Fifty years after the Johnson administration’s war on poverty, much has changed, but many of the social problems that “war” hoped to address continue to plague too many Americans. Fifty years ago, the discourse around poverty generally centered on civil rights and specific human needs—livable wages; good jobs; decent, safe, and affordable housing; quality education; safe neighborhoods; and affordable health care, and so forth. A contemporary poverty alleviation narrative rests not only on these earlier concerns but broadens the discourse in a global human rights context and situates it domestically as a part of a larger asset accumulation strategy or development approaches that will increase the assets of the poor. Reducing Global Poverty: The Case for Asset Accumulation (Caroline O.N. Moser ed., Brookings Inst. Press 2007).
Today, globalization, rapid technological advancements, and the growth of social entrepreneurship also portend new possibilities for global and U.S. domestic poverty alleviation. (Social entrepreneurs, persons engaged in social enterprises, “are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to move in different directions.” What Is a Social Entrepreneur, Ashoka, https://www.ashoka.org/print/972 (last visited Apr. 2014).) This contemporary focus on poverty creates not only new possibilities for deep and sustainable change but also opportunities for lawyers to assist poverty alleviation efforts in ways not imaged 50 years ago.
Much like the mission of the war on poverty, the United Nations (UN) Millennium Development Goals (MDG) created a worldwide buzz and blueprint for poverty alleviation by 2015. (The MDGs were adopted by 189 nations during the UN Millennium Summit in September 2000. The Summit, a first-of-its-kind gathering of world leaders, embraced the new millennium by adopting the Millennium Declaration and creating eight goals: (1) eradicate extreme poverty and hunger; (2) achieve universal primary education; (3) promote gender equality and empower women; (4) reduce child mortality; (5) improve maternal health; (6) combat HIV/AIDS, malaria, and other diseases; (7) ensure environmental sustainability; and (8) develop a global partnership for development. MDGs are available at http://en.reset.org/knowledge/millennium-development-goals-mdgs (last visited June 2, 2014).) While the objective was noble and shed light on global poverty, many doubted that the goals, lacking legal enforcement measures, could be achieved by the 2015 deadline. Some observers say that this type of ambitious progress tracking measure is passé. Indeed, the UN is resetting the MDG with a “sustainable development plan” highlighting good jobs, peaceful societies, strong governance, and a reduction in climate change. UN Replaces Millennium Poverty Plan with Sustainable Development Goals, S. China Morning Post (May 26, 2014), http://www.scmp.com/news/world/article/1519447/un-replaces-millennium-poverty-plan-sustainable-development-goals.
Just as perspectives on global poverty alleviation are being retooled, the U.S. domestic antipoverty discourse is being reshaped. Both global and U.S. domestic poverty alleviation will require multiple interventions from governments, civil society, and business. To that end, colleges and universities, including their law schools, are engaging in “action research” that is not just sitting on shelves and collecting dust but helping Americans, policymakers, and researchers to better understand solutions to poverty. This education and policy research—focusing on financial services, savings, ownership and assets, children’s savings accounts, and low-income students and college affordability—highlights the practical and immediate benefits of investments in these sectors. See, e.g., New Research on Low-Income Youth, Assets, and Educational Access, New Am. Found.: The Ladder, http://assets.newamerica.net/blogposts/2012/new_research_on_low_income_youth_assets_and_educational_access-74808 (last visited June 4, 2014); William Elliott with Sondra G. Beverly, Rachel Black & Thomas M. Shapiro, Assets & Education Research Symposium Report: Linking Savings and Educational Outcomes: Charting a Course for Scholarship and Policy (Nov. 2012).
In legal education, pro bono legal clinics are representing low-income individuals and the grassroots nonprofit organizations serving them, in clinics ranging from small business and community economic development to juvenile, domestic violence, and ex-offender reentry. Today, there are more than 150 transactional law clinics at U.S. law schools helping microbusinesses and nonprofit organizations working in collaboration with community partners. Some of these clinics are also engaging in action research that not only helps clients, but also serves as a platform for systemic intervention and change. Susan R. Jones & Shirley J. Jones, Innovative Approaches to Public Service Through Institutionalized Action Research: Reflections from Law and Social Work, 33 U. Ark. Little Rock L. Rev. 377 (2010).
