Why is Atlanta, long known as a mecca for upward mobile African-Americans, number two in America in income inequality? And as home to the second-largest number of Black-owned businesses in the country, why are their employees often not counted in census data? In this episode, Latresa McLawhorn Ryan of the Atlanta Wealth Building Initiative shares how her nonprofit challenges systemic bias and introduces new systems and structures of capital to achieve shared prosperity. Learn how AWBI helps people of color build wealth in a way that has a responsibility to the community.
00:00 - 00:24
What's really core to this work, with me thinking about community wealth building is just, it's not radical. There was a time when we knew if our neighbor needed food to eat, there was a time where we supported as a community if a kid needed some extra direction or an opportunity to work at the local shopkeeper's place. And we just had a stronger sense of community instead of individual focus on our own needs.
00:29 - 01:06
This is Changing the Trajectory. And I'm your host, James Seth Thompson, Bernstein's Head of diverse market strategy. You know, when we talk about the racial wealth gap, it has cost the economy over 16 trillion dollars over the last couple of decades. But there are people and organizations who are working hard to ensure that history doesn't continue to repeat itself. I'm happy to introduce to you a friend of mine, Latresa McLawhorn Ryan, who is the executive director of the Atlanta Wealth Building Initiative, a data-centered nonprofit organization focused on closing the wealth gap. I can't tell you how happy I am, Latresa. Thanks for joining me today.
01:07 - 01:09
Thanks for having me and excited to be here with you.
01:09 - 01:25
You know, Atlanta's Wealth Building Initiative exists to make shared prosperity the Atlanta way by supporting the engagement, capacity and leadership necessary to address Atlanta's racial wealth divide. I certainly want to jump into that during this conversation.
01:25 - 01:32
But first, why don't you share a little bit about yourself, your career leading up to where you are today as executive director?
01:34 - 02:17
At the very most, that's been a bit of a winding road for me. I am trained in computer science from Spelman College and went on to law school thinking I would focus my career on intellectual property and started at a big firm in DC doing just that. But there was a revelation during law school where I discovered personal finance and the importance of it. And quite frankly, the need for sharing that information more broadly. I had my own personal experience with investing and saving money to buy a home and had money to invest. And I did not realize at the time it was as easy as setting up a checking account to kind of set up an initial investment account.
02:17 - 02:57
And it just seems so complicated. I had at this time five thousand dollars to invest in anything I wanted to do with it. Someone told me to put it into Home Depot. This was 2000-2001, and I couldn't figure out how to do that. Ultimately, I have no idea what happened with the money. And from that I realized... I made it a point to teach myself personal finance. I made it a point to research and get knowledge myself, but also to dig deep into various ethnic groups and our relationship with money. And from there, I found myself talking to anyone who would listen about personal finance and financial literacy, and that grew over the years.
02:57 - 03:38
I've had some great experiences working in a firm focused on estate planning and asset protection and nonprofit law, and tax exemptions law. And it was actually an old partner of AllianceBernstein in those days doing that work several years ago. And again, at the core was this need for financial literacy for our clients, regardless of how much information or how knowledgeable they were, if they were CEOs or major companies or professional athletes, there was this need to have practical understanding. And ultimately, that led to my own firm that really held financial literacy at the core, working with venture capitalists and private equity firm owners.
03:39 - 04:40
And then I went on to pursue my passion around creating economic security and a sustainable generational wealth, and I had a career with Operation Hope, which is an international financial literacy organization. And I headed up development of strategic partnerships there. And that's significant because it really taught me just so many stories of how really focusing on not only the technical aspects of it, but having a real understanding of the cultural issues that have to be addressed so that we can effectively help people, particularly in that case, low-income, often Black people, really understand how to build and generate wealth. Spend some time at [...] in their financial [...], before I found Atlanta Wealth Building Initiative. And it's perfect to pull all those pieces of my skills and experiences and guidance that I provided over the years to really ultimately create an environment where community wealth is defined and supported.
