December 2, 2020
How Fifth Third Bank Seeks to Bridge The Wealth Gap
When it comes to driving African American engagement in wealth building, Gail Perry-Mason has been a tireless advocate for the movement. For 24 years, Perry-Mason, who rose in the securities industry from a receptionist to First Vice President of Investments for a national financial firm, has taught African American youth business and financial principles through her Detroit-based Money Matters for Youth (MMY), which includes an annual camp and year-round activities. Moreover, she has mentored a generation of young women who are now professionals within the financial services sector.
Perry-Mason has been so evangelical about MMY that she refused to let the COVID-19 pandemic slow her down. She quickly adopted an online format for the Detroit-based program. “This is the first time I’ve ever produced anything virtual for the camp. It ended up being such a blessing this year,” she maintains. “We had an opportunity to touch more youth whether they were located in Africa, North Carolina, or Maine.”
MMY continues to serve as a powerful platform to help African American youth become indoctrinated into best practices of entrepreneurship and investing as well as gain entrée into the higher education pipeline. In fact, the MMY Camp’s participants, ranging in ages from 8 to 18, have grown from 50 to many as 250. And Perry-Mason says that its young investors, divided into small-cap, mid-cap and large-cap groupings, launch companies as well receive instruction to “become value investors like the John Rogers and Mellody Hobsons of the world,” referring to the co-CEOs of Ariel Investments L.L.C., which ranks No. 1 on the BE ASSET MANAGERS List.
The financial veteran and author is proud of the fact that program participants attend college and adopt practices such as the 10/10/80 method in which 80% of income goes to living expenses, 10% to savings and investments, and the remaining “10% of their proceeds is used to help somebody in need.”
Her passion, commitment, and effectiveness have attracted an array of corporate and individual sponsors. She maintains, however, that the program could not work without Fifth Third Bank, which she repeatedly calls “family.” And for good reason, the financial services giant has provided a flow of speakers and financial resources so she can expand the program.
Citing Fifth Third as the epitome of relationship banking, Perry-Mason has sent her students to bankers for guidance and directs small firms there to review financing options. “I cannot say enough great things about Fifth Third. Their leaders from the C-suite on down put their heart into it,” she asserts.
The executive who has provided years of unwavering support: Byna Elliott, the institution’s Senior Vice President and Chief Enterprise Responsibility Officer. “Byna is the type of person who got in the elevator went to the top and sends it right back down to lift up other people,” she says.
Elliott is strongly committed to financial education programs like MMY as part of her holistic plan to address racial wealth disparities. According to Brookings Institution, the net worth of a typical white family at $171,000 is nearly ten times greater than that of a Black family at $17,150. In fact, its study further reports that the ratio of white family wealth to Black family wealth is higher today than at the start of the century. And that analysis does not include the economic fallout from the COVID-19 pandemic.
Asserts Elliott: “We sponsor the Money Matters for Youth camp, which is around teaching young people how to manage money, what the stock market looks like, and some of those other things. We’re starting to spend time with our wealth and asset management group to discuss how they could help expand the opportunity around wealth creation, and growth, in the African American and Black community.”
Taking Immediate Action In A Time of Crisis
In her expansive role, Elliott manages the financial services giant’s Corporate Social Responsibility efforts, including the Community Reinvestment Act (CRA), charitable giving from the Community and Economic Development department, economic development for underserved communities, environmental sustainability, and lending in urban and rural markets. “Fifth Third Bank has a strong commitment to service, in fact, it is a core value of the organization,” she says. “The bank is committed to making a difference and providing support to communities where our employees live and work.”
The immediate action taken when COVID-19 struck bears out the enormity of Elliot’s portfolio and impact. “I quickly communicated to my team that we didn’t have the luxury of sheltering in place quietly. We had to activate on how we would support our community,” she recalls.
Elliot maintained that “emergency funds, recovery and then long-term sustainability were the three buckets we were focused on. How do we provide our natural pocket partners, the resources to retool, re-engineer their service delivery model, and to get some much-needed services out to community? Whether that was PPE equipment, emergency childcare services for essential workers or food for the increasing need for food banks.”
Part of that thrust was providing emergency grants to small businesses that were in the process of closing their doors as well as those that had to make readjustments to their business models to serve clients in a COVID environment. At the same time, they had to change the funding mechanism and timeframe for those resources. Where a traditional grant or a foundation request might usually take two to three months, Elliott ramped up operations to handle such applications within a week or two.