This action research combined with real-time quality legal assistance can create powerful opportunities and models of what lawyers can do as “poverty abolitionists.” The idea of lawyers as “poverty abolitionists,” advanced by Professor Florence Roisman and building on Dr. Martin Luther King Jr.’s genius, boldly claims: “homelessness and poverty are, for our era, the equivalent of slavery and segregation: institutions that blight and stunt human life, causing misery, illness and death.” Susan R Jones, Dr. Martin Luther King, Jr.’s Legacy: An Economic Justice Imperative, 19 Wash. U. J. L. & Pol’y 39, 48 (2005) (citing Florence Wagman Roisman, The Lawyer as Abolitionist: Ending Homelessness and Poverty in Our Time, 19 St. Louis U. Pub. L. Rev. 237, 241 (2000)).
In some ways, “the battle against homelessness and poverty is . . . a continuation of the movements to abolish slavery and de jure and de facto segregation.” Id. (citing Roisman, supra). Juxtaposing this historical context to the contemporary realities of poverty sheds new light on poverty alleviation. If slavery and de jure segregation have been abolished, poverty can be abolished too. Does America have the political will? Contemporary scholars like economist Joseph E. Stiglitz, author of The Price of Inequality (Joseph E. Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (W.W. Norton & Co. 2013)), warns of the dangers of income inequality and demonstrates “that excessive inequality amounts to sand in the gears of capitalism, creating volatility, fueling crises, undermining productivity and retarding growth.” Thomas B. Edsall, Separate and Unequal: “The Price of Inequality,” by Joseph Stiglitz, N.Y. Times, Aug. 3, 2012 (book review). Indeed, inequality leads to underutilization of people, a nation’s most valuable asset; “‘to lower growth and less efficiency’”; and “‘to underinvestment in infrastructure, education and technology’” and impedes “‘engines of growth. . . . Most importantly, America’s inequality is undermining its values and identity.’” Id.
The national debate on closing the racial wealth gap “that leaves the average American family of color with only 16 cents for every dollar owned by the average white family” (Closing the Racial Wealth Gap Initiative, Insight Ctr. for Cmty. Econ. Dev. (2014), http://www.insightcced.org/communities/Closing-RWG.html) has been elevated through an initiative at the Insight Center for Community Economic Development (Insight Center), a national research, consulting, and legal organization dedicated to building economic health and opportunity in vulnerable communities. The initiative, discussed in a white paper, Laying the Foundation for National Prosperity: The Imperative of Closing the Racial Wealth Gap, provides a framework for policies that will “include people of color as full and equal participants in the economy.” Id. Because assets like a home or business are key drivers of wealth, antipoverty advocates/poverty abolitionists view income and asset creation as core strategic components in contemporary antipoverty work.
To illustrate, a research paper from the Institute on Assets and Social Policy at Brandeis University explains:
Wealth, what you own minus what you owe, allows people to start a business, buy a home, send children to college, and ensure an economically secure retirement. Without wealth, families and communities cannot become and remain economically secure. Recognizing the importance of building wealth over a lifetime, our nation has created public policies that provided incentives and subsidies for asset building activities. However, reforms are needed to ensure that such opportunities and rewards are distributed equitably.
See Thomas M. Shapiro, Tatjana Meschede & Laura Sullivan, Research and Policy Brief: The Racial Wealth Gap Increases Fourfold, Inst. on Assets & Soc. Pol’y, Brandeis Univ. (May 2010), available at http://www.insightcced.org/uploads/CRWG/IASP-Racial-Wealth-Gap-Brief-May2010.pdf.
