Boston Communities Unite to Democratize Their Economy – Next City

Boston Communities Unite to Democratize Their Economy

Priscilla Flint Banks, co-founder of the Black Economic Justice Institute, calls the vote to officially form the Boston Ujima Project. Lynette Perry, of City Life Vida Urbana, is sitting on the first step. (Photo by Oscar Perry Abello)

On a typical Saturday, Lynette Perry goes to prayer hour with a close friend. She might also go to the gym, or maybe for a long bike ride. Or maybe she’ll spend time with her grandson. Last Saturday, though, Perry joined a few dozen fellow Bostonians in the courtyard at the First Church in Roxbury, where they gathered to formally launch an effort to democratize their economy.

“I like the idea of changing the capitalistic way of doing things now, getting our own power, funding businesses out of our own pool of resources,” says Perry, who works at City Life Vida Urbana, a housing justice organization in Boston. “I’m an optimist. I think things can change. I think in order to do it you have to be proactive. So I’m for it and I’m willing to take the steps to help it move.”

The gathering was the founding general assembly of the Boston Ujima Project, a democratically governed organization with a mission to build a community-controlled economy in Boston’s working-class communities of color. The assembly was the culmination of several years of community organizing with a wide array of housing justice groups, civil rights groups, local unions, investors and others. Ujima (oo-JEE-mah) is a Swahili word, and one of the principles celebrated in the festival of Kwanzaa. It means “collective work and responsibility.”

Through a democratic process designed to elevate historically underprivileged voices, the Boston Ujima Project wants residents to plan neighborhood investments in businesses and, potentially, real estate. Similar to the way community land trusts have become a model for community control of land, the Boston Ujima Project hopes it can become an inspiration for other communities to take control of capital.

The group will start with a fund that’s fueled by capital from working-class communities of color. But they also plan to grow and find investors open to their democratic process, backers who accept that decisions to invest will be made on terms that residents have decided together, into projects they’ve chosen together.

“We’re going to decide together and we are explicit about the voices that we want to make sure we honor,” says Nia Evans, executive director of the Boston Ujima Project. “We’re not going to pretend that we’re all entering this equally. We’re mindful of the reality that we’re all entering with some kind of background as to how we relate to each other so there’s going to have to be some relearning as well among our members.”

For example, while businesses and investors will have a say and provide key input into the project’s governing process, they will take a back seat to voting members and community organizing groups. Voting will be based on the principle of one member, one vote; regardless of how much any individual has invested, every voting member’s vote counts the same. Voting members must be Boston residents. The group had considered extending voting rights to the Greater Boston region, but it was too large to be feasible for a grassroots democratic process.

“Boston proper makes sense given what we want to do with creating a local economy,” says Evans, who previously served as executive director of the NAACP’s Boston chapter.

Anyone outside Boston may choose to become a non-voting “solidarity” member if they wish to invest or otherwise be involved in the project. There is no limit on the number of members. They’ll even allow Boston residents to choose a solidarity membership if they wish to recognize that they already have enough existing power and privilege in their lives outside of the project.

At the founding general assembly on Saturday, Aaron Tanaka, founder of the Center for Economic Democracy and founding member of the project’s (unelected) steering committee, led a simulation of the proposed democratic process for planning and investing. Voting members were first segmented into neighborhood assemblies, one for each of Boston’s working-class communities of color: Roxbury, Dorchester, Jamaica Plain, East Boston, Mattapan and Roslindale. Each neighborhood then listed “businesses we love” that were worth preserving or growing, followed by “businesses we need.” The lists stood in for what will in the future be more comprehensive neighborhood investment plans.

Going forward, the Boston Ujima Project is leaning on existing community organizing and civil rights groups, like City Life Vida Urbana, the Black Economic Justice Institute and Right to the City, to serve as primary organizers for neighborhood assemblies.

In Saturday’s simulation, the East Boston neighborhood assembly “issued an RFP” for a vacant storefront. To be eligible to respond, a business must join or already be a member of the Ujima Business Alliance, meaning it has passed an evaluation for upholding standards like paying a living wage and benefits, fair scheduling or other requirements. To win the RFP, a business must get a majority of neighborhood assembly votes in favor, regardless of whether it is the only business to reply.

“I’m looking forward to voting on the different businesses to go in different venues,” adds Perry, who lives in Mattapan.

The Business Alliance has already begun to form. Members include the Bowdoin Bike School, CERO (a worker-owned commercial composting company in Dorchester), Democracy Brewing (a worker-owned beer brewery and pub), Dorchester Food Co-op, Fresh Food Generation, Haley House Bakery and Cafe, LifeForce 2.0, Restoring Roots Landscaping Co-op, Sydney Janey Design and Boston Paper Works, and Norma Rosario Catering.

The Boston Ujima Project wants to invest in businesses rooted in social or racial justice movements. Bowdoin Bike School’s founder, Noah De Amor, addressed the group on Friday evening as part of the launch ceremonies, illustrating an example of what that means.

