Wealth With a Conscience

From Mark Twain’s Pudd’nhead Wilson to television’s George Jefferson, wealthy African Americans are seldom accepted on their own terms. When not satirized in the media, they are frequently portrayed as “sell-outs” who “make it” by turning their backs on their own. This negative attitude is partly traceable to sociologist E. Franklin Frazier’s seminal “Black Bourgeoisie: The Rise of a New Middle Class.” In his 1957 study, Frazier, himself African American, accused wealthy blacks of accepting, “unconditionally, the values of the white bourgeois world” because “they do not truly identify themselves with Negroes.” Even this year’s publication of “Our Kind of People: Inside America’s Black Upper Class,” by Lawrence Otis Graham, inadvertently reinforces Frazier’s attitude by focusing on superficial details of some black elite: lavish homes, parties and exclusive clubs.

In Los Angeles, notions about upper-class blacks can be especially misleading. Here the words “black wealth” usually conjure up images of professional athletes and movie stars. It doesn’t help that former Laker Earvin “Magic” Johnson, owner of Johnson Development Corp., makes headlines with every business deal. But while you may not have sipped coffee at the La Tijera Plaza Starbucks, in which Johnson has a stake, or seen a film at the Magic Johnson Theatres at the Baldwin Hills Crenshaw Plaza, you have probably relied, at one time or another, on a Thomas Guide. When Warren B. Wilson, an African American entrepreneur, retired and sold Thomas Bros. Maps to Rand McNally earlier this year, he was sole proprietor of the 200-employee firm with annual sales of $25 million.

The easy focus on celebrity money, ignorance of the long history of black enterprise and lingering skepticism about the racial loyalties of rich black folks--all combine to obscure the truth about black wealth and business ownership in Southern California.

To most people, black business means mom and pop stores, barbecue stands and barber shops located in the ‘hood. These businesses certainly contribute to individual prosperity and neighborhood economies, as well as to local culture. Central Avenue, in its heyday of African American life, represented this kind of vitality. Today, the shops, art galleries, jazz clubs and small merchants located in Leimert Park also offer evidence of a thriving community, in which employment, home ownership and incomes are stable and high.

But the largest black-owned companies aren’t to be found in historically black neighborhoods. Instead, they are spread around Los Angeles--in the South Bay, the financial district, in beach communities, downtown and in manufacturing zones. Black entrepreneurs are in high-tech, garment manufacturing, personal services, aluminum processing and distribution, and aerospace. Los Angeles is the only metropolitan area with three sizable black-owned banks; African Americans own and operate construction-equipment suppliers, major auto dealerships, architecture firms, art galleries and insurance and realty firms. L.A. is also home to the “granddaddy” of large black U.S. companies, C.H. James and Son, Inc., established in 1883.

The fact is, more high-income blacks live in Los Angeles County than anywhere else. A growing number of them own businesses and assets that comprise real wealth. The most recent Census figures show that there are 32,645 black-owned businesses in the county, with total revenue of more that $3.6 billion and 25,082 employees.

These companies are run by African American entrepreneurs who not only successfully compete in the open market and create wealth, but also give back to their communities. The range of their community, civic and charitable involvement is wide. According to Patricia Means, publisher of Turning Point magazine and a member of the board of the Jenessee Center shelter for battered women and children, these entrepreneurs exhibit “a commitment to not only do good for [themselves], but to do good for the community. It comes from tradition. We have been taught to reach back and help somebody. You’re not successful if you don’t.”

They are living proof that Frazier’s generalizations about the black bourgeoisie are outdated.

Compared with other companies, a study by the Joint Center for Political and Economic Studies shows, black businesses “were more likely to participate in programs to assist young people, welfare recipients and individuals from high-poverty neighborhoods.” Indeed, a distinguishing mark of many black-owned companies is a dedication to diversity in their work forces. For example, out of 40 employees at Bazile Metals Service, with annual sales of $15 million, 60% are African American, 35% Latino and 5% white. President Barry Bazile also operates Welfare to Work Partners, a nonprofit that provides education, training and jobs for low-income participants.

Many blacks were first-time owners in their industry and are eager to find ways to keep the doors open for those who follow them. Carl Burhanan, owner of Oasis Aviation, aspires to grow his Marina del Rey-based fuel-supply business from current sales of $41.3 million to $100 million. Yet, aware of his own experiences of racism inside and outside the military, Burhanan helped found the 300-member U.S. Army Black Aviation Assn., which gives scholarships to African American students who want to pursue an aviation career.

Education is a high priority for socially conscious black entrepreneurs. Clarissa Faye Howard, owner of Bd Systems, offers internships for inner-city youth at her $40-million-a-year firm. The founder of the $80-million Act 1 Personnel Services, Janice Bryant Howroyd, funds scholarships for students attending historically black colleges, company internships and, in conjunction with The Links, an exclusive black women’s club, works on a mentoring program, Project Life, for low-income youths in Carson schools. Eric Hanks, who grosses $1 million in annual sales as owner of M. Hanks Gallery, teaches affordable classes on art appreciation and speaks regularly at public schools. Karl Kani, whose company employs 45 and takes in $69 million in annual sales, serves on the advisory board of Mayor Richard Riordan’s after-school enrichment program, L.A.’s Best.

Black businesses’ emphasis on “giving back” flows from fresh memories of discrimination and the knowledge that the history of race in America is in part one of the economic subordination of black people, beginning with slavery and continuing, after Reconstruction, with the exclusion of blacks from certain occupations and professions. Black business owners like Henry O’Bryant, who began in the 1950s by manufacturing uniforms for once-fledgling companies like McDonald’s, recalls being told at the Frank Wiggins Trade School that tailoring classes were “reserved for white kids.” Broadway Federal Bank, with $139.5 million in assets and $119 million in deposits, was established in 1946 by H. Claude Hudson, dentist and Los Angeles NAACP founder, to satisfy the post-World War II demand for homeownership when black GIs were denied mortgages by mainstream banks.

L.A.’s black business owners, however, tend not to harbor anger over the inequities of the past or present. They are more likely to exhibit the faith of Biddy Mason. Mason, a former slave, built a fortune in downtown real estate and nursing homes before her death in 1891. In addition to her business acumen, she founded a church and was a philanthropist and political agitator. Mason taught that, “If you hold your hand closed, nothing good can come in. The open hand is blessed, for it gives in abundance, even as it receives.”

Political debate among blacks still makes much of the contentious rift between Booker T. Washington and W.E.B. Du Bois over which road leads to freedom. Du Bois, a founder of the National Assn. for the Advancement of Colored People, criticized Washington, president of Tuskegee Institute, for embracing black capitalism and shying away from what he considered to be necessary political engagement on behalf of full rights for all blacks. What few know is that the idea for Washington’s premiere organization, the National Negro Business League, founded in 1900, came from Du Bois. It was Du Bois who organized the university conference at which he proposed the federation of local businesses that would enable black people to join “the industrial and mercantile spirit of the age.”

If generating economic power means stronger black representation in society and politics, there is obviously scant cause for scoffing at black wealth. African American entrepreneurs face the same challenges as other business owners, and then some. They battle traces of historical discrimination, a lack of available capital and the tough competition that marks the huge, diverse L.A. market, the biggest business base in the country. Here, where the African American population has always been proportionately low, black-owned businesses are vastly outnumbered not only by those owned by whites, but also by those run by Latinos and Asian Americans.

Given history’s shameful determination to limit black economic independence, African American entrepreneurs have a unique story to share about the arc of success. But their real success lies in a near-universal commitment to community and civic service. Theirs is a corporate model worth emulating.