Thursday, December 17, 2015

“An Unlikely Source of Capital for Minority Business Investment” by Dr. Fred McKinney

The following is excerpted from the most recent Tuck MBE Programs e-Newsletter. I thought it was worth an extra boost. This is the kind of critical thinking we need in order to advance opportunities for minority and women business enterprises. Thank you Dr Fred. What do you think?

"I recently gave a talk at the Chicago Minority Supplier Development Council Annual meeting. The focus of the talk was about capital markets and MBE investment. The primary message was that in order to effectively address the issue of MBE access to capital, MBEs needed a better understanding of how capital markets work. But in addition to focusing on what MBEs and corporate members need to do, I also introduced an idea that I think has considerable merit on what the federal government can do to encourage capital formation in minority communities.

Two non-profit groups, Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund in a recent report estimated that the 500 largest U.S. corporations have a combined $2.1 trillion in offshore retained earnings. The money, according to the authors, is sitting offshore to avoid paying taxes; an estimated $620 billion in taxes.

I think there is a way to encourage U.S. firms to bring these resources home and for the Federal government to get its share while at the same time supporting the development of MBEs. Congress recently passed the $305 billion highway construction bill that included a number of changes in corporate tax law. (In the perverse way that Congress works, this transportation infrastructure bill included things completely unrelated to transportation like the reauthorization of the Export-Import Bank and agricultural price supports.) Congress is not unaccustomed to being creative on corporate taxes. But what is needed are legislative champions. Here is something for Congress to consider:

Congress should allow U.S. corporations to repatriate up to 20 percent of their foreign retained earnings tax free, IF they invest those funds in minority and women owned businesses. This could generate approximately $400 billion in new funds for minority and women entrepreneurs. This new capital could stimulate diverse entrepreneurs to acquire companies, invest in new technologies and hire minority workers, radically transforming depressed minority communities across the country.

The federal government wins by encouraging the balance of those funds to return to the U.S. at a reduced effective rate and encouraging employment in communities with high unemployment rates.

Taxpayers win by having some of these tax revenues come home compared to the current situation of having none of the tax revenues associated with those offshore retained earnings in federal coffers. Large U.S. Corporations win because these new funds would stimulate demand for corporate assets from minority and women entrepreneurs who now would have the capital to execute deals. There are billions of dollars worth of corporate subsidiaries that would and could be sold to minority and women entrepreneurs if capital were available. Corporations also benefit as (minority) owners in MBE and WBE enterprises that could be more profitable under MBE/WBE control compared to their current status as non-minority firms. Joint ventures between corporations and minority entrepreneurs should be designed such that the JVs remain MBE/WBE majority owned and controlled and certifiable. MBEs and WBEs win by having real opportunities to acquire, develop and manage more significant businesses, with in some cases, corporate partners. Minority communities win by reducing unemployment, encouraging more investment and increasing minority wealth. And to complete the virtuous circle, the federal government wins as minority communities grow and become less reliant on federal aid and contribute more in taxes.

In Congress when it comes to legislation, they like to say, “The devil is in the details.” While true, what I am proposing might fail because it makes too much sense, the details might be new, innovative and even messy, but the benefits are crystal clear.

In your service,

Dr. Fred Minority Executive Education Progams at Tuck School of Business

Friday, June 19, 2015

“WBEs Who Rock” Contest Winners to be announced at MBE magazine’s “The White Party” 30th Anniversary Wrap Reception

MBE magazine to celebrate Wrap Reception of 30th Anniversary and winner of contest.

MBE magazine’s 30th anniversary celebration started on June 23 last year in Philadelphia, PA, and “wraps” up on the same date this year in Austin, TX. “It’s hard to believe a year has already passed,” said Barbara Oliver, president of Enterprise Publishing Inc. and publisher of MBE magazine. “But it’s exciting to think we’re starting a new journey to the next 30 years.”
The Wrap Reception happens at the annual WBENC (Women’s Business Enterprise National Council) National Conference and Business Fair, immediately after the Welcome Reception and at the Hilton Austin.    
The theme of the celebration is “The White Party,” and guests are requested to wear white cocktail attire. Highlight of the event will be the announcement of 14 winners of the WBEs Who Rock Contest, the second annual event conducted by MBE magazine. “Four of our winners have already been announced and are on the cover of our current May/June issue,” said Ms. Oliver. “However, you must attend our Wrap Reception in order to find out the remaining 10 winners. They won’t even know if they’ve won until they get there. Many submissions and nominations have been received and it was most difficult to single out the winners.”
The contest was open to all current WBEs who were also allowed to self-nominate this year. Due to the success of the contest, it is likely to continue in coming years.
Among the sponsors of this year’s event are Macy’s, who sponsored the May/June cover shoot, Kaiser Permanente, Artech Information Systems, Rose International, Southeastern Grocers, MGM Resorts International, Allstate, Johnson & Johnson, Shell, Red Kite Business Advisors, and Mosaic Global Transportation, who is the official ground transportation provider.
About MBE:
Minority Business Entrepreneur (MBE) magazine is published bi-monthly by Enterprise Publishing Inc. and serves as a nationwide forum for minority and women business owners, corporations and government agencies concerned with minority and women business enterprise development. Founded in 1984 by Ginger Conrad, MBE magazine maintains a strong commitment to economic parity as a lasting solution to the ills of poverty and discrimination.

