The late
Lisa Y. Sullivan

In their important study of black and white wealth, Melvin Oliver and Thomas Shapiro identify a troubling and persistent wealth gap underlying America’s racial inequality. Two annual news reports highlight this gap: one is a list of the year’s highest income earners; the other a list of the wealthiest Americans. For the past two decades the income list has included African-American athletes and entertainers such as Michael Jackson, Bill Cosby, Oprah Winfrey and Michael Jordan. But Forbes’s annual profile of the nation’s wealthiest 400 – those people whose assets or command over monetary resources place them at the top of the American economic hierarchy – contains few if any African-Americans. The sobering reality is that the Black America lacks assets, one of the pillars of stability and security for middle-class whites. Racial segregation and discrimination prohibited earlier generations of African-Americans from building up much, if any, wealth. With no savings and no inheritance, little wealth transferred to later generations. Likewise, without the wealth to invest in business development, entrepreneurship lagged in the African- American community.

That is changing. Over the last 30 years, black America has experienced phenomenal growth in both its business leadership class and its actual number of millionaires. These self-employed entrepreneurs and corporate executives have come to be defined by what is now acknowledged as the "New Black Power." As the August 1997 Fortune magazine proclaimed, from Wall Street to Hollywood, a new generation of African-Americans is seizing real power in the world of business. Within the music industry, young hip-hop artists are using hit records as a stepping-stone to business development and ownership. They are ambitious on a scale their predecessors never dared to reach for, and the most savvy members of the generation understand, in no uncertain terms, that money is power. It is this generations’ focus on wealth accumulation that distinguishes them from their predecessors.

As this generation of black millionaires turns to philanthropy, however, their legacy remains to be seen. In many ways these hip-hop entrepreneurs are no different from their white Generation X dot-com counterparts. They look at business and government differently than their parents, preferring a new ethic of self-reliance. Lacking confidence in government’s ability to solve problems or guarantee a secure economic future, white Internet entrepreneurs and black hip-hop entrepreneurs believe in ownership, money and clout. The members of this generation will undoubtedly have the means to finance a new movement for justice and equality; whether or not they do so depends on their ability to build networks and institutions that combine hip-hop sensibilities with a broader understanding of how wealth and power operate in society at large.

Model Entrepreneurs

Among black urban youth, two pioneer post-civil rights entrepreneurs stand out: film maker Spike Lee and music executive Russell Simmons. Both in their early 40s, Lee and Simmons are the forerunners of this new breed of urban entrepreneurs. As Chief Executive Officer of Rush Communications, Simmons leads the second largest black-owned entertainment company in the U.S. (Black Entertainment Television Holding, Inc., is first.) Since founding Def Jam Recordings in 1985 – the largest subsidiary of Rush communications – Simmons has methodically spread his reach across the entertainment industry into fashion, film, television, publishing and advertising. Most recently, he has launched an Internet venture. A corporate executive and not an artist, he is considered the consummate example of a true player in the hip-hop music and entertainment industry.

Likewise, Spike Lee is another important purveyor of hip-hop culture who has methodically reinvented himself from an artist/producer of films, commercials, books and clothing for his production company, 40 Acres and a Mule, Inc. to President and Creative Director of Spike DDB Needham Worldwide, a leading Madison Avenue advertising agency. In an unusual joint venture where Lee owns 51 percent of the company, he hopes to employ his entrepreneurial aptitude and insights into urban America. As DDB Needham begins to shift its vision in advertising from mass markets to targeted consumer cohorts with tailored messages, Spike DDB is poised to become a leader in urban advertising.

Because of Simmons and Lee, the business development ethos of hip-hop culture is alive and well among the current generation of artists and executives. For example, Bad Boy Entertainment CEO, Sean "Puffy" Combs, is proprietor of a restaurant, has established himself in the fashion industry with a signature clothing line for men, publishes a hip-hop magazine, and has most recently launched an Internet venture. Other examples of Hip-Hop entrepreneurship include the Wu-Tang Clan’s apparel line and clothing store; Fat Joe’s barbershop; and DJ Spinderella’s She Thing Salon/Day Spa in Queens, New York. Although many of these entrepreneurial ventures have been successful, huge challenges often face those artists who have little or no business experience.

Driven by the desire to be "large and in charge," black would-be music industry moguls are constantly looking for their white power comparison. But they have yet to systematically study how power operates and behaves politically, preferring instead to mimic its ostentatious style rather than comprehend and replicate its politics of substance. Unaddressed, this shortcoming may threaten not only these nascent business empires but also imperil the generation’s philanthropic legacy. In business, hip-hop artists often surround themselves with groupies, relatives and friends instead of business mentors and professional advisors. As they turn to philanthropy, the learning curve will be even sharper.

