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Donation News Organizations The Power of Giving

Magic Johnson’s EquiTrust to Donate $100M to Support Minority-Owned Businesses

When Earvin “Magic” Johnson retired from playing professional basketball in 2000, it was already obvious that he was not the sort of man who would just retire and ride out his substantial fortune for the rest of his days. He’d already tried his hand at coaching, and at hosting a television show, and starting a record label. And he was just getting started.

Today, Johnson runs Magic Johnson Enterprises, a diverse conglomerate company with a net worth over $700 million, which dabbles in dozens of different industries. Briefly, he owned 125 Starbucks locations. At another time, a chain of movie theaters in his name. For a while, he owned part of the L.A. Lakers and a Pepsi bottling plant in Washington. And he continues to own a controlling interest in EquiTrust Life Insurance Company.

Under his direction, EquiTrust is going to donate $100 million in capital to fund federal loans for business owners who have been struck down by the COVID-19 pandemic, prioritizing minorities and children.

The donation, which will be distributed as forgivable loans via lender MBE Capital Partners, will be governed by the federal government’s Paycheck Protection Program, the small business stimulus plan meant to help small businesses keep their staff on the payroll, giving them a greater chance of weathering the crisis.

“These are incredible businesses, small businesses, that have been the pillar of our community that also employ a lot of black and brown people in our community,” Johnson said on MSNBC on Sunday, May 17. “… We wanted to make sure that minority-owned businesses got small business loans through the PPP program.”

His statement alludes to the concern that minority-owned businesses have been left out, after the PPP stimulus has run out, been renewed, and run out of funds again, with large percentages of the package being snapped up by businesses which are not by any means ‘small.’

Source: CNN

Editorial credit: EPG_EuroPhotoGraphics / Shutterstock.com

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Advice

The Nonprofit Sector is Failing the People it Means to Serve

The nonprofit sector is failing people of color and other under-served communities. While there are plenty of organizations that work with these groups, rarely are they actually run by people from these communities. Even when they are, these organizations tend to be lacking in the kinds of operational capital that makes other organizations successful.

As Candi Cdebaca, the young CEO of Project VOYCE points out, this is because the nonprofit sector is predicated on privilege. It was founded by rich white people to help others and has developed into a system that maintains both privilege and poverty. After all, without people to help, there would be no nonprofit sector.

That may sound hard to swallow, but if it is, it may be because you’re a part of the problem. This isn’t to say that you, dear reader, are actively working to oppress people and further the goals of privilege and white supremacy. In fact, if you’re reading this, you probably aren’t consciously doing these things. But the problem is, as 2016 in general has done an excellent job of showing, these systems perpetuate themselves subtly.

Cdebaca doesn’t suggest some overarching solution to the problem, that’s beyond the scope of her piece and well beyond the scope of this website as well. But what’s important is that we realize these issues exist, and begin a conversationlocally, nationally, globally, about how to fix this issue. Many of us have argued that having more people of color at the head of nonprofits, especially those geared towards the issues faced by people of color, would make a big difference. Although it definitely would, it’s something that we haven’t even come close to accomplishing yet.

But diversity on it’s own isn’t enough. Diversity needs support in order to work, because all the nonprofit CEOs of color in the world can’t help if the color of their skin continues to prevent them from having access to capital and resources.

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Organizations Resources

A Shot at the Ivy Leagues

Ivy League
IMG: via Shutterstock

New York City is a hotbed for creative, talented minorities who may never make it out of Brooklyn.  This is a shame because everyone else could benefit from their immense talent.  The problem is that there are not enough resources to supplement ordinary schooling.

A Harvard and Stanford study that came out this year emphasized the inadequacy of how low-income students are represented at selective colleges and universities.  What it showed was that “only 34 percent of the highest-achieving high-school seniors whose families fell in the bottom quarter of income distribution – versus 78 percent in the top quarter – attended one of the country’s most selective colleges, based on a list of nearly 250 schools compiled by Barron’s.”

However, the good news is that there are scouts in New York City seeking out the best and brightest.  In 1978, Gary Simons, a teacher from the Bronx, founded Prep for Prep.  His goal was to find talented students of color and prepare them to go to private schools.  So far, hundreds of his students have gone on to law, medicine, and business schools and work at some of the most prestigious firms.

Feeling that Prep for Prep was not enough, Simons and others later founded Leadership Enterprise for a Diverse America, or LEDA.  Their aim was to seek out and advance the best students from public high schools from around the country regardless of race.  Yet, almost all the students come from families who earn less than $55,000 per year.

Another popular program is Sponsors for Educational Opportunities, or S.E.O., whose mission is to provide “supe­rior edu­ca­tional and career pro­grams to young peo­ple from under-­served com­mu­ni­ties to max­i­mize their oppor­tu­ni­ties for col­lege and career success.”

When you look at the success rate of students who have attended programs LEDA and S.E.O., you can see why wealthy donors would want to contribute funding.  Recently Henry Kravis pledged $4 million in matching funds to S.E.O., which must have surely been a happy surprise.

The training they provide goes side-by-side with regular schooling to give exceptional students a shot at success.  S.E.O. was started by Manhattan lawyers and advertising executives over 50 years ago, yet it is still as successful as ever.