Since March, 82 non-profit organizations have received $7.1 million of Fifth Third’s $8.75 million COVID-19 relief, recovery and resiliency funds. The monies have been used for COVID-19 food assistance, medical supplies, small businesses, operations and servicing low-to-moderate income individuals. $1.3 million has been disbursed in housing assistance.
As Elliott mobilized her team to handle this massive challenge, she realized African American entrepreneurs were suffering from the pandemic’s devastating effects more than other groups since their companies tended to be severely under-capitalized. In addition to being “extremely intentional” in making resources available through funding non-profits that could provide grants, she also worked closely with Kala Gibson, Executive Vice President and head of business banking, to ensure that “communities of color were not overlooked in our PPP [Payment Protection Program] activities.” In fact, Fifth Third officials reached out to every single small business customer to offer guidance and assistance.
Reimagining Hot Sam’s, Downtown Detroit’s Oldest Men’s Clothing Store
Elliott points to companies like the iconic Hot Sam’s Detroit, a 99-year-old menswear establishment in which Fifth Third was able to provide timely advice and resources. Established in 1921 by Sam Freedman, the retailer had been run by generations of the founding family for more than 70 years. Two of its top performers, Tony Stovall and Cliff Green, who had worked at the store for 20 years, managed to acquire it in 1994. As such, Stovall and Green not only expanded upon the brand and grew sales exponentially but also made it an even more vital part of the Detroit community with mentorship programs, career days, and “Dress for Success” seminars for public school students, among other activities. In March 2019, Detroit City Council honored the legendary retailer with Hot Sam’s Day, which began its countdown to its 100th anniversary.
A year later, however, the retailer was confronted with its greatest challenge: COVID-19.
“When this pandemic happened, we were very much in a thriving season. When this hit, I have to say, this is the first time that Hot Sam’s had closed its doors in 99 years,” Lauren Stovall, the retailer’s Legacy Preserver/Business Lead and daughter of the co-founder, says of the state mandate to temporarily bar designated nonessential firms from business activity in mid-March. “We had started making changes and booking appointments. It was kind of early on and we didn’t foresee that we would actually have to close the store. I remember literally saying a prayer that we would be back, and we closed the doors of the store.”
To stay in business, the Hot Sam’s team knew it had to pivot quickly. As a means of continuing to generate sales and maintain its visibility, they developed an e-commerce store. That’s when Fifth Third entered the picture.
Through a contact at the Detroit Development Fund, Hot Sam’s was able to connect with Fifth Third representatives. “I think that they were just overjoyed to be of assistance to us,” she says. “So, we gained some seed money with Fifth Third Bank and a new partnership happened. We love to say this is a partnership because that’s so key. I think this pandemic really helped us to reimagine that big businesses need small businesses just as much as small businesses need big businesses.”
The younger Stovall says they were very intentional in sharing their technological needs in order to build out a full-fledged e-commerce operation, which included updating the store’s Internet system, www.hotsamsdetroit.com, purchasing new laptops and identifying the right shipping merchants. She says: “We had to make the packaging right and figure out a shipping procedure. We literally have one store, but when you open up an e-commerce store, to me, it is literally like now you have another.” Stovall says to fully develop the required infrastructure, Hot Sam’s – with Fifth Third’s guidance – made a $53,000 investment.
The doors of Hot Sam’s reopened in June to the embrace of the community with its online operations still powering on.
Racial Equity Can Bridge The Wealth Gap
People of color, Elliot asserts, had been disproportionately affected by COVID-19 but the Summer of 2020 also placed a bright spotlight on systemic racism with the civil unrest over police brutality and institutional discrimination. In pivoting to racial inequality issues, the bank convened a diversity leadership council comprised of its most senior managers to develop a significant long-term strategy.
“We took three components that we will focus on,” says Elliott, who serves on the council, which will primarily focus on issues related to African Americans. “We have employees to make sure that before we start reaching out to others, we’re taking care of our own house. We also looked at our customer because we know that inherently a financial institution has a role in some of these systemic issues, whether it was intentional or not. We know that the homeownership rate is lower in Black and brown communities. We know that access to capital for Black and brown small businesses are impacted. We wanted to make sure we understood and engaged in working fast, and past the issues and the moving data to develop a customer strategy, and then community. I have been lucky enough to be selected to lead the community strategy.”
