The new agenda of the black church: economic development for black America; black churches are flexing their economic muscles to provide much needed jobs and businesses - from shopping centers to senior citizen housing.

Hartford Memorial Baptist Church leaders laid out a plan in 1985 to reclaim their northwest Detroit community. It involved no small endeavor. All the telltale signs of a neighborhood beyond hope were there: doors of once prosperous businesses were shuttered; abandoned buildings sat crumbling for blocks; rats and vermin had overtaken vacant lots and the streets had become a public dumping ground.

Even longtime residents thought only a miracle could restore their neighborhood and provide much needed jobs for its people. Well, if a sound business plan and the means to carry it out qualifies as a miracle, they were right.

Today, that once vacant land is leased to African-American entrepreneurs operating McDonald's and KFC franchises. Several social service agencies and a school also use the land. In August, the church broke ground on a reported $17-million, 80,000-sq.-ft. shopping center that will include a supermarket, drug store and restaurant.

Hartford Memorial also has plans to construct a 40,000-sq-ft. auto-care and commercial center and a multimillion-dollar housing project. Initially, church members paid $500,000 for the vacant properties now under development. Today, the land is believed to be worth more than $5 million.

"Hartford Memorial Baptist Church has established a grand model for other churches to follow," declares Arthur L. Johnson, vice president for university relations at Detroit's Wayne State University. "This is a city where economic resources have been sharply curtailed and white flight has occurred on a massive scale. White business interests have withdrawn and in large measure they have failed to be active partners in the rebuilding of Detroit. Hartford is now a partner."

Rev. Charles Adams, Hartford Memorial's pastor, sees the church's mission and impact from a personal and practical vantage point. "The church needs to concentrate on the business of creating economic institutions," declares Adams. "The issue is jobs. People being laid off through all this corporate downsizing is affecting every black community in this country. The church finds itself in a situation where it is the best continuing, organized entity in the black community for the acquisition and redevelopment of land, the building of business enterprises and the employment of people."

Adams' view of the church as a vehicle for economic empowerment in African-American communities is not novel. Dating back to slavery, the black church has been an epicenter for spurring social, political and economic self-help among its congregants and extending out into the community. Then as now, bad times breed activism. But driving this new movement is a population of pastors and parishioners who are better educated, more sophisticated, and have far more political and eocnomic clout than their predecessors. This generation of church leaders fully recognizes the power of ownership and entrepreneurship. And they realize that, given their collective money and expertise, they are in a unique position to jump-start their communities. "Given our tremendous economic resources, it is possible for the church to create projects that will revitalize our communities, empower our people and revive their spirits," says Rev. W. Franklyn Richardson, General Secretary of the National Baptist Convention, USA. Furthermore, says Richardson, who is also pastor of Grace Baptist Church in Mt. Vernon, N.Y., "Our churches have millions of dollars invested in banks. We must ensure that banks reinvest in our communities."

Nonbelievers need only check the black churches' collective spreadsheet. A 1981 study by Martin Larson and Stanley Lowell estimated that African-Americans contributed about $1.7 billion to their churches annually. C. Eric Lincoln, author of The Black Church in the African-American Experience and professor of religion and culture at Duke Univesity, places that amount today at roughly $2 billion. Emmett D. Carson, author of A Hand Up: Black Philanthropy and Self Help in America, notes that "90% of all black giving is channeled through the church," making it the one enduring institution in low-income black communities with the ability to secure major credit.

Nor is there any question about the commitment of these churches. "The black church recognizes it has to be in the forefront of economic development," says Lincoln. "It has become evident that black people are simply going to have to stand on their own feet and the black church, with all of its economic power, can help facilitate that by creating businesses."

The churches profiled below are among a growing number doing exactly that. They are multidenominational, stand in distinctive parts of the country, and haven't all been blessed with massive congregations and overflowing coffers. What they do share is a belief that the salvation of their communities depends on basic business and economic development. Behind them are pastors and church leaders who view the church's role as not just social or spiritual, but entrepreneurial as well, and can rely on congregants who are willing to pool their resources to create a strong business arm for the church.

