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Giving Resources to Create Wealth

E. David Ellington, Co-founder, Chairman and CEO, NetNoir Inc.

Before starting my company, NetNoir, I practiced entertainment law. Then I was introduced to a friend of a friend who was getting a master's in computer science and taught me a great deal about CD-ROM technology and multimedia. Eventually, we decided to build a business together. NetNoir, an online multimedia service based in San Francisco, focuses on Black culture and lifestyles and provides market research and media solutions to other companies that target the same market.

As my business became successful, I saw that many people of color were not participating in the digital revolution. I saw a need in the community that I wanted to address. Since I come from a pretty humble background myself, I tried to figure out how to bring people of color and other disadvantaged folks into this industry, where they can participate and not get squeezed out.

In 1997 I met Dan Geiger, consultant to the Bay Area's Local Economic Assistance Program (LEAP), who wanted to start a training program to get minorities involved in Internet businesses. I told him, "No, that's a mistake." Nonprofits and government entities are not taken seriously in this industry. What they do best is raise money. What we do best is train people and give them jobs.

A Model That Benefits Everyone

Because I run an Internet company, I know there is a need for skilled workers at a certain level--for example, programmers who have had some formal education and who can write code. However, in this burgeoning industry, I also know there is a middle layer of jobs, such as managing Web sites, that does not require any kind of degree to do.

So, with Dan and LEAP, we founded OpNet (www.opnetwork.org), a model that benefits both the new media industry and low-income youth. What we're trying to do is make sure that disadvantaged young people, between the ages of 17 and 24, get trained not just for a job but for a career shift. We plug these people into work that usually includes stock options, so that they can participate financially in the new economy.

There's a five-week training component in professional skills: how to use a laptop, how to use Photoshop and do Java scripting and basic coding in HTML. There's also some basic social training, such as learning how to answer a phone, how to dress appropriately and how to get to work on time in the morning. After that, we get the trainees into companies. We characterize it as an internship, not a job, because that allows the employer to get out of it if the person doesn't work out.

What has happened, though, is that the internships have turned into permanent jobs. Eighty percent of our trainees have been placed in internships, and about 55 percent subsequently obtained full-time employment.

Bring People Into the Mainstream

Once people learn the application of this foundational skill set, those skills can be upgraded over time--they just have to have the ability and desire to learn. And it's not just about working for Internet start-ups. Trainees can work anywhere. They can work at a bank, because banks need people to run their Web sites. They can work in city government--people are needed to run the city's Web sites and change the content every day.

OpNet has a staff who maintain relationships with each of the graduates and have regular, weekly meetings with them. There's a contract, and they're monitored heavily. If they're not performing, they get fired. We also maintain a regular dialogue with the employer, so there's a burden on the trainees, and they're tracked to make sure they perform.

But OpNet isn't just about training. OpNet is about wealth creation. The nature of Internet start-ups is such that while you may get lower pay, you also get stock options. That's where you create real wealth. That's what I wanted these folks to get exposed to. Moving beyond the focus on "ordinary income," OpNet also teaches trainees how to make investments, and how to manage this new money they're getting, because they've never had it before.

We've got people who were literally flipping burgers six months earlier, making $18,000 a year, who got into the program and are now making between $30,000 and $60,000 a year. I've got one kid who's now making $75,000! They're doing stuff they never even dreamed of. We're trying to get people into mainstream activity, to become self-sustaining and self-sufficient.

Build a Sustainable Organization

I'm co-founder and chairman of this organization, but I'm not in a position, financially, to sustain it all by myself. My contribution consists more of time and support, providing data to people and making relationships happen.

OpNet was initially funded by LEAP, a highly regarded nonprofit organization. We also went out and raised a lot of money. I've gotten a lot of friends who are very successful business people to write checks to the organization. We've obtained a variety of grants from foundations. One of our biggest grants came from the Women's Health Network, to train more women. We're actively recruiting young women for this program.

Dan Geiger, OpNet's co-founder and CEO, comes from the nonprofit side, but he has an M.B.A. and we're very like-minded. We want nonprofits to do good work, but we also want them to be much more accountable and entrepreneurial. We want them to be able to generate their own revenue and try to be sustainable, without always having to beg for grant money. So, we're looking at all kinds of revenue models.

For instance, there's job placement: If you want OpNet interns, you may have to pay us a fee as well as their salaries. Now people are approaching us, nationally and internationally, to try to franchise this model. It may be possible to have people fund our expertise, to get us to help them build an OpNet in their community in exchange for a franchise and/or setup fee. We're working on the model now. We have both a budget and a growth target.

Share Wealth to Improve Lives

My message to entrepreneurs is: Bring financial resources to an existing nonprofit, or start one yourself. Second, give time personally. It's one thing to sit at your desk and write a check and another thing to actually make the organization part of your life. The entrepreneurial resources of the participants, in helping to drive the nonprofit, are equally as important as writing checks. Third, bring the same level of expectation, in terms of entrepreneurial perspective, to the nonprofit in which you're involved.

Ultimately, philanthropy is self-serving. As a business person, I'm focused on turning NetNoir into a business and providing a return on investment for my investors. Through OpNet, I now have a great "feeder" of talent for my business as it grows, and other businesses look to OpNet for new talent the same way. But, there has to be personal satisfaction, too. And personal satisfaction comes from community activity, encouraging others to do well and improve their own lives. There's nothing more rewarding than that--nothing.

We are in the greatest economic boom in our country's history. In this economy, I would hope that entrepreneurs share their wealth and stand as examples so that more people can benefit. As more people benefit, society improves and more people get a shot at a piece of the pie. It helps us all, as a whole. It may even encourage more young people to become entrepreneurs. In my mind, that would be great.

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