Housing was one area in which Elliott had a laser-beam focus. In fact, she recently announced a $600,000 collaboration, funded by the Fifth Third Foundation, to assist NeighborWorks America’s efforts to prevent foreclosures and evictions due to effects from the COVID-19 pandemic in select communities. The alliance calls for, among other measures, providing foreclosure and eviction mitigation and counseling as well as financial coaching and emergency rental assistance.
Moreover, Fifth Third has boosted its down payment assistance for homeownership to $7,500. “We’re going to be really intentional around making sure that those that are entering homeownership from a high minority community,” she says. “Instead of them taking all their savings, putting it towards a down payment, and then having to rebuild that $7,500 grant can be used to offset closing costs, or may allow them to have a savings account when they get to homeownership, and get a leg up as they start to buy a property.”
Placing African Americans on the wealth track is crucial and as such, Elliott has doubled down on financial education. “We really have a generational look at the work that we do around financial education, and wealth building, and then try to create solutions that we think are responsive to those customer segments,” she says.
One such innovation has been its Financial Empowerment Mobile – or E-bus – which rolls into neighborhoods with professionals on board to field questions and provide a number of services, including information on homeownership, credit report reviews, debt reduction strategies and the like. The vehicle is fully equipped with computer workstations and Internet connectivity.
Florida A&M: A Partnership That Works
Elliott says Fifth Third has spent considerable time working with HBCUs, continuing partnerships with institutions like Central State University, Tennessee State University and Florida A&M. In fact, the relationship with Florida A&M serves as an exemplar of the type of high-impact alliance Elliott applauds.
Hosetta Coleman, Senior Vice President and head of university relations at Fifth Third, has been integral to the advancement of the 15-plus year relationship. “I felt that strongly about the student population and the commitment of the faculty and administration to increasing the opportunities for students of color to be successful,” says Coleman.
The objective, she maintains, is to “prepare every student to be employed for generational wealth and a job that will help them get there. If it’s not with us, I want to make sure that they’re employed commensurate with their education and not underemployed.”
Shawnta Friday-Stroud, dean of the School of Business and Industry, says Fifth Third has always committed to making the necessary tools available. During the COVID-19 outbreak, it was the first corporation to become a donor to FAMU Cares for the purchase and shipment of laptops for students forced to engage in remote studies.
Friday-Stroud and her colleagues maintain that the school has gained other benefits from the partnership, including, but not limited to the following.
- The professional leadership development component in which Coleman brings a team of Fifth Third executives, including alumni, to prepare business students for internships and serve on an advisory panel to recommend curriculum enhancements.
- The Bank helped develop business case competitions. The winning teams of undergraduate students, who were judged by Fifth Third executives, were awarded scholarships to enable them to purchase iPads.
- Fifth Third has been involved in the expansive career literacy initiative, which equips students with skills like resume building, interviewing, budgeting and salary negotiation. It also includes virtual interviews to enable students to perfect their interviewing techniques.
- Critical to student development has been financial wellness training as part of the Finance Academy, which guides students to become more self-sufficient through teaching them budgeting, credit management and identity theft protection, among other essential skills. Through the Academy, students can access a financial literacy module by enrolling in the Rattlers for Financial Literacy course. Coleman says such coursework ties into the state mandate and regional accreditation requiring schools to provide financial education to reduce student debt.
In the area of financial education, Coleman says Fifth Third not only wants students to gain the means to manage their financial lives but also provide instructions to fellow classmates and primary and secondary school students. “I would like to be able to expand our program where we are able to provide students stipends to be financial advisors – like ‘Each One, Teach One’” maintains Coleman. “[I would like to see that ] not only on the financial side, but also on the computer literacy side because we very much want to see an impact on the digital divide and give exposure and access to many of our students from elementary age on up. We want them to understand the resources they need to utilize more than just social media.”
Friday-Stroud agrees. She believes such an emphasis is vital to make students more marketable and productive, stressing that Fifth Third’s leadership has a rippling and reverberating effect: “Wherever there is a need – from elementary school all the way to the time students get ready to walk out the door at our graduation receptions – Fifth Third is there.”