Supporting Black Business Ecosystems: Lessons From Durham’s Black Wall Street

Last year marked a century since the Tulsa Race Massacre, when, on May 31, 1921, the area known as Black Wall Street in the Greenwood district of the Oklahoma city was burned to the ground and approximately 300 of its residents were killed by an angry White mob.

During that same time period, a thousand miles away, the neighborhood known as Hayti in Durham, North Carolina — arguably the area’s own Black Wall Street — was thriving. In fact, by the end of 1921, the North Carolina Mutual Life Insurance Company (NC Mutual), which had been founded in 1898, moved its headquarters from Hayti to a luxurious, modern building in Durham’s largely White downtown. The new six-story building became a symbol for Durham as the “capital of the Black middle class,” as sociologist E. Franklin Frazier would later put it.

Why were the experiences of these two Black business communities so different, and what can they teach us about how to encourage Black entrepreneurship and business today?

Hayti’s long-lasting success compared with other Black Wall Streets around the country had much to do with the cooperation between the Black and White business communities. This ecosystem helped African American entrepreneurs overcome the three barriers they faced after slavery: access to funding, the acquisition of business skills, and intolerance and extreme racism.

A century later, there is much we can learn from these examples from the past. In order to facilitate diverse and inclusive business ecosystems today, we must be authentic and move beyond performative allyship. That means robustly engaging in the types of cooperation that will help build the sustainable cities and communities that we desperately need to facilitate social sustainability in underserved communities.

The Early Role of the Hayti District

Durham’s historic Black Hayti District, christened after the former French colony in the Caribbean that freed itself from slavery, was itself founded immediately after the Civil War by former slaves from nearby Stagville Plantation, one of the largest plantation complexes in the American South. African Americans with their own bold dreams established, owned, and led industrial works, retail services and shops, churches, schools, community organizations, a library, and a hospital. Home to more African American millionaires per capita than any other city in America by the early 20th century, it attracted the attention of luminaries such as W.E.B. Du Bois and Booker T. Washington, who marveled at its industriousness and its collectivism.

Tellingly, while the Great Migration, which took place from 1916 until 1970, saw over 6 million African Americans move away from Southern cities to escape the harsh conditions of Black codes, Jim Crow, and White supremacy in general, Durham was a net gainer of Black migrants. Durham’s Black Wall Street, which began to emerge in the late 1880s in parallel with other robust Black business districts — in Wilmington, North Carolina; Slocum, Texas; and Tulsa — escaped their eventual violent racist fates and those of nearly 40 other Black enclaves that were destroyed during the Red Summer of 1919.

Black and White Cooperation in the Durham Business Community

In the early 20th century, while other Black business districts were destroyed through racial violence, and many more Black communities nationwide lacked access to funding and necessary business skills, Hayti’s ecosystem of emerging African American entrepreneurs helped it to flourish.

Richard Fitzgerald, John Merrick, Dr. Aaron McDuffie Moore, William G. Pearson, James Shepard, and Charles Clinton Spaulding, among others, were serial collaborators in launching ventures within Hayti and sometimes outside the district. These Black business leaders habitually and systematically pooled their ideas and funds to launch an array of enterprises across the district and North Carolina.

But in Durham, both White and African American leaders routinely invested in Black entrepreneurial visions. White business leaders also patronized and advised some of these ventures.

Take the Duke family, for example. Washington Duke, the benefactor and namesake of Duke University, was the patriarch of White Durham’s largest business, American Tobacco. Duke was a regular visitor to Hayti and an investor in its businesses and in institutions such as Lincoln Hospital and St. Joseph’s African Methodist Episcopal Church. Duke’s strongest business relationship was with John Merrick, his former barber, whom he recruited to Durham from neighboring Raleigh. Merrick was a formerly enslaved man who became one of the founders of NC Mutual, which eventually grew to become the largest African American business in the United States.

The Duke family’s support of the African American business community inspired other White businesses and residents in Durham to join them in supporting their African American neighbors. These Black-owned ventures also offered value to the local ecosystem. As early as 1915, Charles Clinton Spaulding, the longtime president of NC Mutual, provided jobs for some White workers.

The benefits went both ways. For example, between 1909 and 1913, Duke-owned Fidelity Bank loaned over $100,000 to NC Mutual and earned 6% interest on that transaction. The city’s top White tobacco barons sourced bricks for their factories from Richard Fitzgerald, one of Hayti’s first highly successful African American entrepreneurs, philanthropists, and leaders.

This sustained support and partnership of entrepreneurial development through significant capital investment from both the African American and White communities of Durham helped provide financial access for Black residents. Along with an exchange of financial and social capital and knowledge, these factors contributed to Hayti’s success. African Americans were trusted with capital and allowed to entrepreneurially succeed and fail just like any other racial group.

