NEWARK, NJ — A program initiative initially based in Newark to provide capital to the city’s Black and Latinx business owners and communities is now planned to expand to Paterson, as well as six other cities across the state.
The Newark FAM Fund (Newark 40 Acres and a Mule Fund), which launched in 2020, is seeking to raise $100 million, officials announced on Thursday. The initiative is aimed to combat social and economic inequalities as a result of systemic racism.
Following the announcement, the program was renamed The New Jersey 40 Acres and a Mule Fund to acknowledge a partnership between the cities: Newark, Orange, East Orange, Paterson, Camden, Trenton, Irvington and Atlantic City.
“Today is a pivotal moment in the quest for racial equality for economic development in the state of New Jersey,” Bernel Hall, managing partner of the New Jersey FAM Fund said.
Hall explained that the goal is to raise $10 million by the end of the first quarter of 2021, which he said the fund is quickly approaching and is expecting commitments from additional investors in the coming weeks.
The median net worth of New Jersey’s white families is $309,000, while the median for New Jersey’s Latinx and Black families is just $7,020 and $5,900 - one of the worst racial wealth gaps in the nation, according to the New Jersey Institute for Social Justice. The objective of the fund is to close these gaps by providing Black and Latinx business owners with a more level playing field with their competitors.
When the fund originally launched, it came at a pivotal time for small businesses in Newark, many of which did not receive emergency federal Payroll Protection Program (PPP) loans to support operations during the pandemic. Most of the $77.3 million distribution in Brick City went to C-type corporations, according to data from the U.S. Small Business Association.
“This was an idea birthed out of the pandemic and the issues that businesses were going through, and the lack of PPP that was seeming to get to our community,” Newark Mayor Ras Baraka said. “Particularly, small Black and brown businesses in our city really had no way to compete to get this PPP and had no way to get access to capital and revenue, so they were just being pushed to the wayside.”
Given the program’s early success, Baraka wanted to do more for other minority business owners.
“At first, we were just thinking about Newark, but our people move around from city-to-city throughout the state, and I would be remiss for us to just try to help businesses in Newark,” he said. “If we do what we truly need to do in terms of reducing this wealth gap, then we need to invite the other municipalities that look like us into this fold and give them the opportunity to partner with us on this journey.”
Upon the announcement of the fund’s expansion, Hall said that investors such as AT&T, Panasonic, RWJBarnabas Health and Shaquille O’Neal, a Newark native, among others have already committed to the fund.
“The past year has been extremely difficult and put a spotlight on the racial wealth gap that exists in our country, but we cannot pretend that this problem is something new,” Hall said. “We look forward to expanding this initiative as partners come to the table. Through the fund, our goal is to help Black and Latinx business owners and developers to expand their operations, create jobs and generate wealth for the communities that they serve.”
Mayors from the program's newest cities commended the fund's efforts and expressed their content to partner with it.
“There is strength in solidarity and I am honored to join forces with my conscientious colleagues to support this imperative initiative,” Paterson Mayor Sayegh said. “We are mayors meeting the moment and our Latinx and Black businesses need our leadership now more than ever.”
“When the difference in median net worth between white families and Black/Latinx families is nearly 200%, that is much more than a social disparity. That kind of gap is representative of the inequitable financial policies that have kept Black and Latinx businesses and families behind the national curve for decades," East Orange Mayor Ted Green said. "This initiative is how we start to bring balance to the communities that have been devastated the most. This is how we make amends and bring generational wealth into our communities."
“We’re proud to stand with Mayor Baraka and other city leaders who understand that an equitable business environment is crucial to maintaining the diverse identity of our urban communities,” Trenton Mayor Reed Gusciora said. “Despite decades of institutional and financial obstacles, many of our Black and Latino residents still put in the hard work to become entrepreneurs. We need programs like the one announced today to help make sure those historical challenges are not an impediment to their long-term success.”
“The NJ FAM Fund will help level the playing field for the Black and Latinx businesses not only in Camden but in urban areas across New Jersey,” Camden Mayor Frank Moran said. “The small business community has traditionally been the foundation of our local economy. As elected officials, it is our objective to identify resources which can not only help support but foster economic growth. Since the onset of the pandemic, so many of our Black and Latinx businesses have been impacted and are now facing dire circumstances. The NJ FAM Fund represents an outstanding collaborative effort to support these struggling businesses while shrinking the racial wealth gap.”
“During these trying times this will assist African American & Latino Business as we restart and recover our Economy,” Atlantic City Mayor Marty Small Sr. said. “The great city of Atlantic City looks forward as a participating municipality to support current business and bring new industries to diversify our economy.”
“Although it is reported that minority-owned businesses represent the fastest growing business sector in the U.S. economy, Black and Latinx business owners continue to face significantly more obstacles starting their businesses and maintaining growth," Irvington Mayor Tony Vauss said. "Our country’s current economic crisis presents a significantly heightened challenge. Therefore, it made sense for us mayors of urban communities to work together to create the NJ FAM Fund in order to help the businesses that are the heart of our communities, Black and Latinx businesses."
“On behalf of the city of Orange Township, I am excited to work with Newark Mayor Ras Baraka alongside other urban cities to help build up Black and Latino businesses," Orange Mayor Dwayne Warren said. "Determining how we invest our budget dollars in small businesses in our communities is one of the many initiatives underway as we move our state forward. This FAM fund serves as a reminder of the work we need to continue to do to create equity in the business sector."
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