December 8, 2002
The New York Times
DINA TEMPLE-RASTON

CALVARY BAPTIST CHURCH sits in a Queens neighborhood where churches outnumber grocery stores and where relatively few people have given investment strategies a second thought.

The congregation is trying to change that. On Wednesday nights, the church sets aside the work of saving souls long enough to focus on the fundamentals of investing. "During the boom everyone jumped in and got a little richer, but we didn't," said the Rev. Victor Hall, the pastor of the church. "We're just trying to make sure that doesn't happen again."

Mr. Hall has enlisted his congregation in a national effort to encourage blacks to invest part of their savings in stocks, bonds and other financial instruments. Calvary Baptist is among nearly 150 churches that have joined One Thousand Churches Connected, a program led by the Rev. Jesse Jackson and the Rainbow/PUSH Coalition and sponsored by the New York Stock Exchange, the Securities Industries Association, Citigroup, Intuit, Merrill Lynch and others. Several other programs have also started in the last two years with the aim of making black Americans more comfortable with investing.

Historically, blacks have had little faith in financial markets, said Charles Jenkins, a vice president at Prudential Securities who teaches the investment classes at Calvary Baptist. "You can walk on real estate; you can touch it," he said. "You can't do that with stocks and bonds and that makes some people nervous."

According to a survey sponsored by Charles Schwab and Ariel Capital Management, 24 percent of blacks but just 14 percent of whites believe that it is too risky to invest in stocks. The survey, conducted in January and February, found that only 37 percent of blacks invest the bulk of their liquid assets through a brokerage firm or a mutual fund company, compared with 51 percent of whites. The poll found that for people whose incomes are $100,000 and higher, the percentage of blacks who own stocks is statistically equal to that of whites. But at lower income levels, much smaller percentages of blacks own stocks than do whites.

Mr. Jenkins says he believes that many people need to start with the basic terminology of investing, so he begins the program at Calvary by defining stocks, bonds and certificates of deposit. "We try to bring it down to a personal level," he said. "If one were to buy into Joe's construction company, how would you make money? What's the difference between buying a stock and just flat out lending Joe the money?"

Mr. Jenkins describes historical rates of return and risk characteristics of stocks, bonds, C.D.'s and real estate. He tells older people with a shorter investment horizon to keep the equity portion of their investments in blue-chip stocks, while younger people, he said, should consider putting some money in aggressive growth funds and stocks.

Mr. Jenkins says he doesn't recommend specific stocks or other financial products. Instead, he encourages his students to use the Internet to find information about companies. He also helps them understand financial tables and financial newspapers.

The financial congregation includes students like Gloria Burnett-Blocker, 62, a former schoolteacher in New York City. She said that before the course, she would put $50 a month aside for her 401(k) account without paying much attention to specific investments. Now, she considers herself a fairly savvy investor and makes sure that she puts at least $100 a month in a stock mutual fund. The classes were "life changing," she said. "The first company I looked at on my own was Dell Computer," she said. "In the end, I came to the conclusion that it was too volatile for me, but at least I made an informed decision when I decided that."

Instead, through her mutual fund, she holds shares of General Electric, Microsoft, Exxon Mobil, Merck, Coca-Cola and Procter & Gamble -- a mix that, she says, lets her sleep at night.

The course, however, has not persuaded Celeste Glenn to invest in stocks. Ms. Glenn, a researcher for the City of New York, keeps her money in a savings account and in certificates of deposit. "I am still too frightened to deal with the stock market, whether it is bullish or bearish," she said. "I can't explain exactly why I won't invest, but I won't. People are going crazy with all this market stuff and, frankly, I'm not ready to make that move. I am still on the fence."

Reluctance to invest during the bull market led Mr. Jackson to experiment with church-based financial classes in 1998, and to start the current program in 2001. Several other programs have also started within the last two years.

So far, though, there is only anecdotal evidence that the plans have had any impact, and Fenimore Fisher, a national director of One Thousand Churches, said it might take years to "bring about a change, not only in financial, but also in cultural habits."

Many blacks missed out on the last market boom, said Retha Hill, vice president of BET.com, an arm of Black Entertainment Television. "This is the first generation of black Americans able to accumulate wealth," she said. "Until you get comfortable with building wealth and investing you are only halfway where you need to be."

BET.com recently joined forces with the Consumer Federation of America and the Bank of America Foundation to start a program called Black America Saves. Members can join a savings club and get financial counseling. "Having a job and a paycheck isn't enough," Ms. Hill said. "I can't pass my job to my child. I can't pass along my paycheck. But I can pass my house or my business to my child, and that's the way we are going to need to start thinking."

In addition, the National Urban League and the Investment Institute Education Foundation have a program, Investing for Success, that runs workshops nationwide to help blacks see the benefits of long-term investment. The classes discuss realistic expectations for returns and how to save and invest for children's education and for retirement.

MELLODY HOBSON, president of Ariel Capital Management in Chicago, says she believes that financial education must start with children. Ariel teamed with Nuveen Investments, also in Chicago, in an investing project at the Ariel Community Academy, a Chicago public school. Since 1996, Ariel has given each entering first-grade class a $20,000 grant, which follows the students through high school.

In the first five years, the money is invested and managed by representatives from Ariel and Nuveen. The idea is to show students the benefits of long-term, consistent investment. Even with the current downturn, the portfolios are still ahead, Ms. Hobson said, declining to be more specific.

Starting in sixth grade, the class is to begin managing a gradually increasing portion of its portfolio -- 25 percent in sixth grade, 50 percent in seventh, 75 percent in eighth and 100 percent in the ninth through 12th grades. Investment decisions are to be made by class vote, and when the group graduates, the earnings are designated for scholarships, philanthropy and to benefit the academy. The seed money will be used for an incoming first-grade class.

Calvary Baptist has developed its own youth program, which is to begin next year. The idea, according to Mr. Jenkins, is to develop children's interest in investment before they can form a predisposition against it. The classes will include students from middle school and high school. "You can never start this too early," he said.