Philanthropy and Black Power

The New Yorker magazine once identified David Geffen as the only man in the history of American cultural capitalism to succeed in three different industries – popular music, Broadway theater, and Hollywood film. Geffen’s success story fuels the imagination of new black millionaires like Combs, Lee and Simmons. From the humble origins of a Brooklyn working-class Jewish family, Geffen has become a multi-millionaire mogul who has a personal relationship with former President Bill Clinton.

While understanding Geffen’s influence in Hollywood is important, it is his role as a philanthropist that may have the most relevance for hip-hop culture’s ability to achieve the level of success and clout it desires. By serving on the board of numerous nonprofit organizations, giving generously to political campaigns at the national and state level and identifying issues that he cares about passionately, Geffen’s power extends well beyond the entertainment industry. That he recognizes the need to broaden his reach and interact with peers outside the cultural sphere, especially in the nonprofit sector, is precisely the lesson that new black millionaires have yet to learn or cultivate.

Historically, elites of all races have played a major role in philanthropy by founding, sustaining, and overseeing the non-profit sector. In the process, philanthropy has become a mark of class status that contributes to the maintenance of the boundaries of elite society. In most instances, elite philanthropy involves far more than monetary contributions. Giving does not occur in isolation, but is part of an overall involvement with a nonprofit organization or cause. Fostering a sense of involvement is a strategy that is quite consciously incorporated into fundraising among elites. Contributions of money are accompanied by social relationships and organizational involvement. Hence, David Geffen is an activist, advocate and fundraiser for gay rights and AIDS awareness and prevention organizations. And he uses his power inside and outside the entertainment industry as leverage with politicians, scientists, bureaucrats and anyone else that has the power to affect his issues.

Within the black community, the tradition of philanthropy has taken on a different role than that described above. Profoundly shaped by the lack of black wealth and the existence of racial discrimination, the history of black philanthropy coincides with the self-help ideology that has dominated black social and political thought since slavery. Unable to depend on whites or government, the black community, primarily through its institutions, the church and its social and civic organizations, has raised money to educate its young, take care of the sick, bury the dead, and build schools, community centers and businesses. Most importantly, black philanthropy actively supported the non-violent direct action social movement of the 1960s that dismantled legal segregation in the American South.

Despite the historical disparity in wealth, black philanthropy is experiencing growth and development as the Baby Boom and Silent Generations begin to accumulate new wealth. To date, the most notable beneficiaries have been the historically-black colleges and universities, traditional civil rights organizations and the black church. But the new black millionaires of the post-civil rights generation have yet to organize themselves or even demonstrate an understanding of the power of philanthropy outside these conventional bounds.

Although most young black artists and athletes do give to charity and have established some sort of foundation or community-based nonprofit, it seems that they have yet to figure out the social impact they could have on black America if they consciously organized their money to invest in social change, justice and equality through philanthropy and the nonprofit sector. Meanwhile, the multitude of Silicon Valley millionaires have already gotten the attention of traditional philanthropy, setting up new foundations, philanthropic organizations and donor circles. As hundreds of these young white millionaires begin coalescing into a network of young, rich people, their potential to transform society is being compared to the turn of the century when the railroad, steel and oil barons socially engineered the industrial cities. Essentially, this new generation of predominantly white techno-millionaires is forming a new philanthropic network and infrastructure that, for better or for worse, will reshape this century’s social and cultural landscape.

As this new generation of wealth gets older and starts to think about its personal legacies, they have begun to found new foundations and other nonprofit organizations to promote their new brand of giving. These techno-millionaires are actively engaged in remaking philanthropy for the 21^st century. As we prepare for the transfer of this new wealth, the generation of dot-com entrepreneurs is introducing hard-core business practices and approaches to the nonprofit sector. For them, nonprofit organizations represent much more than a "tax-dodge." Brash young millionaires see their mission as blending philanthropy with entrepreneurship -- a new cutting-edge idea known in some circles as venture philanthropy. Yet few have demonstrated a willingness to address head-on vexing social questions: the wealth gap; racial disparities in education, housing and drug sentencing; structural issues of poverty and inequality.

Into the next century, the central question facing the new black millionaires will focus on their legacy. Will they finance a new social movement for justice and equality? Will they endow black institutions for posterity? Will they finance political education, candidates and campaigns or will they speak out on critical social and political issues of the day? At the moment, it is not altogether clear what they will do as leaders in the black community. What is absolutely clear, whether they understand it or not, is that these new young artists, entrepreneurs, business executive and athletes represent the new wealth and potential resource base for sustaining 21^st century black institutional life and social justice in America. It is time black leadership assume responsibility for convening, adequately preparing and supporting these young people to provide leadership as the new venture philanthropists of black America.

Lisa Y. Sullivan is the founder and president of Listen, Inc., a Washington, DC-based nonprofit dedicated to building the next generation of youth leadership in poor urban communities of color.

This article originally appeared in the Fall 2000 issue of Responsive Philanthropy. Copyright© 2000, National Committee for Responsive Philanthropy. And it was reprinted by permission in Gibbs