How to set up a chamber of commerce.

African American chambers offer black entrepreneurs administrative, technical and financial support. Here's how to get one started in your community.

WHEN A. BRUCE CRAWLEY LAUNCHED THE African American Chamber of Commerce of Philadelphia in 1993, he expected--and got--some dissension. Many in the business community and local media questioned the need for a chamber of commerce tailored specifically to black business owners. But for the president of Crawley, Haskins & Rodgers, a black-owned, Philadelphia public relations and advertising firm, the answer was simple. "Up until the establishment of our chamber, no organization focused all of its resources 24 hours a day, seven days a week on the special challenges presented to African American-owned businesses," Crawley says.

Currently, there are about 621,000 black-owned firms in the U.S., with receipts totaling $32.2 billion. However, making successful inroads into the larger economic landscape is still very difficult. It's no secret that many of the nation's black-owned firms have been hard-pressed to find venture capital, bank loans and procurement opportunities. Crawley points out that for the past two years, Philadelphia's public transportation system, the Southeastern Pennsylvania Transportation Authority (SEPTA), has awarded only 18% of its contracts to black contractors.

Black chambers of commerce are stepping in to change these issues for the better. From Buffalo, New York, to El Paso, Texas, and even Anchorage, Alaska, black chambers are positioning themselves as advocates for black business owners.

While belonging to a mainstream, corporate-based chamber does provide smaller businesses an opportunity to network with large companies, there are distinct advantages to belonging to a black chamber. Harvey Johnson, a founding member of the Greater Columbus African American Chamber of Commerce in Ohio, says the special needs of African American businesses can be easily overlooked in larger white chambers. "Many black businesses are small start-ups and need help getting contracts and loans," Johnson says. "But if larger chambers are concentrating on multimillion-dollar companies, we can get lost in the shuffle."

Many black chambers are formed to give entrepreneurs opportunities to network and gather under one umbrella for technical support. In places like Florida and Ohio, business owners are forming black chambers in response to cuts in affirmative action and set-aside programs for minority firms. Others are forming chambers to make a statement about the power of pooling black dollars. "African Americans spend a lot of money in this economy, and we get very little back," says Jim Clingman, founder and executive director of the Greater Cincinnati African American Chamber of Commerce.

"We need to realize the impact we can have on the economy when we pool our dollars. Through a black chamber of commerce, we can combine our money and resources to have more economic clout," adds Clingman, who notes that African Americans own few businesses in the Cincinnati area.

Black chambers also offer a host of benefits that support business owners personally and professionally. The Greater Columbus African American Chamber offers members bonding programs, and pager and cell phone services. In Cincinnati, members of the African American chamber receive discounted long distance service at 9 cents a minute. Members plan and attend workshops on starting and maintaining a business. The chamber also intends to offer a health care plan in conjunction with a black-owned medical provider in the area.

As part of their membership fee, business owners in the Tucson Black Chamber of Commerce can advertise their services in a monthly newsletter distributed throughout the city. Some chambers also publish business directories or offer discounts on travel and insurance programs (see sidebar, "Your Benefits Package").

Aside from the difference in focus, mission and program development, building a black chamber is similar to forming a non-minority chamber. It takes time, money and commitment. There's no 10-step approach, but there are several things you can do to make your chamber successful and viable.

BRING STRENGTH TO THE TABLE

Before you start surveying land for office space and polishing up your power presentation, assess the need for a black chamber in your business community. Does one already exist? If so, is it effectively addressing the needs of the black business community? Are there enough black businesses around to justify the cost? Perhaps the numbers are there, but the interest is lacking.

Once you establish a need, find responsible organizers who are in synch with a particular mission and goals and begin creating your agenda. When Johnson began making plans for a black chamber of commerce in Columbus, he formed an alliance with an existing organization called The Center for Urban and Rural Redevelopment. "This is an organization with a proven track record on a number of state, federal and city issues," says Johnson, who with his wife, Ann, is co-owner of Johnson's Options, a direct sales company. "I knew an alliance with them would give us a good base of professionals to start with and help bring strength to the table." After a year, the chamber now has more than 100 members.

