NEWARK, NJ — A “first-in-the-nation investment vehicle” that has been dubbed the New Jersey 40 Acres and a Mule Fund got a big boost from the Newark City Council on Wednesday, which pledged $2 million to help keep it alive.

The statewide program – launched last year – grew out of a similar effort in Newark that kicked off in 2020. Now involving some of New Jersey’s largest cities, the fund’s goal is simple: to turn the tables on “one of the worst racial wealth gaps in the nation” by boosting Black and Hispanic business owners.

Through the fund, Garden State businesses and entrepreneurs can earn a variety of grants and loans, all aimed at “redistributing the wealth.”

While the fund targets Black and Latino/Latina-owned businesses, it also aims to boost those that serve customers in a neighborhood with a high population of minority residents. Some possible uses include creating affordable housing, rehabilitating residential/commercial properties, building community facilities and launching retail stores.

Learn more about the program and see eligibility details here.

The Newark City Council’s resolution grants financial assistance for the “making of opportunistic investments in value-added small businesses and real estate projects within the City of Newark.”

Mayor Ras Baraka trumpeted the council’s vote on the New Jersey 40 Acres and a Mule Fund, noting that the $2 million contribution is earmarked specifically for Newark investments.

“While the racial wealth gap is a major national issue, it especially impacts Newark,” Baraka said. “Black and Latinx businesses have always faced more roadblocks than their counterparts and the pandemic only made things worse. These investments will be a tremendous tool for them in Newark, and I am incredibly grateful for the generous support of our municipal council.”

Other New Jersey officials who are co-sponsoring the fund include the mayors of Paterson, Trenton, Camden, Atlantic City, East Orange, Orange and Irvington.

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There is no doubt the funds are needed, supporters say.

According to the New Jersey Institute for Social Justice, the median household wealth of New Jersey’s white families is $322,500, while the medians for New Jersey’s Latinx and Black families are just $26,100 and $17,700, respectively—one of the worst racial wealth gaps in the nation.

The fundraising goal is high; supporters hope to ultimately raise $100 million to power the New Jersey 40 Acres and a Mule Fund. But it has been attracting attention – and donations – from some of the nation’s largest corporations, including AT&T, Panasonic, RWJ Barnabas Health and Bank of America, which recently committed to invest $5 million in the program. The fund has also seen praise from celebrities such as Shaquille O’Neal and the Rev. Al Sharpton.

The money that has been invested is already paying off, according to a statement from Baraka’s office:

“The fund’s first project is a partnership with United Community Corporation to build on 10 city-owned parcels in Newark’s Central Ward, each of them selected to transform that neighborhood and provide high quality homeownership on the block. The project involves the construction of nine two-family homes and the rehabilitation of one two-family home, of which four homes will be set aside for residents that have incomes below 80 percent AMI. The project is in partnership with New Jersey Community Capital, the state of New Jersey’s largest Community Development Financial Institution.”

Many advocates, business leaders and community members have been sounding the alarm about a chronic lack of investment and capital in the Black community for years, particularly in New Jersey’s largest city.

In a recent op-ed piece, Jill Johnson – the CEO and co-founder of Newark-based nonprofit Institute for Entrepreneurial Leadership – said there continues to be a lack of funding for Black entrepreneurs and businesses, despite an average “fail” rate that is well above the national average.

“History has not been kind to Black entrepreneurs,” Johnson wrote.

“While training and education are always helpful, this is not the path to solving the problem of access to capital,” Johnson added. “In fact, this approach implies that it is the deficiency and inadequacy of the entrepreneurs themselves that creates the barrier to access to capital.”

In 2020, a Black-owned investment firm in Newark claimed racial bias in a lawsuit against the state of New Jersey, alleging that officials said the state’s pension was averse to hiring money-management firms owned by minorities.

“Systemic discrimination and racism continue to permeate America’s financial services industry,” Blueprint Capital Advisors stated in the civil complaint. “Although such racial resentment, suspicion, and destruction are most horribly illustrated by the burning of ‘Black Wall Street’ almost 100 years ago, many of the white Americans who dominate the worlds of banking and investment today still, consciously and unconsciously, act to prevent Black Americans from achieving success on the same basis, terms, and level as their white colleagues.”

This was also a stance argued by Michael Anderson, a local entrepreneur in the Brick City who staged a protest at Whole Foods in 2020.

“Our humanity is not being represented congruently with white corporate profits,” he told Patch. “Blacks have no stake in ‘the New Newark.’”

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