Courtesy Steven Rogers

Courtesy Steven Rogers

On May 31st, 2020, six days after the murder of George Floyd, Steven Roger's daughter Ariel sent him a text. In it, she told her dad that the Black community was suffering and that he needed to talk to them—that he needed to address the community as if he were the President of the United States. His daughter's plea led him to record a podcast that did just that, urging the Black community to both keep up the fight and take care of themselves.

But Rogers also recorded a second podcast, this one addressing a white audience, telling them exactly what they could be doing to help support the Black community. The positive response to that episode led Rogers, a retired senior lecturer to write his recent book, A Letter to My White Friends and Colleagues: What You Can Do Right Now to Help the Black Community. And in this episode of Skydeck, Rogers and I talk about the makings of America's racial wealth gap, why he thinks it is a root cause of the nation's racial crisis, and the tangible steps necessary to help erase it.

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Dan Morrell: You reflect on an anecdote that you pull from The Autobiography of Malcolm X early on in the book. Malcolm X is out there doing a speaking tour around college campuses and a young white woman approaches him and says, "What can I do? What can I do to help?" And Malcolm says nothing and walks away. And he later goes on to regret that. And I wonder how that anecdote was instructive to you.

Steven Rogers: It was hugely impactful on how I view the circumstances, and that is—like Malcolm X and I learned from him—that you must be prepared for teachable moments and those opportunities don't always come, and when they do come, if you miss them, you may be missing an opportunity to do something that is extraordinarily impactful.

So I refer to that experience in the book and say that that actually impacted the way that I felt about how Black people should respond to their friends and families asking what can I do? And I said in the book, "Please learn from Malcolm X that we can do something to actually help white people help us." And Malcolm X said the same thing as you just quoted, he regretted it because it was a missed opportunity. And in my opinion, we can't afford missed opportunities because we're in such desperate straits, and we being the Black community, we being the American community in general, we need to make sure that we take advantage of these opportunities when people are prepared to help other people and help the Black community.

DM: I know that growing up, your family, you've written, was periodically on welfare, you have stories in the book about not being able to afford milk as a school boy, and of course you go on to overcome so much of that and become incredibly successful in your career. But there's so much in this book that has you detailing all the ways that you were given opportunities that were rare. The Better Chance program that offered students in poor neighborhoods a chance to attend public schools in more wealthy suburbs. There were real financial investments in these programs that were required to do the hard work of equalizing the playing field. And as I was reading, I wondered, how did that impact how you thought about the importance of addressing the wealth gap in this country?

SR: I knew as a result of the things that had happened to me—specifically, the opportunities that I had been given—that I owed, I owed. And I owed my community, I owed America, and I knew that I had been the beneficiary of people who cared. And they cared by creating programs that were designed to help the less fortunate, they cared by creating programs that were designed to help Black people who came from poor impoverished communities from which I came.

And so with that, I knew that part of my life had to be dedicated to emulating those people and giving back. I mentioned to you that my daughter Akilah, she attended Harvard Business School and my youngest daughter, Ariel, who also attended Princeton, that both of them influenced me and had impacts on my life, and they were raised by my ex-wife and I with the model that he and she who much is given much is required. They know that they've always had to give back as well.

My life has been very intentional relative to giving back and helping others. I believe that every good business person should embrace the mindset that we are also servants of other people and to help with the uplifting of them.

DM: So there are four things in the book that you argue that white people can do to help the Black community. One of your suggestions is that people can donate to historically Black colleges and universities. What power do HBCUs have to challenge the inequities that we see?

SR: Well, Dan, HBCUs have been in existence since the 1850s. They were created like almost every Black institution was created as a result of Black people being denied opportunities. Black people were not allowed to attend predominantly white universities, despite the fact that we were taxpayers, and in response to that, Historically Black Colleges and Universities were created. And HBCUs have been enormously powerful and profound in what they produced. We know that HBCUs have produced great leaders, such as Dr. Martin Luther King, Thurgood Marshall, but we also know that today their relevance still resonates. And then we know that today, for example, 80 percent of all Black judges attended a historically Black college or university. We know that 50% of all Black lawyers attended an HBCU, 50% of all Black doctors attended an HBCU, and 40 percent of all Black engineers attended an HBCU.