Once organizers are in place, select a small board to start with. Your board members' experiences and occupations should match the needs of the chamber, says Robin L. Douglas, founder and president of the African American Chamber of Commerce of Westchester and Rockland Counties in New York. For example, Douglas, who also owns Unforgettable Moments, an event management firm, plans seminars, conferences and other program activities for the chamber. The board also includes an attorney to handle legal matters and radio executives who take care of publicity and public relations.

Once board members are selected, write a one-page mutually agreed-upon letter of understanding for the organizers. This document will indicate that the founders have agreed to form for a particular purpose. Also, create a mission statement to clearly outline your agenda and goals. Next, develop a set of bylaws preferably with an attorney's help--to document how to handle the chamber's everyday activities as well as disagreements.

GUARD AGAINST INTERNAL STRIFE

Failure to draft an agreed-upon mission statement and bylaws can quickly derail your chamber. Many chambers suffer from infighting among members over direction, finances and other issues. These fights cause delays in incorporation and program development.

The African American Chamber of Commerce of El Paso experienced problems just four months after organizing. The chamber was formed in December 1995, but attempts were made by a faction of members who "paid their dues and then decided that they were more qualified to run the chamber," recalls Jeff Wiresinger, the chamber's founder and executive director. This delayed incorporation until October 1996. "We tried to work together and mend our differences, but we were never able to, so we ended up having to cut our losses and move on," Wiresinger says.

The African American Chamber of Commerce of Philadelphia also experienced some problems when, according to a published report in the Philadelphia Daily News, Dennis Baxter, its former president, resigned in August 1996 following questions about his handling of finances and membership. Fortunately, the chamber was able to minimize the impact of losing its president by already having a tight structure in place. "We had selected a board of directors that was clearly committed and financially invested in keeping the organization together," says Crawley. "Our board met at 7:30 a.m. every Thursday for two months to address issues and make plans for getting a new president."

GET THE COMMUNITY ONBOARD 

Support from businesses and the larger community can help build your chamber. Crawley organized a core group from the community, which included two members of Philadelphia's Department of Commerce, a former television journalist, a contractor and the president of a community development corporation. He used their support to help sell the importance of a black chamber.

It also helps to have the support of consumers. For example, the Tucson Black Chamber of Commerce offers a special membership rate of $50 per year for consumers who want to join the chamber and patronize the businesses who are members. "We send consumers a community newsletter and business directory to let them know about the products and services that businesses in the chamber offer," explains Michael Butler, co-founder and president of the Tucson Black Chamber. "Many of the businesses in our chamber are thriving thanks to this community support."

INCORPORATE PROPERLY

Depending upon the structure, establishing a chamber can take anywhere from three months to a year depending on the state. While the actual organizing and paperwork for incorporation can be completed in 30-45 days, securing office space, fund-raising and implementing programs can take several months.

Setting up a chamber of commerce requires filing your articles of incorporation. This document describes how the organization will operate and lists the names of the founders, the chamber's location, mission statement and nonprofit status. In essence, your articles of incorporation serve as an official blueprint for your chamber that must be viewed, confirmed and signed by your local Office of the Secretary of State. Every state has a pre-printed form on which this information should be recorded. Most chambers initially incorporate as a 501(c)6 group, making it a not-for-profit organization whose mission is to affect legislation through lobbying. However, a chamber's sub-corporation should be filed as a 501(c)3 nonprofit organization, focusing more on economic and community development through its fund-raising efforts. Some black chambers acquire both. Keep in mind that when fund-raising, charitable contributions to a (c)3 organization are tax deductible but donations to a (c)6 are not.

The fees to become incorporated can range from $30 to $500, depending on what state you're in. The filing process can be turned over to an attorney, but founders can file the forms themselves through their Secretary of State. In general, it takes about 15 minutes to file and depending upon the state, anywhere from six weeks to six months to receive your certificate.

Once your chamber is incorporated, file an SS-4 application with the IRS to obtain your Federal Tax Exempt ID number (KIN) and open a bank account to handle membership dues and donations.

