Volume 60: For Us, By Us: Democratizing Investment and Building Community Power in Boston
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Paige Curtis, Culture & Communications Manager at Boston Ujima Project
A multifaceted problem requires a complex solution.
Early in 2018, activists and community members gathered to hear the late Chuck Turner’s five-point plan for the 21st century. Turner, from which our Chuck Turner Arts and Lecture series takes its name, was a prolific activist and politician who advocated fiercely for Boston’s neighborhoods of color while serving as City Councillor for over a decade. His remarks that day perfectly encapsulated the spirit of Ujima.
“The one thing that unites all human beings is creation: we are all creators,” Turner said. “Every day we take part in some kind of creative process.” What if we honored the creative potential of the most marginalized to build an economy that served them? Out of this simple idea of co-creation came Ujima’s guiding principles: collective work and responsibility.
Today in Boston, the average per capita income across BIPOC neighborhoods is $40,740, compared to majority-White neighborhoods, whose average per capita income is $72,151. (1) Black, Indigenous, and other communities of color have contributed significantly to Boston’s economic, physical, social, cultural, and political environments for nearly two centuries. But, early political and legal structures worked to actively undervalue and undermine the efforts of these communities to reap the rewards of their work, sustain themselves, and build assets and wealth. (2) Small businesses, particularly those led by women and people of color – core to Boston’s economy — still struggle to access the capital they need to thrive and compete for individual and institutional customers. These structures evolved to maintain persistent and deep-rooted conditions for poverty.
“Small businesses, particularly those led by women and people of color – core to Boston’s economy — still struggle to access the capital they need to thrive and compete for individual and institutional customers.”
In response to Boston’s notorious racial health and wealth divide, the Boston Ujima Project (“Ujima”) was founded in 2017 as a community-led business and finance ecosystem. We sought to underwrite our people’s strength by directly resourcing what we call our economy builders: our small businesses, artists, and grassroots organizations. People often ask why we chose an ecosystem model, and we always say: a systemic problem requires a systemic solution.
Bringing community power to investment
In December 2018, we were proud to launch the Ujima Fund as the first democratically governed capital fund in the US. Ujima formed the capital fund for our members and supporters to pool investment to help finance the growth of Boston’s BIPOC and cooperatively owned businesses. The Ujima Fund is an alternative and emerging funding source that not only works to fill gaps left by traditional lending (in its height and decline) but also acts as a source of “friends and family” funding for BIPOC and cooperatively owned businesses. Our fund design is unique for advancing “Capital Stack Equity,” by inverting the traditional risk-return relationship by providing higher returns with lower risks to lower-income investors.
Normally, higher-risk capital is compensated with higher returns, but we think about risk differently. For a working-class investor, $100 may be a greater risk than a wealthy investor investing $10,000. The Ujima Capital Fund leverages philanthropic dollars to secure the investments of the working class.
Our democratic investment process begins and ends with community input. Ujima members name local businesses they believe in through our “Businesses We Love” online form. From there, we aggregate a list of all named businesses that members can ratify as an investment plan. From there, our Fund Management team reaches out to businesses named in this plan, inviting them to join our Good Business Alliance. Businesses must adhere to our Good Business Standards (which were created and ratified by Ujima voting members) to be admitted into the Alliance. Businesses interested in investment meet with our Fund team, who conducts standard due diligence. In the end, we only invest in businesses if our voting members (who must be residents of Boston, the majority of whom are BIPOC) approve. Nothing happens without their say-so.
The fund allows working-class Black, Latinx, and Indigenous residents to invest directly in local businesses. The Ujima Fund aims to provide 300+ non-accredited working-class members with new opportunities to build savings (3% annually) by investing in their own community. Foundations and institutional investors earn a 1.5-3% annual rate from Ujima’s mission-aligned investment products.
“The Ujima Fund aims to provide 300+ non-accredited working-class members with new opportunities to build savings (3% annually) by investing in their own community.”
To date, we’ve ratified four community investment plans in over 200 businesses, and the Ujima Fund has raised over $4.8 million from 395 investors. These 370 investors include Ujima members, community members, Founding Business Alliance members, foundations, faith institutions, and civic associations.