REBUILDING BLIGHTED AREAS IN NEW YORK 

In 1978, Allen African Methodist Episcopal Church, inspired by its ambitious pastor, Rev. Floyd H. Flake, took the first giant step in what would become a major community redevelopment campaign. Using a $10.7 million HUD grant, it built a 300-unit senior citizens housing project. Over the next 15 years, Allen Church established numerous service institutions, including a school and a multiservice center housing a prenatal and postnatal clinic. But it also became a builder of businesses, buying and rehabilitating more than 15 boarded-up storefronts in its Queens, N.Y., community. Today, these storefronts house a travel agency, medical and legal professional offices, a barber shop, a restaurant, a home-care agency and a preschool.

The initial financing of these projects began with money from the collection plate. But as its holdings grew, Allen Church was able to secure several hefty loans to keep up the momentum for these projects. Today, Allen Church continues to set aside one-third of the $3 million it collects annually from its 6,500 members for development projects. The church is currently negotiating to buy a Burger King and a Ben & Jerry's ice cream franchise. Also in the works is a $9-million new home for the church itself. "If our churches ever learn the power that they have, we can turn the urban communities of America around and have control of them," says Flake, who is also a U.S. congressman.

Nearby, in the Bedford-Stuyvesant section of Brooklyn, Bridge Street African Methodist Episcopal Church is also transforming one of the most blighted areas of the city. The church owns and operates the Bridge Street Preparatory School, a credit union, apartment buildings and a soon-to-be-built 86-unit, $7.2-million senior citizens housing complex.

Bridge Street has also joined forces with 10 other local churches to revitalize the 40-block area surrounding the church. The massive project is spearheaded by the Consortium for Community Development, a nonprofit corporation. With financial assistance from several city, state and federal housing agencies, hundreds of vacant apartments and storefronts have been purchased and are currently being renovated. Several multimillion-dollar grants are enabling Bridge Street to renovate 40 housing units and erect 22 duplexes with the Enterprise Foundation and the New York Housing Partnership. Of the more than $1.3 million in tithes and offerings the church collected last year, over $600,000 was spent on renovation and construction projects. Among them is the ongoing renovation of a former drug den, which will eventually house Bridge Street's Head Start program.

"The black church is the one place in our community where people come together and pool their resources to better minister to the church and the community," says Rev. Barbara Lucas, Bridge Street's assistant pastor. "But it's big business, and we must run it like a business."

L. A. CHURCH PROVIDES LIFELINE

Shortly after the 1992 riots in Los Angeles, the mammoth 9,500-member First African Methodist Episcopal (FAME) Church of Los Angeles swung into action. As an economic lifeline for the devastated community, the church created the FAME Renaissance Program to fund community services, business and economic development programs through private and public funding sources. FAME Corp. is a nonprofit organization established by the church.

Shortly after the Renaissance Program was formed, church officials competed for and received a $1-million grant from the Walt Disney Co., leading to the creation of the Micro Loan Program, which supplies low-interest rate loans of $2,000 to $20,000 to minority entrepreneurs in the area. So far, the program has approved about 34 loans totaling more than $500,000. Among the beneficiaries are day-care centers, transportation companies, restaurants, a medical billings business, cosmetics companies and a manufacturing firm. "We deal with people who won't qualify for a bank loan," explains Mark Whitlock, executive director of the Renaissance Program. "We don't mind if you have a couple of bad nicks on your credit. We don't mind if you're a brand new business that has never received a business loan before."

But FAME does mind delinquent repayment. It requires applicants to present their business plans to a panel of experienced entrepreneurs and bankers. Loan recipients whose businesses have been in operation less than two years must also go through the church's 10-week entrepreneurial training program.

Once completed, the church's moral and technical support network kicks in. "Our membership base has some 300 attorneys, 200 CPAs and 700 business owners," explains FAME's Whitlock. "For every loan we make, the recipient also gets a mentor to help support that business." Finally, there's that crucial bottomline edge: "We suggest to the congreation that they do business with the company owner we just made a loan to."