“The business is a vehicle for achieving our goal of people using the bike as a means of economic self-sufficiency, achieving transit equity and achieving health equity,” De Amor said. “If we open a business and we work hard at this business, we can produce enough with our hands to build the kind of community we want to see. I opened up a bicycle shop not just to create a business but to create a space, the likes of which I never had access to growing up.”

While Boston’s working-class communities of color have some capital to invest in projects, the Boston Ujima Project is under no illusions that they have all the money they need. The city has one of the biggest racial wealth disparities in the country: In Boston, the median net worth of white households is $247,500, compared to just $8 for black households, according to the Federal Reserve Bank of Boston. Organizers will have to convince outside investors to trust their democratic process and play on their terms. The primary responsibility for facilitating conversations with investors falls on Lucas Turner-Owens.

After a stint in Washington, D.C., focusing on economic policy and also providing technical assistance to worker cooperatives, Turner-Owens returned to his native Boston earlier this year. He soon grew displeased with the field in which he had landed — impact investing, a growing subset of investors who look for a bottom line that includes positive social or environmental impact as well as financial returns.

“I sort of liked the approach, but I didn’t hear anything about doing a town hall, or checking in with the residents.” says Turner-Owens. “It was like really wealthy white donors and foundations of really wealthy white families that had just decided they’re going to do this. I said this seems like really important work, but where’s the lever for community members to either decide how this capital gets directed or to invest in [a Boston Ujima Project] type of a fund themselves.”

Then, one day this past summer, Turner-Owens ran into Evans in Roxbury, right when Evans was hiring the project’s first fund manager. They needed to find someone with experience in investing and finance, as well as experience in helping new and existing businesses professionalize their accounting and marketing and other practices. Ideally, this person also would be a person of color who was originally from one of Boston’s working-class communities of color. Turner-Owens, who grew up in Mattapan, fit the bill.

“It’s a dream job,” says Turner-Owens, who became fund manager at the end of August and will be working closely with the investment committee to raise capital, perform due diligence on investments, and communicate findings in plain language to Ujima’s general assembly members.

One of the keys to gaining investor confidence is planning for the right amount of failure, Turner-Owens explains. The Boston Ujima Project needs to show they’ve planned for some, but not too much, or else it starts to look like they are being too risky. They’ll keep a loan loss reserve — a pool of cash ready in case a business fails or can’t make a payment. Besides individual donations or grants from foundations, $5 of every membership fee goes into the loan loss reserve.

They also need to show how they’ll reduce risk, for example by providing or connecting businesses to technical assistance to professionalize and strengthen basic business operations like accounting and human resources. The community process is also part of reducing the fund’s risk — they can show that residents who live near borrowers have voted for those businesses to be located there in the first place, and have invested some of their own savings in that business.

In addition to investors, the group is also looking ahead to organize around policies like payments in lieu of taxes — payments made voluntarily by nonprofits to local governments as a substitute for property taxes. The latest estimates are that Boston loses out on nearly half a billion in taxes on the $13.7 billion worth of land and buildings owned by Boston nonprofits such as hospitals and colleges or universities. The project’s community organizing partners want to rally around increasing the amount that nonprofits pay in Boston, with some of the potential cash flowing into Ujima’s investment fund.

The Boston Ujima Project plans to raise at least $2.5 million, perhaps as much as $5 million in capital within two years. If all goes as planned, they think they can raise another $20 million by 2020. Having come from the world of impact investing, Turner-Owens isn’t too worried about finding enough investors who will accept Ujima’s terms and its democratic process for picking investments on the ground. The bigger priority right now, he says, is getting a diverse pipeline of business opportunities ready for investment.

The group expects to begin raising capital by the end of this fall, and to elect a founding board of directors by the end of the year, as well as form the standards committee, investment committee, and a values committee that will serve an ombudsman-like capacity to evaluate whether the project is meeting its goals for democratization and equity.

“I am looking forward to digging in with our members now and tackling some of the questions that we started to go over, thinking about what our regular planning processes are going to be, even some of the more mundane areas,” says Evans. Some of those areas include determining what percentage of their board or their committees must be people of color, or women of color, or from low- or moderate-income neighborhoods.

They may even need a vote on whether to measure income using Boston’s Area Median Income ($103,400 for a family of four), which includes wealthier parts of the region outside the city, or use the Boston Median Income (closer to $70,000 for a family of four), which includes only Boston city residents.

“People have been willing to allow us to make some mistakes and we’ve been responsive to the feedback we’ve received,” says Evans. “One of the pieces of feedback we received has been the desire to learn more.”

Oscar is a Next City contributing writer, and was a Next City 2015-2016 equitable cities fellow. A New York City-based journalist with a background in global development and social enterprise, he has written about impact investing, microfinance, fair trade, entrepreneurship and more for publications such as Fast Company and NextBillion.net. He has a B.A. in Economics from Villanova University.

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