04:40 - 05:15
So I wasn't surprised that you landed at AWBI just given, over the last couple of years, getting to know you, your passion around community, your passion around financial literacy, the wealth gap. I see kind of the smile on your face when you talk about the organization, because I'm sure it really feels like this is where I'm supposed to be, right? But talk a little bit more about why is the work important from the seat of executive director at a nonprofit versus any other experiences you had in kind of the for-profit corporation space?
05:15 – 07:07
That’s a great question. So it’s important from this perspective because, as a nonprofit, particularly a nonprofit that really was developed from 18 months of convenings in the community with varied groups of stakeholders to determine what was important, what work was already being done, really assess what the gaps were. And ultimately allow the community to say, we want an organization that could really be squarely focused on looking at the full landscape of the ecosystem and determine what gaps exist, highlighting and raising awareness around good work that was happening, ensuring that work does not happen in silos, so that something that’s wonderful on the east side of town, their organization there, can also be implemented on the west side of town. And then just making sure that the full ecosystem understands work that is happening, so that either new partners in a market, or existing partners can really develop […] that are complementary to maximize investment and impact in the community. So being a nonprofit intermediary in a way has proven, time and time again, particularly during the early days of COVID, to be extremely important, because it allowed us to create partnerships, show up as a partner with both nonprofit and for-profit companies alike, with the government with community leaders, and allows us to develop a more cohesive approach at wealth building, community wealth building, here locally, because we can identify what resources are needed, period. […] resources, capital resources, social capital resources as well as raising awareness in a way that, if we weren’t squarely focused on this, we wouldn’t be able to.
07:07 - 07:14
We know that the wealth gap is persistent in many areas of the country and Atlanta is not spared from that.
07:14 - 07:35
We often talk about the contributors to the disparities, the detriment to our economy. Are their kind of specific line items or quotes that really share how dangerous this is? What are those things that kind of keep you up at night, both as someone who's trying to address the disparities in a community, but certainly as the executive director of your organization.
07:35 - 08:08
So Atlanta is a wonderful city. It has a long history of being known as a home for upwardly mobile African Americans and really being a place for Black-owned businesses. However, the reality is that Atlanta is now number two in income inequality just behind San Juan, Puerto Rico. And we're toward the bottom of the list in economic mobility. A child born into poverty in Atlanta has just a four percent chance of escaping it in his or her lifetime.
08:08 - 09:02
So that reality, combined with the fact that, on one hand, it's a very industrious environment—we have the second-largest number of Black-owned businesses in the country. But 96% of those businesses are sole proprietorships. Many of them, however, employ a number of people. They're just 1099 employees but they don't get counted in census data. And so it skews the perspective. And among businesses in terms of value, the median business value for Black-owned business is $58,000 compared to $658,000 for a White-owned business. So there's a lot of opportunity to change that reality that certainly we have to accept the reality that these disparities exist in a major way and will continue to grow and have continued to grow in light of the impact that the pandemic has had.
09:02 - 10:11
And a lot of it is related to the fact that Black-owned businesses, for example, Black people in general, have had difficulty developing and sustaining generational wealth. And Black-owned businesses don't have the same access to, for example, early-stage capital, friends and family capital, early seed capital, because Black people in general haven't had the same opportunity to develop wealth. And that's been as a result of historical policies that have impacted Black people's ability to access programs over time that would have allowed them to develop wealth. There had been social programs that have benefited other communities, particularly the White community, whether it be from land that was transitioned from indigenous people to White people as this country developed, or from programs like the Homestead Act or the GI Bill that Black people weren't able to really fully benefit from. So there's a reason for it. It's not just personal choice or individual behavior, and so that has to be addressed in understanding the realities as well. That sole proprietorship statistic just pains me every time I hear it.
10:12 - 10:38
Obviously, we want to applaud and congratulate the opportunities that Black and brown communities have to create their own businesses. It's even more important that we kind of create this ecosystem where our businesses are generating other opportunities for other businesses. Right. And growing beyond just being a sole proprietor-owned business is part of what gets me excited about some of the things you guys are doing.
