by Dorian Kendrick
Penny Foundation utilizes philanthropy to create economic engines
In 2009, while a student in Divinity School, Birmingham-native Lyord Watson Jr. took a class on African-American Spirituality. During that time, he came across the name of Reverend Ruben Pettiford. In 1890, Pettiford led a group of Birmingham residents to start the Penny Savings Bank. Since 2003, Watson had participated in community philanthropy with the Birmingham Change Fund and the Community Investment Network through giving circles. However, he knew that there was more that needed to be done. The following semester, after learning about Rev. Pettiford, Watson took an independent study course to flesh out his model of ministry. It was during this time, the idea of starting an institution focused on the Black community began.
Watson started to research the top 13 zip codes, with 70% or more Black residents, in Jefferson County. He found that the charitable giving for the selected areas produced more than $60,000,000 in charitable gifts in 2011. Afterwards, Watson reviewed the makeup of boards and executives in grant making foundations in the Birmingham-metro area. At the time, there were only three Black people in grant making positions for a county with a 74% Black population. After two attempts and six years, the Penny Foundation became a reality on October 5, 2017. The Foundation is a platform for people who want to make philanthropic investments into the Black community. It is a community of people who believe if we combine our financial, social and intellectual capital, we can create resilient communities. The Penny Foundation is only one
of four community foundations, in the United States, started and run by African-Americans.
For three years the Foundation has worked to create solutions. Today, it has created:
• Donor Advised Funds - donors have the choice to financially support general Penny
Foundation projects, or more specific initiatives they may have in mind. Each donor
receives a tax-deductible designation. Individuals can learn more by visiting
pennyfoundation.org/donor-advised-funds.
• Fiscal Sponsorships - small businesses with limited back office support are able to house
their funds with the Penny Foundation for distribution as needed. Most times individuals
are able to carry out their corporate social responsibility efforts on a larger scale.
Organizations can get started by emailing invest@pennyfoundation.org.
• Programs and Initiatives - Community-owned grocery stores (COGS) is a leading
initiative of the Foundation. The stores are financial engines for each neighborhood,
allowing community residents to purchase common shares. The Future Forward Fund is a relief program that builds resources for small businesses, entrepreneurs, creatives and non-profits. The focus is to continue the growth of Black-owned business ecosystems throughout Birmingham. The Booster Fund program assists students and teachers by providing support for unfunded items. This includes recognition and rewards, field trips, person-to-person urgencies and student special needs. Each effort is led by a committee of subject matter experts. Learn more by visiting pennyfoundation.org.
The Penny Foundation looks to develop institutions that create economic engines. By design, COGS are a mechanism to circulate money within a community multiple times. For example, if there were six stores located in the Birmingham City limits and each store produced $10,000,000 in revenue, combined the stores would produce $60,000,000. This creates six funding engines to
support economic and community development activities.
As shoppers spend money in the COGS, it will pay dividends to shareholders according to profits. To support the community’s interests and improve the quality of life for citizens, reserves will be partially directed to create a fund. In turn, this invites shareholders and shoppers to support businesses and nonprofits the COGS invest in. The stores yield the buying power of its residents and will continuously circulate money back into each community. “The buying and donor power of the Black community, for the most part, goes out into the world leaving a majority of minority zip codes with food deserts and a lack of economic power,” said Penny Foundation CEO Lyord Watson. “Now is the time to change this model to help build up communities destroyed by inequities; COVID-19, job losses, shuttered businesses, mental anxiety, economic plight and a loss of hope.” The Foundation’s mission is to establish a community-owned grocery store that provides a wide range of goods and products from top
brands, at affordable prices. It will redirect dollars spent outside of blighted communities each year by establishing one of the most essential parts to any community, a grocery store. Right now, the Penny Foundation seeks to raise $50,000 for COGS. Funds will go towards startup capital to solidify the initial location, open the store and complete renovations. “We need the small and the large to help us impact the many. It will take a collaborative effort of community, government and the private sector to achieve this initiative,” said Watson. “Steps are currently being taken to accomplish our goal.”
Individuals can support the stores’ development now by texting the word OWNERSHIP to 44-321. To learn more about how to get involved visit pennyfoundation.org/cogs or send a direct email to invest@pennyfoundation.org.
In this climate, money can be pretty tight. So this is a pretty awesome setup to give back.