Thursday, June 4, 2015

Powering Innovation and Growth: Top Utilities Meet in Albuquerque


The Edison Electric Institute (EEI) 32nd Annual Supplier Diversity Conference is going on this week (June 2-5, 2015) at the Albuquerque Marriott Pyramid Hotel in Albuquerque, NM. Hosted by PNM Resources, an energy holding company based in New Mexico, this conference attracted over 300 registrants including 34 public utilities companies from around the country, and 16 of their prime suppliers.

EEI is the association that represents U.S. investor-owned electric companies. Their members operate in all 50 states and the District of Columbia, accounting for $90 billion in annual capital expenditures. Supplier diversity spend by the utilities in this sector represent several billion dollars. This proactive business practice provides companies owned by ethnic minorities, women, and/or service disabled veterans with equal access to purchasing opportunities.

With the changing U.S. demographics companies are increasingly adopting robust supplier diversity programs and pioneering public utilities like Pacific Gas and Electric (PG&E) are leading this charge. In 2013, the California based company spent approximately $1.5 billion with minority-owned business enterprises, the highest for the company to date. To accomplish this milestone in supplier diversity excellence, PG&E worked with 356 unique minority suppliers.

EEI’s annual Supplier Diversity Conference offers their members a matchless opportunity to identify potential new diverse vendors in a pre-competitive setting while also helping diverse vendors to better understand the opportunities and challenges of working with the utilities sector. Conference speakers include industry veterans like EEI’s chief economist, Dr. John Caldwell exploring how the state of the U.S. and world economies influence the energy industry; Steve Dukes, Sr. Supplier Diversity Coordinator, CenterPoint Energy, discussing the intricate nuances of the utility vendor relationship; and Carter Cherry, Director of Supply Chain and General Services, PNM Resources, sharing insights regarding vendor compliance, operating procedures, and other supply chain strategies needed to succeed.



To learn more, stay tuned to MBE magazine’s videoprofiles highlighting conference attendees.


Nadine S. Bartholomew is the principal consultant of N. S. Bartholomew Consulting, a strategic communications firm specializing in utilities diversity.

Monday, May 18, 2015

Finding Federal Resources for Small Businesses

If you’ve ever wanted to research federal resources available to minority business owners and weren’t sure where to start or focus, you’re not alone. Navigating the volume of web pages and PDFs can be daunting if you’re not sure which programs apply to your business.

BusinessUSA.gov was created in partnership with 28 federal agencies to solve that specific challenge. Launched in 2012, the online portal serves as a single access point to valuable business services and information spread across different federal, state and local government agencies. BusinessUSA helps business owners of all types and sizes do everything from accessing capital and developing a marketing plan to finding mentors and understanding small business tax credits included in the Affordable Care Act (ACA).

BusinessUSA also delivers targeted content for minority business owners on a range of topics unique to their circumstances, including federal contracting opportunities specifically available to them.

For one, BusinessUSA includes information on the Minority Business Development Agency’s (MBDA) Minority Business Centers, where business advisors help entrepreneurs grow and become more competitive. Located in areas with high concentrations of minority businesses and staffed by minority business specialists, these centers can help with:
  • Exporting: Minority businesses make great candidates for global trade given their cultural diversity and language skills
  • Contracting opportunities: The MBDA’s Phoenix-Opportunity Matching System is a free online bid-matching service for minority-owned businesses
  • Access to capital: The MBDA can help minority businesses with grants and loans required to finance growth
BusinessUSA directly offers a wide portfolio of additional tools to help small and minority business owners with:
  • Starting a business: BusinessUSA's Start a Business tool helps entrepreneurs with everything from conducting market research to determining which business permits are required
  • Growing a business: BusinessUSA’s collection of resources for established companies addresses a range of complex issues including forecasting for growth
  • Learning and networking: BusinessUSA’s online directory of events and webinars to develop professionally and meet like-minded business owners who may be facing the same challenges and opportunities
These are a few of the ways BusinessUSA can assist small and minority-owned businesses. Be sure to visit BusinessUSA.gov for the full set of tools and resources, including those for women business owners, and to sign up for our email newsletters to stay up on the latest news and content.