollars are public dollars,” said Tanaka, “so why shouldn’t we have a say over [where] those dollars get invested?”

Ujima scored its first victory by putting together a coalition that successfully lobbied Boston City Council to hold a hearing on divesting city money from corporations involved in fossil fuels, private prisons, predatory loans, and weapons, and to reinvest in communities.

For observers like David Wood, the director of the Initiative for Responsible Investment, a research project at the Harvard Kennedy School, the example of the Boston City Council hearing shows how funds like Ujima can have the most impact.

“It’s not going to be the Ujima fund itself that will transform our economic system, it will be the public discussion Ujima inspires about how finance works and how it can serve society,” he said. “One thing we don’t want to do is put the burden of transforming our massive financial machine on the backs of small funds like Ujima.”

“Still, the fund in itself is important,” added Wood. “It’s not just about promoting ideas around social justice and economic democracy, it’s R&D for finance in general and R&D for ways to mobilize citizens. It’s a way to model participatory budgeting that could then be included into public sector budgets.”

For Lucas Turner-Owens, a fund manager with Ujima, he sees the model as an end in itself, at least for Dorchester, the distressed minority neighborhood where he resides. As a black man, he dreams of having all of his spending needs met by minority-owned local businesses sourcing from minority-owned local supply chains.

“Right now, my community is forced to spend its money on these huge faceless corporations that are extracting our wealth and paying local residents minimum wage,” said Turner-Owens. “With Ujima, I’d like to see a closed-loop ecosystem of black- and Latinx-owned businesses where you can do all your shopping.”

Would that include a black Uber and a black internet?

“Why not? We just had folks from Detroit telling us that for $30,000 they built a community-owned internet using a mesh network,” he said. “They laid out in real detail the steps that got them there. And that’s the kind of thing that Ujima could resource.”

Ujima runs a time banking system, enabling members to trade hours of work — say, a ride to the airport, house painting, or Spanish lessons — like currency. A digital Ujima coin is also in the works: An Ujima stakeholder will be able to earn Ujima coin on the time bank by performing services for other Ujima members and then spend that Ujima coin at an Ujima business, completing a closed-loop system of transactions that circumvents the dominant economy and all of its inherent social injustices.

While Tanaka conceded that there are limits to how large Ujima can scale — “At some point,” he said, “you’re still competing against Amazon and Walmart and all their government subsidies” — he foresees a trans-local network, where The Boston Ujima Project can trade with San Diego for avocados, or with Miami for oranges.

“We’re getting two requests a week from people in other cities asking if we can come and help them build their own Ujima model,” said Tanaka.

At the end of the day, the idea isn’t to reject a capitalist framework, but to subvert and reinvent it. As Fresh Food Generation’s Campbell said, “I can’t fulfill my healthy food access mission with charity alone. It’s just not sustainable. There has to be a private sector conversation in all of this, or else what are we doing?”

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