Parents as Entrepreneurs program developed by CAAAB with the help of the Incarnate Word Foundation began its operation in Clay Elementary School of the St. Louis Public School District located in the Hyde Park Neighborhood in North St. Louis. Seven parents have enrolled so far. We will soon be sitting with the teachers of children whose parents have enrolled into the program to begin developing a matrix to measure the social and academic impact of these children as a result of their parents pursuing their goal for financial independence. Parents have also identified some social areas where they need assistance in order for them to successfully pursue entrepreneurship. CAAAB will soon be linking these parents to appropriate support services. CAAAB is also developing an evaluation matrix to measure the process and impact of this program which will be updated periodically through this blog. Keep reading!
News & Announcements
Parents as Entrepreneurs program along with other community programs that won the demonstration grant from the Incarnate Word Foundation to run programs in North St. Louis has been featured on St. Louis American.
CAAAB was among seven recipients to win a demonstration grant from the Incarnate Word Foundation, a St. Louis based foundation, to operate the Parents as Entrepreneurs Program at Clay Elementary School in Hyde Park neighborhood of North St. Louis. The goal of Parents as Entrepreneurs program is to train and help parents/guardians of children attending Clay School start their own business.
CAAAB and its partners which include Clay School and the Epsilon Lambda Charitable will be monitoring the impact of this program on the social and academic advancement of the children of the participants as well.
CAAAB has come a long way since its separation from the Black Leadership Roundtable in May, 2010. There were times after the separation when the very existence of CAAAB was questionable but with trust, hard work and perseverance, and the support of its members and the community the organization is looking forward for a new beginning.
Since separation from the Black Leadership Roundtable, CAAAB has established itself as an independent 501©3 organization. It has also extended its board membership and is in the process of building the capacity of its board for sustainable governance and the management of the organization. In the course of seven months, CAAAB has developed strong strategic partnership with area organizations who are highly accomplished and valued players in promoting social and economic justice. The partners are Justine Petersen, a one of its kind micro finance/lending organization in the region, Better Family Life, and Grace Hill who are both leading agencies in social and human capital development . The goals of these partnerships is to bring about a paradigm shift in community social and economic development in the St. Louis area whereby programs/services delivered are based on shared resources. The understanding is to maximize resources, lower overhead costs, and ensure effective service impact.
The first quarter of 2011 will see two major initiatives of the CAAAB/Justine Petersen partnership unfolding that will have tremendous impact on the growth and sustainability of disadvantaged businesses. They are, the ‘Emerging Markets Loan Fund’ and the development of an ‘Acceleration Center’ in the heart of Grand Center in North Grand. The ‘Emerging Market Loan Fund’, a pool of fund provided collectively by local banks and matched by Justine Petersen, will significantly increase the lending capacity of Justine Petersen to disadvantaged borrowers. The ‘Acceleration Center’ is aimed to provide “mixed income” work space with subsidized in-house shared services to small businesses.
CAAAB has also been hosting series of meetings with its member businesses and board members to reorganize its programs and service delivery method to best meet the sustainability needs of its existing and future member companies. CAAAB is conducting in house and university assisted research in best-practice to determine process led, cost effective, and targeted program/service delivery methods. The new method will also look at the human capital needs of the leaders and their workers and provide/link interventions accordingly to maximize company’s financial growth as well as that of the workers.
Development of community businesses are being researched and recognized as effective tools for poverty reduction and wealth accumulation among disadvantaged and impoverished residents of urban core neighborhoods in the United States. Recognizing this need, CAAAB is restructuring its services and building strategic community partnership to introduce entrepreneurship to impoverished and disadvantaged population, and create pathways for them to start and sustain a business. Recently CAAAB won a $5000 award, and is among other finalists to win additional $15,000 to operate a ‘Parents as Entrepreneurs Program’ in Clay Elementary school to uplift the economic conditions of parents. The overarching goal of this program is to socially and economically stabilize these families so that their children attain academic achievement.
In October, 2010, Mr. Eddie Davis, President and Executive Director of CAAAB received a Community Achievement Award from the City of St. Louis for his long and outstanding work on community economic development. He was among several reputed St. Louis community leaders awardees.
The year 2011 is critical for CAAAB as it begins its process of establishing itself as a catalyst for community economic development by building capacity of minority and disadvantaged businesses, mobilizing community stakeholders to create an environment that will allow and support the growth of these businesses, and by developing community businesses as tools for wealth accumulation among disadvantaged and impoverished population.
The U.S. Census Bureau recently reported encouraging news about one segment of the nation’s economy: the number of minority-owned businesses is increasing at unprecedented rates; and more minorities own their own companies than ever before.
Yet, despite these signs of development, the bureau’s findings also revealed a shocking disparity in racial economic equality: white-owned companies grossly outnumber minority-owned businesses by almost four to one.
