How Boston Ujima Project Is Building Community Wealth and Challenging Funding Norms

Caption 1: Nia Evans, director of the Boston Ujima Project, talks with Ujima members and supporters about how to become investors in the Ujima Fund on the evening of the fund's official launch. The gathering took place at the headquarters of the housing justice organization City Life/ Vida Urbana in Boston. Photo by Sarah Jacqz.

In 2019, we profiled the Boston Ujima Project, which uses a unique combination of investments and philanthropy in its efforts to build a community-oriented economy that serves the needs of people of color.

At the time, the project, which formally launched in 2017, had raised $500,000 toward its $5 million fundraising goal for the Ujima Fund, a democratically governed investment fund that supports businesses historically shut out of the banking system. The fund had yet to award its first round of support, and the big question was whether leaders could generate enough investor and donor interest to push the project forward.

They did. The project, a fiscally sponsored group of the Center for Economic Democracy, was poised to hit its goal before the pandemic forced leaders to pivot to emergency response. They still raised approximately $2.1 million in 2020. “Right now, we’re at $3.7 million with about 313 investors to date,” said James Vamboi, the project’s chief of staff, community and culture. “We hope to reach that goal by the end of the year.”

The project offers other forms of support, including technical assistance for certified companies, an Arts & Cultural Organizing Fellowship, and cash payments. “The issues that we’re dealing with are so multifaceted that we need a multifaceted solution,” said Communications Director Cierra Peters.

Looking back on the two years that followed our previous article, Boston Ujima’s holistic, community-driven approach looks prescient. The pandemic has underscored that individuals “excluded from existing conventional systems of support” lack access to instruments that can build wealth, as Angie Kim, CEO of the Center for Cultural Innovation, put it in a January interview. The Center for Cultural Innovation is a backer of the Ujima Project, and Kim has pointed to the project as a good example of current efforts underway to rethink traditional models of funding.

Beyond the pandemic, the murder of George Floyd and the protest movement that followed generated “a lot of energy to think about Black liberation, to think about supporting new systems and new ways of existing in community,” Vamboi said. Donors have responded because “Ujima has been elevated as a model of practice.”

Vamboi told me this work requires a different kind of philanthropic arrangement than what many funders are accustomed to. “I think that traditional 501(c)(3) nonprofit organizations typically engage with institutional partners in ways that often accommodate the foundations’ numbers and visions,” he said. In contrast, the project’s team “has been really deliberate about prioritizing our community needs over the foundations’ needs and timelines.”

Building an infrastructure

The Boston Ujima Project began to take shape in 2015 to address the city’s shocking racial wealth gap and Black entrepreneurs’ lack of access to capital that could help them build that wealth.

One 2015 report found that the median net worth for Black households in Boston was just $8, compared to $247,500 for white households (no, that is not a typo). In addition, Black-run companies in three of the city’s low-income communities typically receive 20–45% fewer dollars than borrowers in majority white communities. This data aligns with last year’s U.S. Federal Reserve report that found that more than half of companies with Black owners were turned down for loans, double the rate of white business owners.

Through the Ujima Fund, the project has created a community-driven infrastructure to allow individuals, investors and foundations to finance local businesses. The project offers four types of investments. In a conventional investment vehicle, an investor generates higher returns if they put in more money. The Ujima Fund flips this model. The returns go down as the notes increase in size.

“The idea behind that is to be redistributive in principle and also demonstrate reparations in a way,” Vamboi said. “We’re disrupting the notion that it’s only wealthier people that are able to have opportunities to build wealth.”

Of course, all investments carry some degree of risk. Cognizant of this fact, Ujima created a reserve fund to cover potential investment losses. Donors and foundations can contribute to this fund by making an Imani Gift of $5 or more.

Of the fund’s $5 million goal, it will allocate $4.5 million in multi-tiered investment capital and $500,000 in grant capital. The project’s other big funders include the Oak Foundation, the Hyams Foundation and the Financial Cooperative.

Recent developments

The other signature feature of Ujima is that an inclusive governing body of members votes on which businesses and resources they want to see in their communities, as well as which businesses the fund will invest in. Members comprise working-class Boston residents, small business owners, activists and investors. Boston residents who do not identify as working class and a person of color can join as a “solidarity member.”

Businesses being considered for investment are held to a community standards process, which includes requirements like allowing employees to complete a yearly worker satisfaction survey, employing at least 60% people of color and demonstrating a commitment to a green energy plan or a zero-waste plan.