Lawyers have worked to combat poverty in many ways, but here are a few examples of new ways they can help that were not as prevalent or were nonexistent 50 years ago.
Organizations Engaged in Community Economic Development (CED)
CED encompasses a range of strategies that emerged in response to tenacious poverty and includes economic activities from the creation and preservation of affordable low-income housing to business development, affordable and accessible child care and health care, living-wage jobs that produce not only income but assets, environmental concerns, and a host of other areas that comprise healthy communities. Building Healthy Communities: A Guide to Community Economic Development for Advocates, Lawyers and Policymakers (Roger A. Clay Jr. & Susan R. Jones eds., Am. Bar Ass’n 2009).
Business law or transactional law pro bono is a distinct area of pro bono need and encompasses the provision of legal services to organizations engaged in CED, which are mainly nonprofits. The ABA is supporting and encouraging CED work in several ways and there is more work to do. The Forum on Affordable Housing and Community Development Law has a long history in CED, while the Commission on Homelessness and Poverty has shown exemplary leadership in poverty alleviation efforts for decades. At the committee level, the Business Law Section Committee on Community Economic Development “provides a forum for lawyers to share their expertise and perspectives derived from working with (i) entrepreneurs and community-based organizations seeking to revitalize communities and (ii) the institutions that finance such initiatives.” Community Economic Development, Am. Bar Ass’n Bus. L. Section (Spring/Summer 2013), http://apps.americanbar.org/buslaw/committees/CL746000pub/newsletter/201307. More recently, the Section of Individual Rights and Responsibilities (IRR) has been advancing and expanding CED work though its Economic Justice Task Force.
Microbusiness Organizations, Microentrepreneurs, and Microbusinesses
Microbusiness development organizations (MDOs) teach financial literacy, serve undercapitalized and historically underrepresented microentrepreneurs (women, minorities, immigrants) and microbusinesses in need of technical assistance, provide business mentoring and coaching, and make loans ranging from $500 to $50,000. MDOs need help with drafting loan documents and contracts, business negotiations, corporate and regulatory compliance, zoning, and intellectual property. Microbusiness owners also need transactional legal services to create legal entities (limited liability companies, corporations, partnerships, sole proprietorships), review leases, create service contracts and licensing agreements, and protect intellectual property.
The impact of this 30-year-old growing industry is palpable.
The microbusiness industry’s leading organization, the Association for Enterprise Opportunity (AEO), champions small microbusiness as the backbone of the American economy and estimates that (1) “[t]here are more than 24 million microbusinesses in the U.S. representing 18% of all private employment and 87% of all business”; (2) “[o]ne in six private sector American employees works in a microbusiness”; (3) “[i]n the last 15 years, more Americans have become entrepreneurs than at any other time in history”; (4) “[t]he median net worth of business owners is almost 2.5 times higher than [that of] non-business owners”; (5) “[t]he odds of turning a venture backed start-up into a billion dollar business are at best 1 in 20,000”; and (6) “[i]f just one in three microenterprises hired a single employee the US would be at full employment.” Ass’n for Enter. Opportunity, The Power of One in Three: Creating Opportunities for All Americans to Bounce Back (2011), available at http://www.aeoworks.org/pdf/one_in_three.pdf (based on 2010 data).
Overall, MDOs help microentrepreneurs (who possess drive, determination, talent, and creativity) become business owners who contribute to family income and serve as community role models and in some instances sources of neighborhood employment. For some, like immigrants and people with criminal records, microbusiness may be their only option for earning income, a phenomenon known as necessity entrepreneurship. For others, it’s an alternative to a second or third job.
Minority Small Businesses
The Insight Center explains why minority business development is so important. “Owning a business has been the most effective way to build wealth in America and the wealthiest individuals in communities of color have traditionally been business owners.” Insight Ctr. for Cmty. Econ. Dev., Pol’y Brief: The Racial Gap in Business Development 1 (June 2009), available at http://www.insightcced.org/uploads/CRWG/Racial-Gap-Biz-Dev-6-09.pdf. Researchers have found that the generational wealth gap between African-American and white families has more than quadrupled, causing them to characterize it as a “stampede.” Shapiro, Meschede & Sullivan, The Racial Wealth Gap, supra.