The Micro Loan Program recently received a $500,000 grant from Atlantic Richfield Corp. Ultimately, the church hopes to raise $10 million from corporations to fund as many as one thousand businesses.

ATLANTA CHURCH SPREADS THE WEALTH

While a number of African-American churches have just begun to launch the economic redevelopment projects for their communities, Atlanta's Wheat Street Baptist Church began changing the face of its historically black neighborhood in the early '60s. Today, it boasts more than $33 million in real estate holdings, making it one of the wealthiest African-American churches in the nation.

The church's nonprofit corporation, the Wheat Street Charitable Foundation, owns and manages two housing developments, several single-family dwellings and an office building. The foundation also owns Wheat Street Plaza North and South, two shopping centers located in the heart of the Martin Luther King Jr. historic district. They were built in 1969 on land purchased with church monies and bank loans, and are currently getting a $120,000 face-lift thanks to an interest-free loan from the City of Atlanta.

Says Rev. Michael Harris, the church's pastor: "Before we can think in terms of heaven by and by, we've got to live here on earth. And Wheat Street, through its economic development projects, wants to make sure life on earth is as good as it can be."

RURAL CHURCHES BUILD BUSINESSES

Not all African-American churches involved in economic redevelopment are located in major cities. A growing number of rural churches are launching businesses providing job opportunities for their members, many of whom are poor people with few skills.

When the nondenominational Mendenhall Bible Church was formed in the early 1970s in Mendenhall, Miss., church leaders knew that if they didn't provide jobs for their members, nobody would. So, they created Mendenhall Ministries, a nonprofit corporation, and built a business complex that today includes a health clinic, law office, elementary school, thrift store and recreation center. The projects were funded by private and public grants and a few bank loans.

In building its school, Genesis I, Mendenhall Ministries bought a long-abandoned school building for $20,000--it took church members one week to solicit this money from residents and corporations. But the building was in such poor condition they soon realized that renovation would easily run into the tens of thousands of dollars. That's when the church network stepped in.

"A church group from Aurora, Ill., brought 162 people down here to completely remodel and refurbish the building," recalls Rev. Dolphus Weary, associate pastor and president of Mendenhall Ministries. "They also brought about $75,000 worth of materials to do the job." Flooding the community with skilled and unskilled volunteers, the Aurora group spent one week reinforcing the two-story building's foundation, making it possible for the rest of the Mendenhall community to finish the restoration in about four months.

Mendenhall Bible Church, with only 125 members, is now trying to lure a manufacturing plant to the community to provide even more jobs for its people. It stands as proof that a church doesn't have to be large or rich to bring about tangible, positive change.

Another church making a difference in its rural community is Greater Christ Temple Church in Meridian, Miss. Bishop Luke Edwards, the church's pastor, believes in the power of pooled resources. When he founded the Pentecostal church in 1974, it had only 35 members, 96% of whom were on welfare. Edwards, now 67, got them to pool their food stamps and buy wholesale. Four months later, church members were selling food to community members out of a makeshift grocery store set up in the church auditorium.

In 1978, they parlayed proceeds from that grassroots enterprise into the $18,000 purchase of a small supermarket, which they ran for several years before selling it. Today, under its REACH Inc. (Research Education and Community Hope) nonprofit corporation, Greater Christ Temple owns three restaurants, a bakery, an auto repair shop and a 4,000 acre farm with 700 head of cattle and two meat processing plants.

Greater Christ Temple has 200 members who have "delivered themselves from welfare by pooling their resources," says Edwards. "Being black, it's very difficult to get loans. We realized we had to turn to one another. We just had to work together."

SHOULD YOUR CHURCH GET INVOLVED?

Though increasingly essential to the redevelopment of their communities, church-related business ventures can be risky. It's crucial that such endeavors be set up and run like businesses (see sidebar).

SETTING UP AN ECONOMIC DEVELOPMENT PLAN FOR YOUR CHURCH

Because churches are tax-exempt organizations, many of them are creating foundations and community development corporations to run and administer their businesses.

