A coalition led by the Black Economic Council of Massachusetts has laid down an ambitious challenge for the Massachusetts business community: Commit up to $1 billion to a fund for reducing racial inequities over the next decade.
The “reconstruction and rehabilitation fund” is one of many public- and private-sector initiatives the business group unveiled on Monday to address systemic racial inequality in the state’s economy. BECMA’s focus is on investments, business contracts, leadership positions, endowment divestitures, and philanthropic donations.
The fund would invest in causes ranging from nonprofits to housing to “alternative economic models,” said Segun Idowu, the group’s executive director. The money could be distributed as grants, loans, or lines of credit. Idowu said BECMA and its allies are still discussing who the fund’s steward should be. The goal is to increase the financial fortunes and opportunities for Native Americans and Black people.
“This is getting at the broader conversation, not just the violence that we’re dealing with today, but a lot of the issues that are tied to colonialism,” said Jean-Luc Pierite, president of the North American Indian Center of Boston.
The Black Mass. Coalition project is among many business-related efforts, in the Boston area and nationwide, that have been launched to address economic inequity since protests swept the country after the death of George Floyd in Minneapolis on May 25.
Idowu said many of the other efforts are falling short.
“This isn’t the type of thing where you give away a million dollars and racism is over,” Idowu said. “It’s going to take a lot of hard work and difficult decisions to make sure we are addressing this systemic issue.”
The list of the council’s ideas took shape as Idowu and some of his colleagues fielded questions from executives in the corporate world, asking what they could do to help.
“I wanted to be intentional here about how we can make some kind of headway, and to make sure these folks putting out Black Lives Matter statements are proving it with action and not getting away with just saying it,” Idowu said.
This week, BECMA plans to send its list of goals to the 100 biggest public companies in the state as well as to the 25 largest philanthropies, Idowu said. Some meetings already have begun. The group will also convey the goals to state and municipal leaders, he said.
“We have a concerted strategy that we plan to take over the next few months, so this is not an idle conversation or a splashy statement,” said Nia Evans, director of the Boston Ujima Project, another coalition member.
The BECMA-led coalition is also pushing for public policy changes, including the creation of a public bank, the divestiture of state pension money from fossil fuel and prison businesses, a reduction in the State Police budget, and an end to mandatory minimum sentences for drug-related charges.
On the private-sector side, BECMA wants large companies, banks, and venture capital firms to collectively commit at least $1 billion to the reconstruction fund by the end of 2030 — or about $100 million a year.
Venture capital firms and banks are being asked to pledge a minimum of 10 percent of their capital to businesses owned by Blacks and indigenous people, while big companies should do their part through at least 10 percent of their contract dollars.
Perhaps the most aggressive request applies to the leadership ranks: BECMA wants companies and nonprofits to eventually ensure that at least 40 percent of their executive leadership and board positions go to Black or indigenous Americans. That goal represents several hundred board seats and a similar number of C-level jobs among the state’s top 100 companies.
There are just four black chief executives among the Fortune 500; the number of Black CEOs at major Massachusetts companies is similarly small.
About 13 percent of the US population identifies as Black alone, according to census figures, compared to about 9 percent in Massachusetts. (These numbers go up by a few percentage points when people with two or more races are included.)
Idowu recognizes the 40 percent goal is ambitious. He said BECMA isn’t expecting to reach it overnight.
“We’re not calling for companies to fire all of their C-suite,” Idowu said. “It’s important to have ambitious goals to stimulate some kind of change.”
This initiative coincides with BECMA’s effort to raise $1 million for its own programming, which kicked off this month with a $100,000 donation from Herby Duverné, CEO of Windwalker Group, a security consulting firm in Roxbury.
Idowu became the first full-time executive director of BECMA, which has more than 300 members, in late 2018. Its 12-member board includes Duverné, Emerson College president Lee Pelton, OneUnited Bank president Teri Williams, and the Foundation for Business Equity’s head, Glynn Lloyd.
BECMA’s origins can be traced to community discussions in 2015 about a report from the Federal Reserve Bank of Boston, which analyzed racial disparities in wealth accumulation. One stark finding: The median net worth of a sample of white households in Greater Boston was $247,500, compared with a median of $8 for the US-born Blacks who completed the researchers’ surveys.
Prabal Chakrabarti, senior vice president of regional and community outreach at the Boston Fed, said he hasn’t been able to review the specifics of the coalition’s proposals yet, but appreciates the scale of their ambitions. Better to be ambitious, he said, than to pick targets that are easy to accomplish.
“Given the racial wealth gap . . . the differences in white wealth and Black wealth, something bold is needed,” Chakrabarti said. “There’s a real opportunity here.”
The Massachusetts Business Roundtable, which represents more than 80 of the state’s largest employers, has been working with BECMA and its allies to combat racial inequality, executive director JD Chesloff said. The latest list of targets “provides a helpful framework” for that collaboration, he said.
He added: “One message I’ve heard clearly is that we, as a business community, need to listen to and partner with organizations at the forefront of this work.”