10:38 - 11:20
You talked a little bit about these gaps. When I look at this from a wealth manager perspective, we have emerging wealth creators, first generation wealth creators, many of whom are Black and brown or very young. Kind of next generation wealth. And I've certainly tried to pivot to really address the unknowns, really addressing that idea that I don't know what I don't know. And how do we, as a firm, you as an organization, help fill those gaps and bring the resources to bear? Which brings me to this idea of creating and promoting thriving communities. You have these pillars along the lines of lead, build and invest, that seeks to address those unknowns and fill those gaps.
11:21 - 12:31
So ultimately, AWBI is here to lead the charge, to confront and erase broad structures and root causes that deny Black people the ability to create and enjoy shared prosperity. And we work to overcome those barriers by disrupting historically biased political and social systems that impact a community's ability to generate influence and have agency over their lives and the lives of their family. We do this by having a really strong focus on building an inclusive economy that really allows us to leverage national and international best practices and bold ideas, bring those ideas locally and share them broadly throughout the ecosystem through thought leadership. Specifically with our community of practice, which is about 45 government, quasi government, nonprofit and philanthropic organizations, we want to ensure that any ideas that are brought to the ecosystem are grounded in what's actually going to be effective and what's really needed on the ground and help guide and in some cases push and reimagine the work so that we can really support dynamic versus incremental change.
12:31 - 13:02
Part of our core principles is centered around addressing the systemic barriers to access to capital. So we provide capacity building grants to nonprofits to help them build on their good work and implement innovative prototypes that might be hard to find funding for. We know that what we've been doing isn't working as effectively as it could. So we want to provide space for those nonprofits to explore other ways to help people in the community.
13:02 - 14:09
And then we also provide grants and loans to Black-owned businesses. So last year, for example, we provided about a $800,000 in grants and loans to Black-owned businesses, in addition to the dollars that we granted to nonprofits. The key about that investment was that we're very data centered. So we knew from our data that we gathered about the impact of COVID, is that we need a really flexible terms, really flexible underwriting criteria, because we know that often Black-owned businesses can show up differently because the business owners have had to be so creative in capitalizing their businesses early on. They might be the only entrepreneur they know. They might not know any other entrepreneurs that have scaled a business like theirs. There haven't quite gotten to the level to be a member of the country club to get guidance on a regular basis. And so that social capital piece, in addition to access to financial capital, is really critical. So we help close the gap there and create opportunities to provide space and focus so that our businesses and residents get the help that they need.
14:10 - 14:34
Last year in 2020, every communication you and I had, I believe, was by text, mainly because you were very busy helping to give the resource to businesses during such a difficult time. Let me just throw something in the atmosphere. What's that feel good story. Give us an example. What really inspired you do the work and the help you provided to a business or a number of businesses last year?
14:34 - 14:48
We are very fortunate in that we have a number of those stories, and it ranges from our partnership with the James [...], which is a wonderful place. If you haven't been, I encourage to go right along the Beltline.
14:48 - 14:48
14:51 - 15:21
We have so many. But one that comes to mind, just had some really fantastic recent wins and also, shows that the continuum of support that we're trying to provide for businesses that we refer to as a missing middle. And those businesses are here locally, tend to be between a hundred thousand to one point five million in revenue. They have established a market, but are still figuring out how to how to scale and create infrastructure for their businesses so they can thrive.
15:21 - 15:54
But they're beyond an incubator curriculum kind of phase or accelerator phase, and not quite at the point where they're on a consistent meeting basis with their financial service providers. And so that social capital, that one-on-one access to expertise that they can afford or that is supported through grants like the ones that we provide through nonprofits or hiring consultants to advise them is less about charity and more about every business could use an entrepreneur in residence, if you will.