Racial Animosity Persisted

This is not to say that widespread racism didn’t impact the African American community in this area. For NC Mutual, the largest and most successful Black business in Durham, the threat of racial violence affected employee safety and loomed as a risk calculation in many business decisions. On March 2, 1902, a group of White residents burned down an office of the original headquarters. When the company moved its headquarters in 1921, company leaders were careful to limit the building to six stories in height — several floors shorter than neighboring White-owned buildings. Spaulding was brutally attacked by a White clerk at a soda fountain because he drank the soda inside rather than outside. The incident occurred despite the fact that the clerk worked in the “colored section” of a store located in a building owned by African Americans.

Today, it is important for all groups who are committed to equitable Black business outcomes to recognize that collaboration and cooperation must go beyond symbolic gestures or a few earnest actions and directly address the roots of the systematic racism that hinders permanent progress. Though Du Bois categorized Durham as a “tolerant and helpful Southern city” for African Americans in 1912, he did accurately predict that, over time, the rise of this African American economic class of citizens in Durham might exacerbate the local race problem, not solve it.

The Decline of Hayti’s Black Business Ecosystem

Urban renewal in the 1950s and racial integration in the 1960s had destructive consequences for the Black business ecosystem in Hayti and other African American business communities. Records suggest that hundreds of businesses of a wide variety, along with thousands of homes, were torn down to construct the Durham Freeway. The single-family homes once owned by African Americans were replaced with public housing projects, and a majority of Black-owned businesses were never replaced, though it had been a promise of the developers that they would be.

Many African Americans in the community believe the construction of the Durham Freeway, routed through the heart of Hayti, was a result of decades of jealousy of Hayti’s nearly century-long prosperity and independence by some local White residents. Many African Americans further speculated that the new freeway was constructed so that White people would not have to drive through Black Durham to get downtown, though that was not given as the official reason for the plan. Still, urban renewal was just one aspect of the Civil Rights Era referenced when discussing Hayti’s decline. Another one was integration.

As a result of social integration, nearly all of the African American social and financial capital exited the community, leaving deep inequities. The urban renewal efforts devastated Hayti and left its neighborhoods without an economic foundation, as middle-class African Americans and their businesses relocated elsewhere. Out of anger at new laws forcing social and racial integration, many of Durham’s White residents stopped patronizing Hayti’s Black businesses. Economic integration went one way, out of the African American community, in Durham and beyond, and almost exclusively into the White business ecosystem — a pattern that remains today.

Since the murder of George Floyd in May 2020, corporations have made pledges totaling $50 billion to support racial justice causes. According to a recent Fortune magazine article, Creative Investment Research estimates that only 0.5%, or $250 million of those commitments, have been honored thus far. In addition, the majority of those funds are directed toward nonprofits and social organizations rather than systems for building economic solutions to the generational wealth gap between the Black and White communities. In the case of Durham, though urban renewal efforts promised to “build back better” in Hayti, they failed to focus on rebuilding the business ecosystem that was destroyed, instead concentrating only on symbolic social sector investments, which proved inadequate and fleeting.

Reimagining Black and White Cooperation for the 21st Century

For African American business ecosystems to thrive today, a cooperative advantage approach is needed. This can come only from positive interactions between African American and White financial institutions, entrepreneurs, universities, communities, and consumers that are intentional, adequate in their scope of engagement, and enduring.

By taking a note from history and following Hayti’s lead, we can imagine where to focus these efforts first. We need to dramatically increase the pipeline of Black businesses in all sectors of the modern economy, position Black businesses to capture more diverse customers and dollars, and increase the amount of public and private investments in Black businesses. We must also permanently remove race-related barriers to Black entrepreneurial success.

For example, organizations should become more intentional in creating networking opportunities for Black entrepreneurs to obtain social capital via the development of meaningful relationships with new business contacts, especially in industries where the “good ol’ boy” network is pervasive. Efforts should also be made to connect Black entrepreneurs who are located in low-income communities with highly successful entrepreneurs in more affluent communities who could help them with decision-making and access to capital.

These efforts should be undertaken in addition to those supporting social justice outcomes and fighting systemic racism. According to a recent report from McKinsey, large corporations should consider simplifying their minority-supplier certification processes so that they can take on new suppliers more quickly. Those large companies could also dedicate funding to supplier development programs that can help a greater percentage of Black-owned suppliers better participate in their supply chains.

These collaborations are needed to direct support, capital, and social networks toward helping Black business ecosystems flourish and to engender a people- and relationship-centered approach to sustainability and development.

The lessons from Hayti suggest that contemporary society must recognize that there is a cooperative advantage to be gained by becoming part of and helping to construct racially diverse business ecosystems, just as the African American and White communities in Durham recognized more than a century and a half ago.