North Carolina Mutual Life Insurance Company founders, John Merrick, Charles Clinton Spaulding, Dr Aaron. M. Moore (Courtesy of NC Mutual)
North Carolina Mutual Life Insurance Company founders, John Merrick, Charles Clinton Spaulding, Dr Aaron. M. Moore (Courtesy of NC Mutual)

One of the crown jewels of historical insight can be found in the commonsense approaches African Americans made toward financial growth and stability against aggressive contrary forces following Emancipation. In addition to establishing entire towns and cities across the country, these newly enfranchised Americans established financial institutions, including banks that promoted self-determination and independence.

Today, many African Americans lack a clear understanding of the nation’s financial systems, institutions, and policies – and even less clarity about how their own money operates within them. n 2018, just one-third of Americans could correctly answer at least four out of five financial literacy questions on concepts such as mortgages, interest rates, inflation, and risk, according to a 2018 study by the Financial Industry Regulatory Authority (FINRA). The disparity is greatest among African Americans. According to the 2022 TIAA Institute-GFLEC Personal Finance Index, African Americans answered an average of 37 percent of the study’s financial literacy questions correctly, whereas white Americans answered an average of 55 percent of questions correctly.

So, what happened in the last century that seems to have erased such economic strength?

Remember, whether it was a few pennies at a time earned by washerwomen or the salaries of hard-working Pullman Porters, money held by African Americans found its way into savings clubs, investment opportunities, benevolent societies, and the actuaries that generated wealth for successive generations. Said plainly: African Americans took time to learn how the nation’s financial systems worked and then made those systems work for them.

One great example was The North Carolina Mutual Life Insurance Company, founded in 1898. Its goal of uplifting Black families by insuring policyholders against accidents and death, also included providing expert financial literacy programs for Black communities. The success of this mutual enterprise was a tremendous source of pride for African Americans in Durham and across the country.

Its Mutual Thrift Club Policy targeted children as a monetary benefit as well as a financial literacy plan. An ad from their 1940 campaign reads: “Most children need lessons in THRIFT and practical knowledge about the advantage of a systematic long-range SAVINGS PLAN. If you have young sons or daughters, give serious consideration to starting them off RIGHT with Life Insurance… ‘What gift has Providence bestowed on man that is so dear to him as his children?’ – Cicero”

Like North Carolina Mutual Life Insurance Company, The Washington Informer is dedicated to providing the tools Black communities need to move forward successfully in an increasingly challenging financial environment. We believe that the greatest lessons and assets have roots in the past, so we are reaching back to retool our readers with basic information about economics and finances. We invite you to use this supplement as a quick reference to financial terms, policies, and resources.

Read, Learn, Grow.

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Dr. Shantella Y. Sherman

Dr. Shantella Sherman is a historian and journalist who serves as the Informer's Special Editions Editor. Dr. Sherman is the author of In Search of Purity: Eugenics & Racial Uplift Among New Negroes...

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