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Capitalism Can Make It Rain For Those Who Need It Most

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When he was a child, Roosevelt Giles wanted to make it rain every day. He prayed for rain. It was his salvation. Rainy days were his only opportunity to go to school in Union, S.C. When it was sunny, along with his nine siblings, he had to spend all his hours in the field picking cotton for his sharecropper parents. He told us, “In the early 60s, that was as close to slavery as you could get.” The plantation owner cheated his father, and, being illiterate, his parents had no way to prove he was keeping more of their profit than he was owed.

They always cleared just enough to keep them on the land—and pay the company store where they had to buy all their food and supplies—with almost nothing left over for themselves. Eventually, two of his sisters paid off the family’s $11,000 debt to the plantation and bought his family a house for $2,000. At last they were free.

Giles managed to get an education, despite all that, and made money flipping houses back in the 80s, when Giles called it simply rehab and resale. All the while, he was carving out a career in software design—working for AT&T building network protocols for the Pentagon and Special Forces, back in the days of DARPA, before Giles knew he was helping give birth to the Internet. Now, as CEO of Atlanta Life Insurance and Chairman of the Alonzo F. and Norris B. Herndon Foundation that runs it, Giles is helping others who face the sort of massive obstacles to success he faced as a child.

Atlanta Life was founded by an ex-slave, Alonzo Franklin Herndon, who became a sharecropper and then a barber who ran what became the most prestigious, full-service grooming salon in Atlanta named The Crystal Palace, after the famed glass and iron exhibition hall in London’s Hyde Park. Yet, under Jim Crow laws, Herndon couldn’t even walk through his own front door—he had to enter through the back. He became a real estate investor, building decent housing for blacks who were migrating from rural areas into the city. Eventually he became Atlanta’s wealthiest black man. He founded Atlanta Life with a $140 stake as an offshoot of various social justice organizations catering to low- and moderate-income consumers. Eventually, Herndon’s wealth—through the Herndon Foundation established by his son in 1950—became one of the financial pillars of the Civil Rights movement. Its crucial investments helped found the NAACP, Morehouse College and Spelman College. Atlanta Life sold the one and only life insurance policy to Martin Luther King, Jr. when no other company would underwrite him. It also donated liberally to various arms of the Civil Rights movement and provided bail for countless students arrested during the sit-in movement.

The company was a shining example, seven decades ago, of the sort of leadership needed from the private sector now: a firm devoted to using its burgeoning profits not only to reward its workers, management and investors, but to make the world a better place. Yet it drifted from the founder’s vision. It shut down its retail insurance business and formed Herndon Capital which at first was wildly successful. It grew a relatively small amount of capital under management to $10 billion. But it took tragic risks, putting most of it in the energy sector. The sector tanked, and by the time Giles took over, the portfolio had lost $7 billion in value.

“I went to see all thirty-two institutional clients and said, ‘We failed you. I’m here to apologize for it.’,” Giles told us. “Every last one of them said, ‘It took a lot for you to come here and say that. If you get back in that business we will give you another bite at the apple.’ I knew that if I did not apologize, the brand of Herndon would be tarnished. I could not allow the name of our founder, who against all odds put this company together, to be tarnished. I knew that brand had to be saved.”

Over the past three years, he has corrected course, steering the company back to its roots, with institutional reinsurance, D&O, E&O , cyber insurance, retail insurance and the abandonment of Herndon Capital in 2017. Its clients include Delta Airlines, Georgia Pacific, Chick Fil A, and American Airlines , Georgia Pacific , MetLife, Rockwell, New York Life, Dow Chemical and U.S. Steel. The foundation provides the corporate moral compass for the corporation itself, owning 73 percent of Atlanta Life’s shares. It is a regulated financial entity, created to preserve the company’s mission of social justice. It funds a panoply of social programs through its grants, channeling profit back into the American community that provides it:

“We fund entrepreneurship training for inner city high school kids in junior and senior years. We teach from the perspective of mindset: if you have an entrepreneurial mindset you will never have to worry about a job in your life. We give them $100 a stipend for their first year in college. We tell them to pay it forward. We offer assistance to Intensive Care Unit workers at local hospitals, adding $15 an hour, in addition to salaries to nurses and paramedics so they won’t go to a bigger city during the pandemic. We help Historically Black Colleges and Universities, Robin Hood Foundation, Brave of Heart, King Center, Carter Center, the Innocence Project, the NAACP, the National Council of Negro Women and many other organizations. When the company does well, the communities do too.”

Giles believes an enlightened form of capitalism can heal all of society’s woes. And he’s leading Atlanta Life in a way that serves as a case study for anyone else who shares his faith in free enterprise. He prayed for rain as a child and got enough of it to keep his family afloat and his schooling on pace for a college degree. These days he’s trying and succeeding in making it rain for hundreds of thousands of others, paying his blessings forward in the hope that everyone else will do the same.

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