On December 19, 2019, Ujima’s voting members completed their first Ujima Fund vote and invested $100,000 in CERO Co-op, a commercial composting company based in Dorchester. On April 1, 2020, the fund made a $100,000 investment in the Cooperative Fund of New England, a loan fund that finances cooperatives, community-oriented nonprofits and worker-owned businesses.

When the pandemic hit, the project launched its Ujima Boston Worker and Residents Care Fund, a one-time payment capped at $575 made available to Ujima Voting Members (who are residents of Boston proper), workers of Ujima’s founding and current business alliance, and workers of Ujima’s Businesses We Love. The fund will remain a part of the project’s portfolio moving forward as an “opportunity for foundations, institutions and individuals to directly give cash to people in our community,” Vamboi said.

As 2020 drew to a close, the project had welcomed 127 new members, bringing its total membership to 729. In addition, it generated a 145% increase in operational revenue, a 168% increase in new donors, and a 68% increase in investments over the previous year.

Redefining the role of funders

Boston Ujima Fund exemplifies organizations working for social change that are pushing past the limits of the traditional funder-grantee setup. Throughout 2020, I spoke with foundation representatives about how the year’s events surfaced new and promising partnership opportunities.

F. Javier Torres-Campos, program director of the Surdna Foundation’s Thriving Cultures program, told me that “reimagining all support systems for the social sector is a ripe opportunity for the field to collaborate on.” Surdna previously provided support for AmbitioUS, the Center for Cultural Innovation program that counts the Boston Ujima Project among its grantees.

Torres-Campos also reminded me that the foundation-grantee conversation is a two-way street. While COVID-19 pushed more funders “to embrace trust-based philanthropy practices like giving multi-year unrestricted grants, streamlining paperwork, and giving support beyond the check,” organizations need to hold their feet to the fire. “Challenge your funders to uphold the pledges they’ve made in perpetuity,” he said.

Vamboi picked up this idea in our chat, telling me that the previous 12 months emboldened the project’s leadership to tell funders “what we needed, what works, and what doesn’t work.” Leaders would occasionally push back on what they considered to be arbitrary timelines and asked for space to negotiate.

“I think it’s really important for foundations to know that they shouldn’t be making decisions about the communities that they fund,” Vamboi said. Funders should instead determine how they can “better be in partnership with the folks that are stewarding those communities.”

“A truly mutual space”

This may sound like the basic principles of good funding, but things can get pretty tricky when the rubber meets the road. In January, I asked the CCI’s Angie Kim which of her grantees were effectively driving community financial self-determination. She cited the Boston Ujima Fund and the East Bay Permanent Real Estate Cooperative (EB PREC), an Oakland-based 501(c)(12) cooperative putting property in the hands of community members.

Soon after, I spoke with Noni Session, the cooperative’s executive director, about how she navigates interactions with funders. She told me that she and leaders at organizations seeking to advance self-determination need to be cognizant of “mission drift.” Donors are “entering into this field expecting organizations to support their vision for the world,” she said. “That is not what dismantled communities need, especially if the donor isn’t from the dismantled community.”

Session told me that funders should be “philanthropic partners,” rather than “a hierarchical kind of gatekeeper for capital.”

Boston Ujima Project’s Cierra Peters echoed this theme. “I think that there is a lot of work to be done in order to make this a truly mutual space,” she said, “wherein we’re not creating hierarchies where people say, ‘I know more than you,’ or ‘you know more than me.’”

What’s next

In late February, the project launched “We Be Knowin’: A Boston Ujima Project Celebration,” a week-long lineup of curated virtual events that revolve around music, arts and culture, along with planning sessions. Around the same time, it convened its 2021 Citywide Assembly, where voting members conducted due diligence around businesses being considered for future investments. Vamboi told me the project plans to make seven investments in local businesses in 2021.

Looking a bit further out, leaders anticipate the project will invest an estimated $2.8 million in small businesses and real estate over the next three years. Specifically, the project plans to offer four types of small business loan products: microfinance loans (up to $5,000 each), start-up loans (up to $25,000 each), small business loans (up to $40,000 each), and growth loans (up to $100,000 each).

The project is also reserving up to $250,000 for potential real estate acquisitions, such as for a community land trust. In total, leaders expect to be lending to 22 small businesses and entrepreneurs by year’s end in 2023. Ujima also plans to boost fundraising efforts to continue raising capital for loan deployment.

All the while, the project will continue to emphasize “the idea that Black people, communities of color, people outside of our immediate community, can invest in this innovation and in this work,” Vamboi said.  “This is their investment, and their solidarity will allow us to sustain and build other types of systems to support our practice.”