The last two weeks have revealed yet another challenge for Bishop Eddie Long, the members of New Birth Missionary Baptist Church, the Atlanta community and America as a result of a business partnership gone bad with entrepreneur, Ephren Taylor, and his company Capital City Corporation.
As an Atlanta native and bishop that operates at the intersection of faith and finance, it concerns me to see investments go bad in the church and black community because to create a lasting legacy, people of color still have to be symbiotic. The black church is a necessary partner because it is the only “institution” we have that is even concerned about our journey from slavery to significance.
Members of churches like New Birth, which are primarily attended by Americans from the African Diaspora, have a responsibility to educate our community about how to impart a legacy of wealth and freedom for our future generations. This will take time, but how dare anyone be comfortable with African-Americans congregating to worship, dance and shout in churches that we neither build, finance or own, while those same mortgages are held by investors and institutions in other communities to the tune of $70 billion in principal alone?
We must to continue to learn. We must to continue to save and invest. We must continue to innovate beyond hair salons, multi-level marketing and record labels. We must start companies and invest in these startups. We must encourage and support our young entrepreneurs, even when they fail or make poor management decisions. We must encourage our brilliant money minds with the same magnitude and enthusiasm that we encourage our basketball slam-dunking athletes.
But for the “Ephren Taylor” deal, New Birth gets a C- on a scale of A to F.
Being young and failing is one thing, but Ephren Taylor is not the “black Bernie Madoff.” It’s one thing to invest money in a venture and it doesn’t produce the return that was projected. It is another thing to raise $65 billion over decades, not invest the money, and make payouts with newly invested money for 25 years. If we can give banks, insurance companies, automobile industries and money managers another chance to get it right after losing trillions of dollars in the recent economic recession, then we can givesmall business entrepreneurs like Ephren another chance. God already has.
Going forward, Ephren has to regroup and try again; this time, he has to be more conservative with investors’ monies and strive to produce an acceptable rate of return.
Where were his advisors? To sell or license those sweepstakes machines to the general public while sponsoring wealth tours in churches across America was naïve. The lines are too blurry to perceive this venture as “gambling” or “gaming without a license.”
On this deal, Ephren and City Capital gets an F.
The media also played a vital role because it aired Ephren’s commercials and infomercials. Now, the media reports the failure of their advertiser without providing enough facts to give viewers a balanced perspective. It is now accepted to entertain than to inform. Instead of facts, we get opinions from the reporter’s bias. When the investigative reporter doesn’t understand business or church, a standard business fee becomes a “cut” rather than a reasonable fee. Just as churches have a responsibility to deliver vetted information and opportunities for a winning future, so does the media.
Media gets a D on this deal.
We must learn that all investments come with the risk of losing your entire investment. The objective is to manage that risk and mitigate loss. Moving forward, I strongly advise that we invest only amounts of money in companies, funds and portfolios that we are willing to lose. Save the rest.
My heart goes out to the investors for the loss of time their IRAs represent. As for the customers’ willingness to “gamble” on those sweepstakes machines and then demand their money back, it leads me to believe not only did they need more information and time before investing, but a character check as well. Did they ask for their money back from the large financial institutions when their IRAs lost money prior to moving them?
For this reason, the investors and customers get an I for incomplete.
Ultimately, it’s a matter of personal responsibility – for all parties involved – including you and I.
Posted By: DAVID JOHNSON
Wednesday, February 16th 2011 at 7:17AM
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