There's 101 HBCUs today, and there's 300,000 students attending HBCUs, 70 percent of those students receive Pell Grants, which is for people who come from households with $25,000 or less of annual income compared to 30% of students who receive Pell Grants at predominantly white schools.

So HBCUs are enormously important to the Black community. They provide opportunities for our students in the Black community to be educated. If there were no HBCUs I believe that half of the Black students would not be in college because most predominantly white institutions don't want to burden themselves with so many students who have financial needs.

DM: One of the other recommendations you give is to put money in Black-owned banks. Part of the rationale, of course, there is that Black-owned banks are more likely to lend capital to Black applicants.

SR: Yeah, I am asking whites to make deposits up to $250,000 in Black-owned banks. At that level, it is completely insured by the federal government, so there's no risk. The reason is because Black-owned banks send money to the Black community. What we know, statistically, is that 70% of mortgages given by Black-owned banks go to Black people. We know that, Carver Bank in New York, for example, 80 percent of their commercial loans or business loans go to Black people.

And we know conversely, that less than half a percent of mortgages given by white-owned banks go to Black people. So we know one of the foundational keys to creating any type of wealth is to own a home and Black-owned banks have always been instrumental in helping Black people do that. But we also know that Black-owned banks have suffered because Black-owned banks, unlike white banks, historically, were not given the opportunities to prosper. We know that many white banks, for example, the Bank of Italy, they were the beneficiary of the federal government after the Second World War saying that, "We want to create a middle class in America."

You know, Daniel, and prior to the Second World War, there was no such thing as a 30-year mortgage, there were only five-year mortgages. Therefore mortgages were only for the wealthy. And so the federal government said we want to create a middle class so they went to the banks and they said if you give a mortgage and use this new instrument called a 30-year mortgage, we will guarantee 90 percent of that mortgage."

The result of that was that white people were able to buy homes now, and communities like Levittown, New York, were created in the suburbs. But on the condition from the federal government that none of those homes were to be sold to Black people. The federal government said that homes that were occupied by Negroes, and communities occupied by Negroes, they would draw a red line around those communities, and say that, "We will not guarantee mortgages in any of those communities." And that was called redlining.

And the result of all of that denying of Black people by the federal government, was that Black people could not get mortgages, and therefore Black people had to go to the gray market for finance. And the gray market was where white buyers were actually buying homes and selling them to Blacks on what was called contract selling, where they would buy a home, and they would sell it to Blacks for up to 30 times what they had paid for the home.

And the interest rate that they were charging would be usury, but Blacks they had no other choice. They had to access this market. And what we know is that in Chicago, 85% of all the homes purchased by Blacks in the 1950s were purchased under this process called contract buying. My grandparents had to buy a home this way. They first bought their home and they were not allowed to get a mortgage. And so for the first four years, they were paying a white owner an inflated price for this home.

And so what we know is this has hurt the Black community in so many ways. Specifically, it hurt Black banks, because Black banks were not able to prosper from these securities that are extraordinarily profitable in terms of them being mortgages, and we also know that the Black community who ended up buying homes like my grandparents under contract buying, on average, they paid $500 a month more than they would have paid had they gone to a white bank. They also ended up paying—and we've know from research—about $70,000 more over the term of the mortgage for their homes than they would have had they gone to a Black bank.

We know that 98 percent of all mortgages that were guaranteed by the federal government up to 1968 went to white people. And they were very explicit. And they said very explicitly that these mortgage guarantees are only to go to whites, and they're not to go to Negroes.

And the result, Daniel, is that today, out of all of the racial and ethnic groups in America, the home ownership of Blacks is at the lowest. And it's not because Blacks are less qualified for those mortgages, it is all as a result of anti-Black discrimination.

