Empowerment Experiment Shines Light on Black Business Blight

Like many other blacks in Illinois who live in areas where mainstream grocery stores are absent or distant, Maggie Anderson travels quite a distance to find a grocery store that sells fresh food. The difference is Anderson doesn’t live in a food desert.  She travels 14 miles into Chicago’s inner city to Farmers Best Market because it is black-owned.

Maggie and her husband, John, a Harvard graduate with an MBA from Northwestern University, made a pledge that for a full calendar year, starting Jan. 1, they would only “buy black.” This means the money they spend for food, gas, vacations, and all other purchases will be limited to purchasing products and services of black-owned companies. The couple has switched to Covenant Bank, a black-owned institution, and they even hope to have their debt from student loans transferred to a black creditor.

“The whole purpose of taking the pledge is to demonstrate that I believe in black businesses so much so that I want to live off them for a year,” Maggie explains. “We want to see if there is a possibility years from now if all of the names that we hear, the Walgreens, the Hiltons, the Walmarts … We want one day for those families to be of different races,” Maggie says.

Many people, white and black, have applauded the Andersons’ endeavor, which was originally called the Ebony Experiment. The duo changed the name to the Empowerment Experiment in an effort to refocus the discussion away from race and toward economic empowerment. “It was a strategic decision,” says Maggie Anderson. “This new name better communicates what the experiment is really about. Also, we want to clear up any confusion in the public’s mind about our personal reason for making the pledge.” They are documenting their challenges and triumphs via their blog.

“The broader point is that a thriving African American community benefits society and this great country as a whole,” says John, in defense of the experiment.

If the growth of minority firms actually reflected the minority population growth, it would mean an additional 2.4 million firms and gross receipts of $2.5 trillion — nearly four times the current amount of gross receipts, according to a Minority Business Development Agency news release.

“It is not racist to help a community that has the highest rate of unemployment. That is strategic planning,” says Steven Rogers, the Empowerment

Experiment’s executive adviser for entrepreneurship and wealth creation. “We have always proven to be the least racist of everybody. We have never been discriminatory with our dollars. We will spend with anybody. We don’t see any evidence of whites buying from black owned companies on any major level.”

“Supporting a minority-owned business is a way to maintain the economic balance, health, and vitality of your local community,” says John Simons, senior personal finance editor at Black Enterprise magazine. “Tomorrow’s great industries are going to spring from all corners of the country. In order for the U.S. economy to fire on all cylinders, the country needs all its entrepreneurs to have access to loans and capital, to expand their businesses, branch out, and even have the freedom to fail.”

Although some might think driving past a McDonald’s or a Lowe’s to find a black-owned fast food place or hardware store is inconvenient, the Anderson’s think the hunt is exciting, and they have learned how to be creative to reduce the hassle. For example, they mail money to the closest black-owned gas station in Rockford, Illinois, 83 miles away, which, in return, mails them gas cards that they use at other service stations.

Farmers Best Market owner Karriem Beyah says his 35,000-square-foot grocery store, which just opened July 2008, is the only black-owned grocer in the state of Illinois.

Maggie says black businesses have suffered because the fiscal benefits of integration were one-sided.

“Integration made sure that other [ethnic businesses] had the opportunity to flourish and prosper in our community and take that money back out,” says Maggie, a stay-at-home mother who has a law degree and an MBA from the University of Chicago. “Black business owners were not welcomed to go into a white, Korean, Asian, or an Arabic community and start building up black businesses there. Our money just kept going out and it wasn’t reciprocated.”

“The fact that certain people would choose culturally to pick a group of their own to purchase their services and products happens all of the time,” says Michelle Collins, owner of a Chicago-based business and financial advisory firm that serves lower middle-market companies. “For African Americans it is a little challenging because they don’t have a particular geographic community. The Andersons are going about it in a different way, but it is a natural outcome from any group.”

In addition to Rogers, a professor of entrepreneurship at Northwestern University’s Kellogg Graduate School of Management, the Andersons enlisted scholarly help from Georgetown professor and critically acclaimed author Michael Eric Dyson, Ph.D., and Michael Bennett, Ph.D., an associate professor and the executive director of DePaul University’s Egan Urban Economic Development Center.

“Black businesses get rejected for business loans at a higher rate than any other ethnic group,” says Rogers, adding that black business owners have difficulty obtaining access to capital to start and grow businesses. Rogers believes that the black community has always been brand loyal and sensitive to marketing and in many instances black companies do not have brand recognition and can not afford to build it.

John Anderson, a financial consultant with AXA Advisors, suggests that an underlying premise by black people that black products and services are inferior is the most detrimental problem to growing the black business community. “That is a psychological problem that [blacks] have. If we have that belief we won’t be inclined to support a black business in a black community,” he says.

The Anderson’s have planned to complete a study. Everything the family does in finding and purchasing products will be monitored and recorded and eventually take the form of a book that will chronicle their experience. Their goal is to turn this experiment into a movement that will connect and mobilize the black community.