15:55 - 16:41
So one story that comes to mind is a business owner, Terry Michel, who has a company called Brown Tourbox, which is a African American themed tour box, that her original market was with the various school systems in the region. And with the impact of the pandemic and schools closing, that was her revenue stream. And at the time, she was kind of at the lower end of the spectrum in terms of revenue for our "missing-middle" group, but still a great product. And I know that because one of the things that I like to emphasize is that's important to be proximate. It's important to be in community and to know who you're serving in a way so that when it's time to help, you know who you're dealing with and that will help you better assess risk.
16:41 - 17:11
Fast forward to the pandemic. She came to us for a grant, we also gave her a grant and a loan to help her get to the next stage of surviving the pandemic. We helped to connect directly with technical assistance that could help her with our e-commerce strategy and crisis management strategy. Then that turned into additional access, technical expertise to one on one, to try to figure out what she needed to do with her business, both with partnerships with other nonprofits and legal counsel in the market.
17:12 - 17:43
So that was April of last year, July of last year for the loan. Fast forward to February of this year. Now, her themed boxes are going to be in all the Targets across the nation. And I just found out that now there also will be a Walmart and the key there about this continuum of support. First of all, kudos to her for positioning in these wonderful opportunities, but she has shared openly that we were the first people to give her money when nobody would give her anything.
17:44 - 18:18
And if we had not given her that relatively really small grant and loan, there's no way she would have been able to sustain that business to get to the point to be in position to take advantage of this great opportunity with Target and Walmart. And now she's at the stage where she needs much, much more capital. And we will introduce her to more traditional capital providers and technical expertise to make sure that she's well positioned to scale at that level and be retail ready at that level, and have the capital she needs to build infrastructure she needs to succeed.
18:19 - 19:31
I'd love this approach to focus in many instances on that missing middle. A lot of times when we are convening all of our resources, it's, hey, let's get this person or company up and running or hey, let's help this person or company or idea sustain. But the middle part, there is the growth opportunity. Right. And by focusing on a growth opportunity now, she and her business may have a bigger role in contributing to employing other people, being a contributor to inclusive procurement, supply, and diversity. So it kind of reminds me of, in some sense, this idea of, in the wealth world, kind of holding the hand of people who are going through the journey. A lot of times in financial services, we are great at showing up when you got a little bit of money, but how well are we holding your hand through the process to get you from one end of the spectrum to another? And that's where a lot of the work has to take place. That's where you see a lot of the successes. But that's how you create the legacies, right? In a sense of wealth management, that's where you create the generational legacy. In a sense of helping businesses grow, right, that's where you get to the sustainability and start to contribute to the ecosystem.
19:31 - 20:25
And I just...I gotta tell you, I'm not here to plug AllianceBernstein, but I've had personal lived experience with you all when I had my estate planning firm and your wonderful resources with how you pull together legacy plans and the data that you provide and you provided to me and my firm so that I could share with my clients to paint this broader picture for them of what they need to be considering doing their legacy. And that was incredibly important, that partnership where I was a very small firm, I wasn't necessarily contributing at all to you all's bottom line, but certainly being a partner in the community in that way so that you can share your expertise as clients, in my case, mostly Black clients were on that journey. They were young professional athletes or new business owners or established business owners looking to figure out what their exit strategy was going to be for their business or the sale of their business or their next career.
20:25 - 20:56
Well, I appreciate that. And certainly trying to carry that torch. I talk a lot...and many of my colleagues talk about "hiring the firm". What is your experience like beyond the relationship you have with James and his team? How are you leveraging the intellectual property and the capital and resources that we have for being, what, fifty-four years old now, again, bringing those resources to groups and pockets of people who could benefit from that, but just historically have not had the access and opportunity to engage in that way. So I really do appreciate you sharing that.
20:56 - 21:17
I do want to give you the platform to talk a little bit about something that I find really interesting. I try to focus on this idea of making sure that we are building communities that can strive and thrive. Also employment and employees and colleagues who can strive and thrive. Talk a little bit about one 1,000 Black businesses in 1,000 days initiative.