According to the research, the economic influence of¬ minority companies lags far behind those owned by whites. For example, sales at minority-owned companies made up barely three percent of all business receipts.
This disparity has its roots in the issue of the “unbanked” and “underbanked.” According to research from the Federal Deposit Insurance Corporation (FDIC), at least nine million U.S. households are unbanked – meaning they have no checking or savings accounts, and no access to mainstream financial services. Roughly 21 million – or 18 percent – of all households in the U.S. are underbanked, meaning they have limited or sporadic access.
The unbanked/underbanked crisis affects minorities at a much higher rate than whites. Almost 22 percent of black households and more than 19 percent of Hispanic households are unbanked. By contrast, less than four percent of whites are unbanked.
Here in St. Louis, the racial disparity in banking is the largest in the country: more than 31 percent of black households do not have checking or savings accounts, whereas only one percent of white households are unbanked. Furthermore, 33 percent of black households in St. Louis are underbanked and, in the last year, used check-cashing services, payday loans or pawn shops.
In total, a staggering 64 percent of black households in the St. Louis area are either unbanked or underbanked.
Locally and nationally, large segments of minority populations are severely disadvantaged in terms of owning their own businesses, simply because their lack of credit history limits their ability to access the capital they need to run a business.
What’s more, minority-owned businesses are, on average, more vulnerable to failure and bankruptcy for precisely this reason. Because more minorities are unbanked or underbanked, they have fewer savings and less ability to borrow money on affordable terms.So when business slows and the bills pour in, these companies are more likely to go bust or borrow from payday lenders at astronomical interest rates and whopping penalties.
Simply put, without strong credit profiles, minority-owned businesses are on thinner ice.
The answer to leveling the racial disparities in both business sustainability and banking is raising and maintaining high credit scores in minority populations. When entrepreneurs increase their credit scores, they demonstrate a clear ability to manage their finances, making it easier for them to secure business loans.
In fact, a high credit score is possibly the single most important asset a business owner can have in today’s economy. Despite the federal government’s call to increase small business lending, business owners are nonetheless experiencing a credit crunch as a result of the recession.This is making it harder than ever for business owners with less-than-perfect credit to borrow money to sustain or grow operations.
The good news is that with the right information and financial tools, any business owner can earn – and maintain – a high credit score, regardless of cash flow or their business’ performance over the past year. This means that owners of even modest businesses have the power to increase their ability to access to capital to stabilize or expand operations.
While the credit crunch has made borrowing from banks more difficult than before, regulated and affordable alternatives are available. Community Development Financial Institutions (CDFIs), as well as nonprofit microlending organizations, are increasing in number and lending capacity across St. Louis and the nation. These organizations provide smaller loans on average than banks, and serve as critical resources for small businesses in need of capital.
While these organizations are growing nationwide, it is more important than ever that legislators, civic leaders, banks and community organizations work to raise awareness of the importance of building strong credit. We must join efforts, starting in the St. Louis area, to create and support policies and programs that focus on reducing the populations of unbanked minorities and helping them to improve their credit scores. By addressing the unbanked crisis, we will help empower millions of credit-underserved entrepreneurs to improve their financial capacity so they can play a larger, more powerful role in the local and national economies.
Boyle is founder and chief executive pfficer of Justine PETERSEN. Davis is president and executive director of the Center for the Acceleration of African American Business and a Justine PETERSEN board member.
During 2009, the St. Louis Black Leadership Roundtable’s (BLR) Economic Development Committee continued it efforts to advance economic development in the St. Louis and Metro East regions by assisting African American businesses grow and develop. This effort was accomplished through BLR’s Center for the Acceleration of African-American Business (“CAAAB”).
In April 2009, BLR learned that Eddie G. Davis, a member of the board of directors of BLR and the Executive Director of CAAAB, was selected by the U.S. Small Business Administration (“SBA”) as the 2009 National Minority Services Champion. This significant and unique national honor was based upon his distinguished services in advancing the goals of BLR and CAAAB.
The SBA award represents national recognition of the creative and strategic role that BLR is serving in our local service area thanks to Mr. Davis’ dedicated hard work. In fact, Mr. Davis’ award signifies that BLR has accomplished one of its goals that BLR established when it designed CAAAB just three years ago: to establish a program that would serve as a national model for the development of small business within the St. Louis metropolitan service area.
Karen G. Mills, Small Business Administrator said of Davis and the other National SBA winners, that “[t]he SBA is proud to honor these men and women as true champions of small business, whose tireless efforts have provided tangible and significant support to small businesses and to their communities.”
Eddie G. Davis is Principal of DaLite & Associates, LLC (a business consulting firm), Chairperson of the Economic Development Committee, a member of the board of directors of BLR and Executive Director of CAAAB.