One advantage to nonprofit foundations and community development corporations, designated 501-(c)3, is that they can receive federal, state and city grants, donations from private foundations and government subsidies. Forprofit community development corporations cannot receive such monies.

"The community development corporation nonprofit is the best way for churches to go," says Detroit tax attorney Gregory J. Reed, author of "Progressive Clergy: Economic Empowerment Blueprint." They can receive additional help in order to further their growth and that's money, many times, that they don't have to pay back," he says.

In creating their foundations or community development corporations, churches must be sure to keep the entity separate from the church itself. These groups should have distinct boards of directors, administrators and accounting practices. In addition tobeing necessary for tax purposes, the separation can cut down on church-related politics.

In creating a board of directors, aim to mimick the diversity of the church membership and community-at-large. Also, try to recruit people whose professional backgrounds, interests and contacts can be useful in the foundation's efforts.

Hire capable people to run the foundations and corporations. Atlanta's Wheat Street Foundation is run by retired General Motors manager Eugene Jackson. Jackson, who has been a church member all his life, has a bachelor's degree in business administration from Morehouse College. Mark Whitlock, executive director of FAME's program, is a former vice president with Chicago Title, and has a degree in marketing from the University of Missouri.

Finally, most important is a well-researched, clearly defined business plan. Without one, it is impossible to define an effective strategy. Clifton Henry, an advocate of the church as facilitator of community revitalization, says that even in low-income areas, churches have the resources for economic development. Writing in the Washington, D.C.-based Neighborhood Policy Institute's "AGENDA" magazine about the churches potential, Henry, vice president of Hammer, Siler, George and Associates, says that "with careful research and responsible sterwardship by church leaders, these resources can be multiplied tenfold."

One of the most common problems with church-related businesses is tax problems and the commingling of funds. Under no circumstances are church funds to be mixed with foundation or community development corporation monies. In 1991, the Department of Justice subpoenaed all the records of Allen Church in Jamaica, N.Y.

After a four-week trial and $2 million worth of defense work paid for by the church, the Justice Department dropped their case, prompting Flake to chalk up the entire episode to political harassment. Still, the minister says he learned a valuable lesson about running church-related businesses. "When we began developing these organizations, we did not have CPAs and lawyers on base all the time," Flake says. "We did more by heart and instinct. Of course we did everything by the book to the best of our knowledge, but one has to be very careful."

Increasingly, major corporations, cities, foundations and private individuals are offering grants to churches to help fund redevelopment projects. But not all churches are comfortable with such financial arrangements, which frequently have strings attached.

Hartford Memorial Baptist Church learned a painful lesson when it received a grant in the hundreds of thousands of dollars from a conservative foundation based in Washington, D.C. Hartford's credit union complied with the grant's requirement to make loans to high-risk business ventures. Unfortunately, "the economy turned and many of the persons who were borrowing this money had good ideas, but that was it," explains Adams, Hartford's pastor. "They didn't have a good business plans; they didn't have a good handle on cash flow. Their ideas went down the drain and so did our credit union."

Bridge Street pastor, Rev. Fred Lucas, also advises caution when seeking such funds: "We actually received a grant for $15,000, but we felt the stipulations were too stringent and were taking us in a programmatic direction that we felt uncomfortable with. So we sent the money back. You always have that option. Just have your attorneys and program managers read the fine print," he advises.

Churches must also realize that not every business venture is going to succeed. In 1980, Mendenhall Ministries first got into farming by purchasing a 120-acre farm for $90,000. At its peak, the farm had 45 head of cattle and crops of peaches, watermelons, peanuts, cucumbers and peas. The crops were sold to help raise money, but it wasn't enough. The farm was closed in 1991. The church paid off the loan, but lost about $60,000 on the venture. "The same kinds of risks that are associated with economic development normally will be associated with church-related efforts," warns Emmett Carson.

Despite the risks, most ministers say they wouldn't have it any other way. Without such involvement, they say, black communities across this country would face extinction. "The risk of not doing it is greater than the risk of doing it," declares Adams of Hartford Memorial. "If we take the risk, we can provide employment opportunities, and our children can begin to acquire the skills that will take them up the ladder of economic independence."