Prosperity in America, One Community at a Time

By Dr. Alan Letton & Dr. Clint Arnold

Years ago, I was reading “Decolonizing Wealth, Indigenous Wisdom to Heal Divides and Restore Balance” by Edgar Villanueva.  Villanueva explains how the concepts of economic control have incorporated themselves into the everyday practice of philanthropic funding in our institutional systems.  This isn’t the only concept presented in Edgar’s text, so I don’t mean to negate the value of his work and insight, but I found this one specific element striking. That is, the granting (and by analogy lending) of money for community development is biased by “other’s” assessment of what is needed by that community.  Let me put this another way.  Granting agencies fund what they “think” your problem is, and they evaluate your request based on how they see success from their perspective!!

This realization had a profound impact on my thinking. To effectively develop our communities, we need to define our problems in a way that articulates our vision of the challenge and use metrics specific to our ambitions to measure their success. Let me explain. 

Several years ago, my co-author to this article, Dr. Clint Arnold, entered the DBA program at Marshall University.  His interest was research that explored the resource gap between white and non-white owned businesses.  This wasn’t a finger pointing exercise but a true scholarly endeavor to understand critical elements missing from the Black business experience that would improve our success and contribute to the overall economy.  A rising tide floats all boats!  How many times have we heard this. In terms of economic impact, looking at West Virgina for example, a $1 increase in one’s income contributes another $2 to 3 dollars to economic activities.  Increasing the annual income of a subset of a population, African Americans, for example, brings a significant increase to the economic stability of a city or State.  So wouldn’t it make sense to invest in the development of Black-owned businesses to do just that?

Dr. Arnold’s research began to identify, consistent with Villanueva’s reasoning, that in order to understand success, he had to tackle the question, “How do Black-Owned companies define success?”  With this perspective in mind, you can determine how that differs from non-Black businesses and what resources and systems need to be in place to help our businesses succeed.  Let’s take a simple example. Most businesses are evaluated on growth potential; return on investment, annual growth and market share acquisition, and other factors suggest that the company only has value if it can grow to global dominance in its market.  However, a significant portion of Black-owned businesses aren’t looking for growth but define success as an ability to provide a comfortable income that will send their children to college, pay for a couple of vacations a year, allow them to purchase a new vehicle every few years and live in a community that is comfortable and safe.  So, a business that yields $300,000 per year is a “successful” company against these measures.  This is the cultural-based evaluation Villanueva is referencing. Minority communities frequently define success through community uplift, generational wealth, and job creation—not just profit. These values are often overlooked by resource gatekeepers and policymakers.

Dr. Arnold’s research was very revealing. First, let’s identify historic perspectives. 

• Disparity in Capital Access: Studies by Fairlie (2020), Mijid & Bernasek (2013), and the Federal Reserve (2020) highlight persistent loan denial, even when creditworthiness is equal.
• Educational Barriers: MOBs are disproportionately represented in low-barrier industries—like catering, landscaping, and retail—often due to educational inequities and constrained access to high-level entrepreneurial training.

In addition to the success difference previously discussed, these two elements continue to challenge the financial success of minority-owned companies. We still face a challenge in gaining equal access to capital and in today’s political environment we can only anticipate this challenge worsening.  The education barriers are critical and something our community can address directly.  The New York Times recently reported that Howard University’s undergraduate student population is a little over 80% female!  Looking at college attendance in general, for African American students there are far more women than men attending college.  So we have a unique challenge.  To overcome the educational barriers, we must develop programs that bring more of our young men into the education pipeline, and we have to council high school students more effectively to show them the wide-range of career possibilities that will broaden their experience moving them into higher earning businesses for them to own.  We are seeing this in the technology community now.

A few key findings from Dr. Arnold’s work, 

• Financial Planning is Foundational: Minority owned businesses with structured financial strategies, budgets, and forecasting practices were significantly more likely to report profitability and business longevity.
• Education Multiplies Impact: Owners with college degrees or targeted business education (even short-term certificate programs) demonstrated better marketing, staffing, and growth outcomes.
• Success is Defined Differently: MOBs often prioritize family stability, reinvestment in the community, and generational wealth over traditional growth metrics. Understanding these priorities is key to supporting their success.

Intuitively, we know that a strong knowledge of finance is critical to the success of any business. I remember one piece of advice I was given when running my first enterprise, “not understanding cash flow will destroy your business!”  At the time I had no understanding of the criticality of that statement.  I could have sold a million dollars of goods, but if my customers had 90 days to pay me, and my operation was costing me 2 million to operate in those 90 days, I’m now broke!!  My million-dollar business just crashed!!  It is imperative that we structure functional finance programs that train businesses to operate, not to become accountants! Having the right reports and learning to create them will help in the financing of your business as well. 

There is no short cut for education as the analysis demonstrates.  But note what is said, it’s not a full-blown degree necessarily, but certificate programs that train you on specific items relevant to your operation (cash flow, supply chain, etc.).  This is an area where HBCU’s can have a strong impact. Pull together a certification program that provides a knowledge touching key areas of a successful operation. 

So what do we do? The findings are clear: minority-owned businesses do not fail because of a lack of desire, talent, or innovation. They fail because the playing field remains uneven. As the U.S. economy becomes more diverse, ensuring the equitable success of minority businesses is not just a moral imperative—it is an economic necessity. If parity in business success were achieved, the U.S. economy could gain over $1.5 trillion in GDP according to estimates cited in Dr. Arnold’s research. A path to a more dynamic economy, in all American communities is straight forward. Take those communities that are on the fringe, understand how they define success, provide the critical tools necessary to up-lift their businesses now, and invest in the educational resources to create businesses in the future, and watch our economies grow!

As we look forward, let us remember: equity is not charity—it is smart business.

Dr. Clinton B. Arnold is the CEO of KISRA, Inc. and an Assistant Professor of Business at West Virginia State University. He recently completed his Doctorate in Business Administration

Dr. Alan Letton is the Director of the Center for Community & Economic Development in Black Appalachia and Isolated Communities, a Visiting Scholar at Marshall University, a Visiting Professor in the College of Business, the CEO & Owner of Dr. Alan Letton Consulting, and a Partner in Rendaptive LLC a technology development platform.