Want better schools, resources and services in your neighborhood? The first step is supporting businesses that are owned by people who look like you. Studies show that the lack of cooperative economics is killing the Black community—and keeping others smiling all the way to the bank. EBONY breaks down how to move past fault and toward change.

Black Economics 101: Everything You Need to Know

Economically, Black people have rarely been in better shape. According to a 2015 Nielsen report, the percentage of African-Americans earning more than $50,000 a year increased from 30 to 36 percent from 2005 to 2013, and those earning more than $75,000 increased from 15 to 20 percent. Based on a 2015 report from the University of Georgia’s Selig Center for Economic Growth, that growth has translated to $1.2 trillion in annual buying power for Blacks (for context, that number rivals the gross domestic product of countries such as Australia and Spain). But the same study shows the average Black dollar lasts only hours within our community, and that lack of reinvestment—i.e., not supporting Black-owned banks and businesses—has bolstered the wealth gap between us and other ethnicities. Staying “community poor” is a choice. We can change our collective financial standing by following the successful models of other racial groups and directing spending into our own pockets via investing in African-American-owned companies, venture capital and private equity firms and high-growth entrepreneurship opportunities. Below, we take a look at the steps to radically change our economic ecosystem.

EBONY spoke with Steven Rogers, the MBA Class of 1957 Senior Lecturer of Business Administration at the Harvard Business School and author of Entrepreneurial Finance: Finance and Business Strategies for the Serious Entrepreneur, about the state of the Black economy.

How do we define the African-American consumer market?

That’s how much money African-Americans are spending on consumer products and other services throughout the country. You have more than 37 million Black people in America spending basically $1 trillion in value annually.

Where is most of the money going?

Unfortunately, [it’s spent] with almost anybody and everybody who doesn’t look like us. It goes into the hands of non-African-Americans who do not necessarily have an interest in employing Black people, buying products or services from our companies, investing their money in Black-owned banks that provide financial services to Black people or making charitable donations to HBCUs.

How did this cycle begin?

There was research by a Dartmouth professor in 1998 that showed the loan rejection rates for Blacks were twice as high as those for Whites with a similar kind of credit. The issues include everything from the lack of access to capital to historically working for free … it’s created a legacy where other groups see us as merely consumers or laborers because we don’t have the financial means to create our own institutions.

What kinds of institutions should Blacks look to create?

We must focus on owning large-scale media companies, financial services firms, private equity firms, hedge funds, investment banks and construction firms. These types of businesses employ millions of people and create wealth. Fair access to ownership has been denied to us because generations of our [ancestors] worked for free for more than 250 years [while other groups created wealth]. This free labor helped build America into the strongest economic country in the world, but none of the money from that labor went into the bank accounts of Black people.

How do we start to jump-start this type of enterprise building?

The key to a healthy, vibrant Black community is entrepreneurship, and then more of those companies must grow. We need more enterprises to move out of the small-business category and into the middle-market business category, which is defined as companies with at least $50 million of annual revenue. Entrepreneurs must target sectors with exponential growth potential to create jobs and wealth for themselves, investors and possibly even employees. Two Black-owned companies that experienced growth and are now middle market-sized companies are Loop Capital, an investment bank owned by Jim Reynolds, and Ariel Investments, owned by John Rogers Jr.

There’s also the concern about successful African-American entrepreneurs selling their brands. What are your thoughts?

I believe entrepreneurs should sell their companies if they believe it’s the right thing to do. I would rather see a Black entrepreneur sell his or her enterprise, make millions of dollars and use it to invest in the community. Sheila Johnson, the co-founder of BET, made millions from selling. She has used the money to start new businesses, invest in other opportunities and make philanthropic donations that benefit the race. The monetization of a Black-owned company is not necessarily bad for the Black community.

How We Get There: Four Ways You Can Reinvest in Black Communities Today

Maggie Anderson, author of Our Black Year: One Family’s Quest to Buy Black in America’s Racially Divided Economy and co-founder of the Empowerment Experiment Foundation, provides tips on how we can keep our greenbacks Black:

1 Move to Make: Actually Invest. Buy a life insurance plan from a Black agent and open a bank account/ investment fund with a Black bank.

  • Why It’s Important:

The power of investing and compound interest is well known. Let’s use this example from the U.S. Securities and Exchange Commission: If you saved $1 a day for a year and put that money in a savings account or investment that earns 5 percent a year, you would have $1,577.50 in 30 years.

  • Positive Result:

Your family will be more financially secure. Plus, all the interest and fees accrued by the bank are reinvested into your community through business and home loans, and the increased access to local sound financial services.

2 Move to Make: Find Black Businesses That You’ll Frequent. From grocery stores to accountants, patronize African-Americans offering services you regularly use.

  • Why It’s Important: Identifying companies that offer practical services will help bolster your commitment to using them, which creates more jobs in African-American communities.
  • Positive Result: According to a study published in Our Black Year, up to 1 million jobs could be created if Black households spent just $1 of every $10 on Black-owned businesses.

3 Move to Make: Stay at a Black-owned Hotel. No excuses. Thanks to the National Association of Black Hotel Owners, Operators and Developers (nabhood.net), you can find Black-owned hotels in more than 30 states and one district nationwide.

  • Why It’s Important: U.S companies spent more than $289 billion on just business travel in 2015, according to the Washington, D.C.-based Global Business Travelers Association; add personal trips, and the figure is even more astounding.
  • Positive Result: As Black-owned hotels thrive, owners and operators create more jobs and additional opportunities for ownership via mentorship.

4 Move to Make: Consider Entrepreneurship. Interested in starting a business? Determine whether you want to own a smaller shop and be a “lifestyle entrepreneur” or a “high-growth entrepreneur” looking to build a middle-market firm.

  • Why It’s Important: Experts contend that mid-market firms bolster larger economies by creating hundreds to thousands of jobs, and small businesses help microeconomies by generating local employment. The Black community needs both.
  • Positive Result: Typically, lifestyle entrepreneurs grow their companies at 2 percent annually, and high-growth entrepreneurs grow at about 10 percent annually.

recycle_caroSupport #buyblack

Dedicated to recycling your Black dollars? These sites will help make financial empowerment a reality in your everyday life. JUST CLICK.

By S. Tia Brown

What: Spendefy.com

Why: This site is the perfect find for folks looking for high-level service. It vets all brands on its directory and integrates customer feedback to promote consumer confidence. See p. 108 for more details.

What: Jetmag.com

Why: The entertainment and news site has a longstanding series, #buyblack, which features the latest companies offering trendy beauty, tech and lifestyle products.

What: ShoppeBlack.com

Why: From locating the best restaurants in a specific city to the top-shelf subscription box services, the platform does all the legwork, no matter what you’re looking for. The site has extensive resources for products and services Stateside and across the Diaspora.

What: Tuloko.com

Why: The site offers an overview of businesses and events taking place in various cities. The brand is branching out to offer reward points for actions including digital purchases.