Redefining impact
We’re exceptionally grateful to our engaged membership for voting to invest in the following businesses:
2019 | CERO Coop: $100,000 capital loan with a repayment period of eight years at a 4% annual interest rate
2022 | Dorchester Food Cooperative: $25,000 capital loan with a repayment period of seven years at a 5% annual interest rate
2022 | Jazz Urbane Cafe: $200,000 in equity over the course of six years, with pro-rata annual distributions
As noted in our Offering Memorandum, voting members also had the opportunity to approve a sizable investment in Boston’s local arts ecosystem through a series of mini-grants totaling $60,000 to BIPOC, working-class artists. As part of our Ashe Ashe Cultural Assembly, grant recipients were chosen through a participatory process undertaken by Ujima’s Voting Members, who reviewed dozens of art project proposals and voted for their favorites.
At the end of every year, Ujima Fund investees report directly to our community on their financial performance, lessons, and reflections from the year. In 2021, we heard from CERO Coop, who managed to bounce back after COVID-19 disrupted their worker-owned composting business.
“We were deemed an essential service but still lost half of our business, so it took a lot of determination to get through it,” Lor Holmes, co-founder and Business Manager at CERO, said. “By the end of 2021, our revenue surpassed our expectations because we were able to land some big, institutional contracts.” CERO Coop is a business that turned out to be a pandemic success story; early investment from the Ujima Fund undoubtedly played a role.
We think of ourselves as Boston’s hub for a different type of economic development, one with a values-based approach to economics that prioritizes the welfare of people and the planet.
What’s next in Boston, and beyond
Solidarity requires national and global connectivity, so we’re excited by mission-aligned projects in other locales working to democratize wealth. Our newly-created Ujima Translocal Membership is an action-oriented initiative to support peers outside of Boston, establishing economic democracy ecosystems where they are. The Translocal Membership has five components: partnership on Ujima's Quarterly Office Hours, joint fundraising, private organizational 1-on-1 support, whole team check-ins, and ecosystems exchange. Participation in the Translocal Membership program is by invitation only. The Bronx Cooperative Development Initiative and Kensington Corridor Trust were some of our first Translocal members.
“Solidarity requires national and global connectivity, so we’re excited by mission-aligned projects in other locales working to democratize wealth”
As other cities seek to implement a solidarity economy in their region, we recently launched quarterly open office hours to offer support. At the inaugural office hours, this October, organizational peers from the Rockefeller Foundation and Kensington Corridor Trust joined us to answer questions about our mission, model, and ecosystem for those looking to start similar initiatives.
Over the next three years, we project that the Ujima Fund will invest an estimated $2.8 million in small businesses and real estate. In particular, we plan to offer five types of small business loan products: microfinance loans (up to $5,000 each); start-up loans (up to $25,000 each); small business loans (up to $40,000 each); growth loans (up to $100,000 each); and real estate acquisitions (up to $250,000 each). In total, we anticipate lending to 22 small businesses and entrepreneurs by the end of 2025. As we continue to experience significant reverberations from COVID-19, we will remain flexible to the needs of our community and update our projections accordingly.
Our Executive Director, Nia K. Evans, often says, “We must create the air we are walking in, positively impacting what is considered normal and possible.” Economic shifts require cultural ones as well.
Onward.
The Boston Ujima Project is a Black-led, democratic, member-run organization building a cooperative business, arts, and investment ecosystem in Boston, with a mission to return wealth to working-class communities of color. Ujima is bringing together neighbors, workers, business owners, investors, grassroots organizers, and culture-makers to create a community-controlled economy in our city.
This article includes excerpts from previous Ujima writings.
Boston Planning & Development Agency Research Division, February 2020
Federal Reserve Bank of Boston, The Color of Wealth in Boston, available at https://www.bostonfed.org/publications/one-time-pubs/color-of-wealth.aspx.
Interested in learning more?
Join us on January 11, 2023, for the ImpactPHL Conversations Series on Economy Builders on Business Corridors with Impact. Learn more and register.
Paige Curtis is the Culture & Communications Manager at Boston Ujima Project. With interests spanning climate justice and grassroots community development, she creates content and tells stories about Ujima’s solidarity ecosystem. Paige holds a B.A. and Masters in Environmental Management from Yale University.