Project: MORE IN THE MIDDLE

Sponsor: Associated Black Charities through the Annie E. Casey Foundation
Status: In process
IPS Staff: Marsha R.B. Schachtel

Purpose and Approach
The More in the Middle initiative is designed to retain existing African-American middle-class residents, grow African- American middle-class residents from within the existing pool of Baltimore’s low-income residents, and attract new African-American middle class residents from outside the region into the city by building assets, such as equity in homes, equity in businesses they own, or human capital assets in the form of higher educational attainment. One of the core equity-building strategies being explored by the More in the Middle Leadership Collaborative, which oversees the initiative, is business development, of which a key component is birth and growth of African-American owned small businesses. This project first explored the status of, and barriers to, the birth and growth of African-American businesses in Baltimore, then inventoried resources available to support their birth and growth and identified representatives of these resources. Finally, it is exploring the role that social networks play in African-American business success. Research shows that social networks of adolescents, college students, entrepreneurs, borrowers and lenders, business managers, even of minority corporate board members and on-line communities have profound effects on personal efficacy. Homophily (similarity that breeds connection) in race and ethnicity creates the strongest divides in personal environments, followed by age, religion, education, occupation, and gender, in that order. It limits social interaction, affecting the information
a person receives, the attitudes a person forms, and the interactions a person experiences. Social networks provide the pathways for all types of resources needed to launch and sustain a business to be connected – human capital (both of the entrepreneur and of mentors), financial capital, and opportunities.

Results
Interviews with over 40 African-American owned businesses and the organizations that support their growth provided new insights about the paths entrepreneurs have taken, the obstacles they have encountered, the support that was most meaningful, and the work yet to be done to help these firms and their owners build equity. The results were presented at the More in the Middle colloquium and to the More in the Middle Leadership Collaborative. A comprehensive inventory of resources available to support the birth and growth of African-American businesses was prepared. A roundtable of bankers, financing and management assistance staff, and business representatives was convened to explore the realities of and gaps in African-American business support. The exploration of social networks has produced a summary of relevant research findings, a survey of approaches used elsewhere, current initiatives in Baltimore, and recommended actions.

Publications
Forthcoming.