21:18 - 21:49
So 1,000 Black businesses in 1,000 days is a campaign that we have created to help 1,000 Black-owned businesses position themselves through revenue growth to hire at least one employee and pay them a living wage, or pay living wages to those that are already employed. And that speaks to that 96 percent number that I shared earlier about sole proprietorships, but also speaks to the greater opportunity of leveraging certain sectors within our market for revenue growth for Black-owned businesses.
21:49 - 22:19
This program is focused on scalable growth stage and established businesses, but it is really a vehicle for the community wealth building strategies that we employ. So through this program, it has three pillars. First is focused on using procurement as an opportunity to increase revenue growth for Black-owned businesses. In Georgia, there are no requirements to engage with people of color-owned farms for procurement opportunities. And so for that, our prototype partner is Emory University.
22:19 - 23:02
We're working with their nine colleges and 11 healthcare centers to help them reimagine their procurement process and ensure that Black-owned businesses are participating in that process to build upon existing supplier diversity initiatives and instead focus on what percentage of overall spend are Black-owned businesses participating and to reimagine everything from what really is required for insurance, two million dollar insurance requirement for catering versus construction. Is that really on par? Because it certainly is an exclusive environment for Black-owned businesses to participate; and also ensuring that those opportunities are shared broadly.
23:02 - 23:38
There can sometimes be a tendency in procurement to hire the same firms they already know, but then it limits competition and limits access, particularly if there isn't social capital in place to allow them access. So we are pushing for that social capital to extend to Black-owned businesses. But on the other side, we are preparing those businesses to be competitive, helping them through a procurement consultant to have successful bids, ensuring that the technical aspects and infrastructure companies are ready for those sorts of opportunities, in some cases facilitating JV relationships so they can go after bigger contracts.
23:38 - 24:14
Another component of the 1,000 Black businesses campaign is focus on workforce development at the neighborhood level. So what does it mean to be the first employee, what does it mean to be an employee at a business that's never going to be more than 10 employees is a different kind of training than if you're going to a large scale employer. For us to be able to do that at the neighborhood level, connecting neighborhood residents with neighborhood jobs, particularly in the city, helping with that connectivity, but not putting the onus on business owners to do that holistic job training and retention that's needed to help people not only get employment, remain employed.
24:14 - 24:59
Finally, a focus on retention and anti-displacement to ensure that there is affordable commercial space available in the city of Atlanta for Black-owned businesses to establish themselves, to age in place, or grow in place. Communities are vulnerable to market forces in a way that significantly impacts legacy businesses’ ability to age in place or remain in place so they can then transition and successfully exit that company. So we're helping them, one, with the state planning and business succession planning, making sure they have that in place not only to maintain generational wealth within that family or ownership infrastructure, but also ensuring to minimize disruption in the market for that business because it
24:59 - 25:40
ultimately, that business is important to that community and in introducing new models like work-from-home models and shared property space and other things to help think about how to establish those businesses for a successful exit or introducing them to professionals who might have access to resources to start to own a business but don't want to start a business from scratch. All this will help ensure, particularly in our historically Black neighborhoods, there's always a Black-owned dry cleaners or Black-owned restaurants, or whatever it might be. And people have options to stay in the communities where they've grown to love and where those businesses really are staples for the economic development viability of their community.
25:40 - 26:42
That's good stuff. I love how thoughtful the program is, but just as idea, as an example of professional development, we don't think about how unlikely it is for a person who is part of a 10-person business to get access to the development and the advancement of the best practices and all of these things that I do at a firm that has 3500 people. So one, kudos to that, because those are the things that I think are glossed over. The other thing I love is that you and your organization don't look at this and kind of carry the burden of your own. I know you partner with other organizations in Atlanta. I always try to find a way for my team to contribute again to maybe fill some of those gaps. You mentioned selling a business, right? So who are the people that come to the table to help educate and provide the resources to really think through those things? So I just wanted to publicly just share how grateful I am that you guys are so thoughtful. It goes beyond just connecting people with people and providing access to capital.