Providing context for the economic wealth divide, Howard University Law Professor W. Sherman Rogers, author of The African American Entrepreneur: Then and Now, explains the historical realities of racial discrimination as the primary cause of wealth and income disparities between African Americans and whites. W. Sherman Rogers, The African American Entrepreneur: Then and Now (2009). His work confirms that entrepreneurial endeavors create prosperity for disadvantaged groups and that minority entrepreneurs are more likely to hire other minorities. Overall, pro bono assistance to minority entrepreneurs who are unable to afford legal assistance can contribute to poverty alleviation.
Social Entrepreneurship
Social entrepreneurship is another form of entrepreneurship that is on the rise. Social entrepreneurs possess “powerful, new system chang[ing] idea[s].” Ashoka is a leading nonprofit organization that supports the social enterprise sector. It was founded by attorney Bill Drayton, who explains that social entrepreneurs “have the same core temperament as their industry creating peers” but “focus their entrepreneurial talents on solving social problems—why children are not learning, why technology is not accessed equally, why pollution is increasing and so on.” Traditional and social entrepreneurs try to fix a part of society in need of change, persistently forging new paths. Deborah Burand, Susan R. Jones, Jonathan Ng & Alicia Plerhoples, Clinical Collaborations: Going Global to Advance Social Entrepreneurship, 20 Int’l J. Clinical Legal Educ. 500 (2014) (citing William Drayton, The Citizen Sector: Becoming as Competitive and Entrepreneurial as Business, 44 Cal. Mgmt. Rev. 120, 123 (2002)).
The social enterprise movement is so entrenched that new corporate legal entities such as low-profit limited-liability companies or L3Cs and benefit corporations have been created to embrace it. The L3C is a hybrid limited liability company (LLC) offering the protection of a corporation, the flexibility of a partnership, and an explicit social mission purpose. Similarly, benefit corporations allow social enterprises to affirm their social missions in their corporate charters. Susan R. Jones & Jacqueline Lainez, Enriching the Law School Curriculum: The Rise of Transactional Legal Clinics in U.S. Law Schools, 43 Wash. U. J. L. & Pol’y 85, 108–12 (2013).
Conclusion
Some of today’s contemporary approaches to poverty alleviation have the potential to create sustainable change in ways not imagined 50 years ago. Lawyers have an important role to play in supporting groups engaged in CED and microbusiness development organizations, providing financial literacy education and microloans that help low- and moderate-income microentrepreneurs, as well as social enterprises and businesses with for-profit and nonprofit elements, with social change missions.
CHECKLIST
Lawyers can help:
1 organizations engaged in community economic development
2 microbusiness organizations
3 nonprofit organizations supporting workforce development
4 minority small businesses
5 immigrant microentrepreneurs
6 women microentrepeneurs
7 entrepreneurs working in the creative economy
8 nonprofit groups working in sustainable agriculture
9 social entrepreneurs
10 health care microbusinesses
11 citizens returning to communities after a period of incarceration (returning citizens, also known as ex-offenders)
12 youth microentrepreneurs
13 graying entrepreneurs (also known as entrepreneurs of advanced age)
14 nonprofit organizations working on assets and education
15 environmental justice organizations
Lawyers can also:
16 sign up for pro bono panels with local bar association projects such as the D.C. Bar CED Pro Bono Project
17 agree to assist law school legal clinics with complex transactional issues or complex litigation
18 make charitable donations to organizations supporting new ideas in poverty alleviation
19 get involved with local bar association CED committees
20 get involved in ABA entities and committees focused on poverty alleviation, e.g., the Commission on Homelessness and Poverty and the IRR Task Force on Economic Justice
21 share their experiences and write articles about their pro bono successes to encourage others.