JOIN STATE AND NATIONAL ORGANIZATIONS

You needn't reinvent the wheel to operate a chamber. There are national and state organizations that offer guidance and support. Many local chambers are affiliated with the Washington, D.C.-based National Black Chamber of Commerce (NBCC). Formed in 1993, the NBCC is an umbrella for 170 affiliates in 43 states nationwide. The National Association of African American Chambers of Commerce, based in Dallas, counts among its membership 83 chambers in 16 states. Both groups sponsor national conferences with dozens of technical assistance seminars and workshops.

In Florida, black chambers have formed so rapidly--and successfully--there is now a Florida Association of African American Chambers of Commerce. The Association lobbies for political programs that benefit black businesses and periodically monitors how state contracts ate awarded. "As power and money are shifted to the states, more states are partnering with private companies to do government programs," says Association President Valecia Brooks. "A state association of black chambers allows us to bid for state contracts with strength in numbers." Brooks, who also heads the Orlando-based event management and promotions firm Eye-Rise Productions Inc., says members of the state association include nine local chambers of commerce representing 1,500 businesses. Association members give each other a heads-up on contracts as they become available throughout the state. For example, when a $25 million Super Fund cleanup contract from the EPA was up for grabs in Ft. Lauderdale, the chamber quickly alerted Patrick Barnes. However, the EPA had already awarded the project to a white-owned firm, claiming there were no minority-owned environmental companies in the area. But when Barnes' Orlando-based environmental consulting and engineering firm, Barnes, Ferland & Associates, surfaced, the EPA had to re-bid the contract. He successfully obtained a small portion of the overall deal as a technical assistant--a mere $50,000--but is currently bidding to manage the rest.

The association is also dedicated to increasing the number of black chambers of commerce throughout Florida, Valecia says. The group identifies cities and counties where chambers are lacking, then works with local business owners to get one started.

IMPLEMENT VALUE-ADDED PROGRAMS

Workshops, seminars and campaigns are very important to a chamber's success. "These exchanges encourage black entrepreneurs to patronize each other's business," says Butler. "It's an opportunity for a business owner to stand up and spotlight his or her business," he says. The 217 members of the four-year-old Tucson Black Chamber of Commerce gather monthly for networking and a bit of show and tell.

A number of chambers struggling to get off the ground sponsor workshops on how to successfully start and operate a chamber. Dr. Michael Grant, president of G and C Motivational Consultants in Nashville, Tennessee, has visited chamber meetings in Cincinnati and Indianapolis to stress the need for quality service.

"These organizations need to make sure they take care of the basics like having people available to answer phones," says Grant, who conducts customer service seminars for clients such as Marriott and Ritz Carlton hotels. Grant, who is starting a black chamber in Nashville, also does workshops for entrepreneurs within the chamber on gaining and keeping consumer confidence. "I ask these business owners to take a serious look at why we are not always getting our customers the best goods and services. We come to terms with that issue and set long-range personal and organizational goals for improving service," he says.

FINANCING YOUR CHAMBER

The cost of starting a chamber varies depending upon size, location and structure. Harry Alford, president and CEO of the NBCC, suggests raising $100,000 to start a chamber in a mid-sized town. This should cover overhead for a small staff, office space, equipment and traveling expenses.

Initial investments generally come from the founders, but to help defray the cost of equipment and renting office space, many chambers share the facilities and resources of one of their members. Crawley launched his chamber with $60,000 in investments from local black-owned businesses and office space donated by Mellon Bank. In Cincinnati, Clingman successfully petitioned the city council for a $50,000 reimbursement contract, which is given to the chamber as payment for out-of-pocket costs for providing management and technical assistance services to its members.

You can still get a chamber off the ground even if you don't have that kind of capital. When Herman Malone and five concerned businessmen founded the Colorado Black Chamber of Commerce in 1986, they started with less than $500. "We worked out of the basement of one of the members' homes with letterhead and office equipment donated by individual members, says Malone, owner of RMES Communications, a Denver-based telecommunications company. Today, the chamber, which has 400 members, leases space in a television studio owned by one of its members.