26:42 - 27:22
So let's wrap up with how do we rewrite the narrative? So many challenges exist. The two of us are certainly committed to addressing the lack of access, the gaps that exist. We're really focused on being very equitable in how we approach kind of creating these ecosystems, advancing the opportunities for Black and brown communities. What is your charge for other organizations or people to participate in rewriting the narrative and creating these opportunities? That may seem out of reach for some, but I think if we galvanize a lot of resources, we could make a big dent in this in short order.
27:22 - 28:00
I would say it depends on the audience, but I will say at the core is this focus on community wealth building. And it's really centered around not just building individual wealth that may extract from the community, to build individual and family wealth, but to build wealth in a way that has a responsibility to the community. We define wealth as more than the money and financial assets because it's critical to the accumulation and sustainability of wealth is power and agency, a sense of control over one's life and destiny, the ability to make choices and craft a future for yourself, your family, your community.
28:00 - 28:35
And as I alluded to earlier, wealth is the social capital of connection. It's the individual capital of skills and the intellectual capital of new ways of operating as well as a natural capital of a healthy ecosystem. And so we start there because often when people think about wealth, they're thinking about asset growth. But we can create this sense of choice and freedom agency in our communities in a way that doesn't necessarily have to increase capital. And individuals, families of some of that around various sectors is available regardless of if we increase individual wealth.
28:35 - 29:15
What is really core to this work, with me thinking about community wealth building is just, it's not radical. There was a time when we knew if our neighbor needed food to eat, there was a time where we supported as a community if a kid needed some extra direction or an opportunity to work at the local shopkeeper's place. And we just had a stronger sense of community instead of individual focus on our own needs. And so that would be the first charge, I would say. It's to think more holistically about wealth, because it's not just about making individuals wealthier. But it's also about building this healthier, thriving community.
29:15 - 30:26
Additionally, it is important to increase proximity with the people who are doing the work or who are directly impacted by those actions to really get an understanding of what will be impactful. It's also about supporting groups and organizations led by people of color to advise on what steps should be taken. It also includes hiring Black people within your organizations and companies and not just for initiatives focused on people of color, but throughout the organization to offer that perspective through each stage of development. For this group, I would say, evaluate your investment portfolios in determining how those portfolios can impact the broader community. Taking a step beyond standard ESG screens to determine the impact of your investments and in the community or looking at alternative investments that could have a greater impact on the community. And then just overall, looking for systemic solutions. So taking a step beyond charity and philanthropy that can sometimes just reinvest in programs that are not dynamically moving the needle because it's not focused on a systems level change that needs to happen.
30:27 - 31:26
Let's push this new term of community capital, which is all of the above— it's the fiscal capital. It's the IP, it's the social capital. Any capital that you have to bring to the table could be a part of the solution. Simply define wealth as the abundance of something you value. And I think the charge we both have and the ask we both have is to figure that out. However you define wealth, however you define affluence, leverage, whatever affluence you have to influence these things that you care about the most and be part of that community collective. Not everyone has the same amount of resource, but everyone has some resource. If we all put that to work under this context of community capital, we'll be able to advance things we care about the most and closing this gap. So with that, thank you again for being a guest. Congrats on the work you're doing. Congrats to the organization. I first learned about AWBI once you got the job. I've been a close follower ever since.
31:26 - 31:29
Thank you. I really appreciate it. And thanks for the opportunity to share more.
31:29 - 31:47
So I hope you enjoyed today's episode. We love to hear from you. So please e-mail your thoughts, questions, and any feedback to diversemarkets@Bernstein.com. Be sure to share, subscribe, and rate us on Apple podcasts or anywhere you listen to podcasts and check us out at BernsteinPWM on Twitter.
31:50 - 31:58
Bernstein: Making money meaningful for individuals, families, and foundations for over 50 years. Visit us at Bernstein.com.
- James Thompson
- SVP—Head of Diverse Markets Strategy