Boston Ujima Project is putting working class communities of color at the center of decision-making in the Dorchester, Mattapan, and Roxbury neighborhoods. Ujima Project does this by helping to gather community members in public planning assemblies, at both the neighborhood and city-wide levels, where hundreds of residents work collectively to hammer out shared values and plans for their local economy. One of the grassroots decisions community members make is where and how to invest capital in their neighborhoods. That’s where the Ujima Fund comes in. It’s a $5 million community investment fund that pools contributions (as small as five dollars) from neighbors, outside supporters, and foundations, and deploys it in the form of small business loans of $5,000 to $250,000 or as grants. An investment committee of Ujima grassroots partners, business owners, and local finance professionals uses the community-created plans to review investment opportunities, conduct due diligence, and make recommendations to members before all investments come to a member vote. (Each general member of Ujima that is also a Boston resident, selected via an application process and, regardless of whether or not they’ve invested in the fund, gets one vote.) The Ujima Fund is designed to remain accountable to residents by consulting with them through ongoing assemblies.
In addition, an annual business review by a member-elected Community Standards Committee ensures investments meet community-defined and community-ratified Good Business Standards (e.g., businesses that pay employees fair wages).
During a pilot of this process in August 2016, Ujima members voted to invest in loans to five local Black- or immigrant-owned businesses using the Kiva Investment Platform. Among them was a Cape Verdean wholesale market that received a loan to install additional refrigeration; Fresh Food Generation, a food truck that was able to make the move to a brick and mortar location; and Norma Rosario Catering (who has been the first to pay off their loan and will be celebrated soon by Ujima).
The first investment of the Ujima Fund, which has raised $2 million so far, was approved in December 2019. The community voted to provide worker-owned Cero Cooperative, which collects businesses organic waste to create compost, with a $100,000 loan to support the hiring of a sales team and expand their market. A next round of investments is being considered now. Among them is CityFresh, a 100-person firm that makes healthy school lunches. CityFresh and the community are ironing out how the company can ensure fair, predictable scheduling of employees’ shifts. This is one of the community’s standards for investment, but how it should be applied to food businesses in a way that makes sense is being discussed.
The fund invests in:
- Microfinance (e.g., a loan for a small equipment purchase for a new worker owned catering co-op);
- Working capital (e.g., inventory purchase for a new bike shop);
- Growth capital (e.g., loan for a new truck for an energy efficiency company);
- Real estate (e.g. acquisition financing for a local community land trust); and
- Community infrastructure (e.g., seed financing for community-owned internet infrastructure).
“Ujima provides technical assistance services and peer learning to help businesses become loan-ready. The two workstreams in UMA’s Pathways to Patient Capital program— Whole-Entrepreneur Capital Readiness and Financial Product Innovation—will help Ujima provide a longer-term, higher-touch solution to supporting entrepreneurs of color here in Boston,” says Nia Evans, director of Boston Ujima Project. “We believe that many of our businesses are ready for capital, which is why we are willing to provide it, filling in a gap left by traditional lenders. Our technical assistance and other additional supports are more oriented around exhibiting trust and faith—that many businesses owned by people of color don’t often receive—with our actions.”
Ujima is also in the process of launching a Business Alliance made up of community oriented business owners, managers, and entrepreneurs who are committed to advancing social and economic justice through the private sector. Business Alliance Members align their corporate practices with Ujima values by creating good jobs, sharing ownership and wealth, meeting local needs, and generating community benefits. Business Alliance Members are finding strength in unity, and value cooperation over the competition to achieve shared success. This will be familiar to anyone who knows UMA’s effort to create similar “Local Branding” organizations in efforts to sustain mutual support networks for new and established business owners alike. “Participation in UMA’s cohort provides an important opportunity for Ujima to expand our network, learn from peers, and refine our strategies as we expand and scale our programs,” said Evans.
This case study was co-authored by Mark Foggin and Johnny Magdaleno and published in 2020 as part of the Urban Manufacturing Alliance’s “Forging Fairness: How community-based lenders are centering both inclusion and manufacturing to promote equity [link to report].” This report highlights the work of practitioners in UMA’s Pathways to Patient Capital cohort, and approaches these leaders are taking to help entrepreneurs of color–including makers and manufacturers–get access to the capital and know-how they need to realize their business ideas and plans at scale.