Once you're up and running, money from corporate donations and membership dues will help drive the chamber. Therefore, most of your start-up funds should be used to market your services and benefits to prospective members. Not only will you be competing with larger, mainstream chambers, but also with a host of other organizations businesses can choose to join. To solicit members, conduct a membership drive or mail applications and information about your chamber to prospective members. Let them know exactly why they should join you organization and how membership will specifically benefit them.

Set membership fees at what your market will bear. Most black chamber memberships, depending on the size of the business, run $50-$500. Corporate dues can range from $1,000 to $5,000 for affiliate memberships and as much as $25,000 for the NBCC.

SOLICIT CORPORATE PARTNERS

Douglas says many new chambers don't have a budget, so securing corporate sponsors to underwrite programs is crucial. "If you rely solely on membership dues, you wont' get finances together in the time you need to make a presence in the community," she says. "Corporations provide a financial base while you're trying to get meat-and-potatoes programs together." This requires developing working relationships with banks, insurance companies and others who may be willing to lend support.

Another option is to allow corporate executives to serve on chamber boards and committees. Vice presidents from Chase Manhattan and other banks sit on the executive committee of the African American Chamber of Commerce of Westchester and Rockland Counties. Douglas says in order for a corporate executive to gain a seat on the committee, the company must have at least one African American in a top-ranking position. She calls this a "win-win" situation for business owners and the corporations. "The bank ends up with new customers, and chamber members have their loan applications taken through the process with a lot more care and individual attention," she says.

Chase Manhattan Bank has also paid the bill for an "access to capital" workshop for the Westchester chamber's 125 small business members. In addition, the chamber has established ties with IBM, enabling members to buy computers and other office equipment at a discounted price.

Before seeking corporate dollars, draft a proposal outlining the types of programs you want to launch, and if possible, a completed business plan as well as the projected costs and potential benefits to the corporation.

IT'S MORE THAN AM BUSINESS

Overall, black chambers of commerce mean more than dues and discounts. Membership does have its privileges. For starters, chambers can serve as watchdogs over government agencies to ensure economic parity and fair representation of black businesses on the local, state and federal levels. For example, when the San Francisco International Airport recently attempted to undergo a half-billion dollar improvement project sans many area black contractors, the NBCC stepped in to obtain an $18 million contract for four black firms.

In the end, most people will join a chamber because they want to get business. Says Valecia Brooks of Florida's Association, "Networking and professional development are fine, but when members come to our meetings and mixers, they expect to find someone they can do business with," says Brooks. She found many of the vendors for her magazine, What's Next! in Black Entertainment, within Florida's African American chambers. "All of my professional services--printing, promotion, graphic design, accounting and legal matters--have been handled by chamber members," she says. "It's a comfort level to have a chamber of commerce in which you can do business with other African Americans and watch capital grow and build."

RELATED ARTICLE: Your benefits package

Black chambers of commerce can entitle you to a number of perks. Here's what to expect when you join.

Black business directories. Considered the Yellow Pages for black entrepreneurs, these specialized publications list the names of member- and other black-owned businesses in the area, along with key contact and marketing information. For example, the African American Chamber of Commerce of Philadelphia publishes The Greater Philadelphia Black Pages.

Newsletters or magazines. Many chambers produced monthly or quarterly publications describing chamber activities, showcasing member companies and listing bid or other business prospects. The NBCC operates a "broadcast fax" system to inform members of procurement opportunities.

Workshops and seminars. These programs help business owners do everything from writing business plans to developing winning sales strategies. Other workshop topics might include forming partnerships, securing capital or hiring and training employees.

Regional and national conventions. These annual or quarterly meetings provide plenty of opportunity to network with some of the biggest names in business, attend workshops and participate in business expositions and other showcases.

Health benefits plans. Programs underwritten by major health maintenance organization (HMOs) are often available to chamber members at group discount rates of up to 40%. Other discounted services, often based on group rates, may include travel, long distance phone service, office supplies and equipment, entertainment and personal insurance.