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Quiet as it’s kept, black people are among the nation’s most generous givers.

According to a recent study by the W.K. Kellogg Foundation and Rockefeller Philanthropy Advisors, black donors give away a quarter more of their incomes than do white donors.

Also, according to the report, nearly two-thirds of black households make charitable donations worth around $11 billion a year.

Much of that giving, however, goes to black churches, but more of it is going to other important causes, such as HIV/AIDS prevention.

One of the reasons that’s happening is because black people are earning more money.

Census figures analyzed in Nielsen’s 2011 The State of the African-American Consumer report show that more than 8 million black households earned incomes of $25,000 or more per year in 2009. The largest growth in income occurred among black households making $75,000 to $100,000 and $100,000-plus a year. Their numbers grew by 42 percent and 88 percent respectively between 2000 and 2009.

Also, according to the Nielsen report, black people have a buying power of nearly $1 trillion annually.

What those figures tell us is that black people have the power to make a much bigger dent in addressing deeper, structural problems such as unemployment and community deterioration.

But to do that, we need to build more inner-city businesses.

Such businesses could create the economic and social infrastructure needed to bring jobs and normalcy to communities where many people don’t work a typical day, and where drug dealers provide too much of the examples of entrepreneurship. But building such businesses is tough because they tend to have limited access to the capital needed for their success.

That’s why I believe the time is right to revisit the idea of building a black venture capital fund.

If more of our generosity and spending power were directed toward building such a fund to grow small businesses in our communities, we could make a huge dent in the social and economic disparities that plague us.

We have the means to make such a fund work.

If, for example, only one-quarter of those 8 million black households who earn $25,000 or more a year were able to contribute, on average, around $83 a month, it could add up to a capital pool of $2 billion in one year.

In fact, even if only a quarter of this average monthly contribution can be realized and invested in a fund, the $2 billion would be raised over four years!

Of course, establishing such a pool will have its challenges, such as finding initial partners and sponsors, and building a groundswell movement to support it.  


Another challenge is the trust barrier; with even black churches losing trust and credibility following some recent scandals, it will likely take the involvement of a high profile individual – think American Express CEO Ken Chenault or Oprah Winfrey – to generate excitement for it.


But through the use of modern financial and information technology, including social media, it will be easier to ensure transparency and accountability.  


In any case, we need to start embracing the venture capital idea now – because while we know where much of the solution to our problems lie, we can’t depend much on government to help fix it.

While President Obama used a government stimulus program to address unemployment, he had to settle for one that was smaller than he originally envisioned because of Republican opposition.  And now, even the president’s relatively modest American Jobs Act remains stalled in Congress.

But if we pool our considerable financial resources into a black capital fund, we can succeed in creating jobs and building an entrepreneurial spirit that can help us change the plight of our communities and our collective destinies.

We have the money. Now all we need is the will and the confidence to make this work.


For more on resource-pooling initiatives, visit


Dr. Isimbabi is a Washington, D.C.-based financial markets and energy industry professional and consultant. A former professor of finance, he is co-author of the investments book, Contemporary Portfolio Theory and Risk Management (West Publishing), and author of articles and scholarly papers in finance and development. He is a research consultant to and is developing a preliminary project toward the establishment of a resource-pooling fund.