DM: Steven, in addition to suggesting and advocating for white people to put money into Black banks, you also suggest that they support Black businesses. Can you talk a little bit about the network effects of supporting Black businesses, what are the ripples when that happens?

SR: So I'm asking people to invest or spend at least 9.29 percent of their annual budget with Black-owned businesses. because those percentages represent the time that Officer Chauvin had his knee in George Floyd's neck. Black-owned businesses are the largest private employer of Black people in the country. And people who have jobs are self-sufficient, and self-sufficient people live in healthy communities.

So we need more Black-owned businesses to grow, and we need more Black-owned businesses in general. And so I'm asking whites to do their part by spending money with Black-owned businesses. Again, I do what I'm asking people to do. I spend almost 50 percent of my annual budget with Black-owned businesses. My dermatology firm's Black-owned. My law firm is Black-owned, my dental firm is Black-owned. And so I'm asking whites to do the same for the purpose of it trickling down to the Black community, specifically, these people will employ Black people.

DM: Your recommendation in the book is that whites take time to write letters in support of reparations. Now, in the book, your suggestion for reparations is a very specific number. That 20 million Black Americans over the age of 18 would get a $153,000 check. Talk about your calculations behind that number and what impact that approach would have. What would that do?

SR: Let me just say in terms of reparations, that Black Americans have never received reparations for 246 years of slavery, followed by 60 years of Black codes, followed by 40 years of redlining. All of these were government-sanctioned actions that had the very explicit intention of enriching whites while at the same time it was very intentional about impoverishing Blacks.

On a national level, we know that the average net worth of a white family is $170,000 versus $17,000 for a Black family. It is my contention that that wealth disparity was created intentionally by those three things that I just mentioned. They were all government-sanctioned. And that until we close that wealth gap, there will always be problems between the Black and the white community. I believe that the protests, the unrest and everything that we've seen in the country—those are just symptoms of the bigger problem.

And one of the things I learned at Bain Consulting Firm, after graduating from Harvard Business School, was don't get seduced by the symptoms of a problem, find the root cause of the problem. It is my contention that the root cause of Black-white problems is this wealth disparity, and that that wealth disparity is approximately $153,000. Therefore, I recommend that readers use a template that we created and included in the book and write to your Congressman or Congresswoman supporting HR 40, which is legislation that would look into providing reparations to the Black community.

DM: You say, at the end of the book, that you will not get effusively optimistic, but for the first time in your life, you see glimmers of hope for the Black community.

SR: Every day, I get pleased with things that I see by the white community. And what I'm always in search of, is action. And the action that I'm seeing must include wealth sharing of some kind, must include the mention of money. I'm a businessman who also has a background in Black history. And I've melded the two together with this book. I've melded my experiences and my knowledge that I've learned in Harvard Business School with experiences and the knowledge that I learned at Williams College. And I've come to the conclusion that the root cause of the problem, as I stated before, is in finance. And therefore, when I look for help from the white community, when I look for any kind of optimism, I look and see are whites willing to share their personal wealth, and/or implore the government to use wealth to help the Black community?

And yesterday, for example, one of the great things that happened that gave me a high level of optimism was that the president of the MacArthur Foundation in Chicago did a one-hour speech. And the one-hour speech was imploring the audience in one of the prominent business clubs in Chicago to support financial reparations to the Black community. I'd never heard or seen anything like that. This man made this decision to use this platform to say that Blacks are entitled to some form of financial reparations, and I'm asking all of you to support it.

So there is a level of optimism that I still have. I'm very guarded, relative to how effusive I will be, relative to, stating my optimism, and the only reason is because I believe we need to see action over a period of time versus just simply one year. But in this one year, things have been on a good path.

Skydeck is produced by the External Relations department at Harvard Business School and edited by Craig McDonald. It is available at iTunes and wherever you get your favorite podcasts. For more information or to find archived episodes, visit alumni.hbs.edu/skydeck.

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