Keeping the faith

Entrepreneur, Oct, 1998 by Cynthia E. Griffin

Faith-based economic development is not a new trend. Churches have worked in U.S. communities since colonial days. "What is new in modern-day America is the focus on minority institutions using their strengths and assets to develop inner-city neighborhoods," explains Rev. Dr. Fred Lucas, president and CEO of New York City's Faith Center for Community Development Inc., which provides technical assistance to faith-based community development groups.

Entrepreneurship has become a major tool that faith-based community developers wield to revitalize urban areas. Lucas says the move into entrepreneurial ventures was a natural evolution of the churches' mission to help the poor. "It's not enough to have housing programs; people need jobs and access to quality goods and services," says Lucas. Religious organizations also needed money to maintain their core activities in the face of a shrinking government and corporate belt-tightening. "It became an issue of how to generate operating money and help community businesses develop," he says.

Two organizations, in New Jersey and California, exemplify this trend. New Community Corp. in Newark was started in 1967 by William J. Linder, a Catholic priest, after civil unrest decimated the community. The 1,600-employee nonprofit organization has no affiliation with the Catholic church, but Monsignor Linder sits on the board of directors, and clergy from 15 religious orders work in capacities ranging from CFO to school director.

One of New Community's first endeavors was establishing a supermarket in a shopping center it had built. It took a while to find a partner who would be willing to move into the community and share equity, but the organization persevered. In 1990, Carteret, New Jersey-based grocery store chain Pathmark came on board. Today, the grocery store's annual sales are $35 million, and two-thirds of the proceeds are plowed back into the community. New Community now also owns franchises of Dunkin' Donuts, Pizza Hut, Nathan's Hot Dogs, Taco Bell, Mail Boxes Etc. and Magic Fountain Ice Cream.

FAME Assistance Corp., a nonprofit organization founded by the First African Methodist Episcopal Church, also sprang from the ashes of civil riots - this time in Los Angeles. The program began in 1993 with a $1 million contribution from The Walt Disney Co. to provide microloan funding and entrepreneurial training.

That initial investment has mushroomed. "We have a business resource center containing the FAME Renaissance Venture Fund, which invests in fledgling businesses," says FAME executive director Mark Whitlock. In addition, FAME runs a job placement agency and will open a 48,000-square-foot incubator in 2000 to nurture small minority companies.

Entrepreneurship is certainly not new to FAME, which has been part of the Los Angeles community since 1872. In fact, Biddy Mason, one of the church's founders, once owned large parts of downtown Los Angeles and was known throughout the community for helping those who were less fortunate. Through efforts like these, faith-based organizations are using entrepreneurship to help people help themselves.