♪♪ ♪♪ ♪♪ >> Billionaire Robert F. Smith sharing insights, next, on "The Chavis Chronicles."

>> Major funding for "The Chavis Chronicles" is provided by the following.

At Wells Fargo, diverse representation and perspectives, equity, and inclusion is critical to meeting the needs of our colleagues, customers, and communities.

We are focused on our commitment to diversity, equity, and inclusion, both inside our company and in the communities where we live and work.

Together, we want to make a tangible difference in people's lives and in our communities.

Wells Fargo -- the bank of doing.

American Petroleum Institute.

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Learn more at api.org/apienergyexcellence.

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Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

At AARP, we are committed to ensuring your money, health, and happiness live as long as you do.

♪♪ >> After settling a tax case with the IRS back in 2020, Robert Smith has emerged as a national leader on the financial needs of Black America.

♪♪ ♪♪ We are very honored not only have one of the world's leading billionaire philanthropists but an innovator, change-maker.

Welcome, Robert F. Smith to "The Chavis Chronicles."

>> Well, thank you.

I'm honored to be here and excited to have this conversation with you.

>> Growing up in Denver, Colorado, your parents were educators.

Tell us something about your upbringing and how that may have contributed to your success today.

>> I grew up in a beloved community, and it was a community -- It was segregated.

It was in a part of Denver that we settled as African-Americans, the generation before my father's generation came.

The area was called Five Points.

And then from that, we were in northeast Denver.

I remember a community that cared for each other, and it cared for its children.

And that expression of care came in many forms, from people who volunteered to manage after-school care for the parents who worked and did not come home until after the kids were out of school to -- I remember a young man who helped a group of us learn about rocketry.

He wasn't paid for it.

I'm sure he pulled the money out of his pocket to buy the kits and take his Saturday afternoons to teach us about this thing called rockets and how they worked.

And I look at that group, for instance, of kids, and of the eight of us, six ultimately ended up in professional careers in STEM.

So you can see the importance of community.

>> Your mother and father were both educators.

>> Right.

>> And so in 1963, at the March on Washington... >> Right.

>> ...your mother, Dr. Sylvia Smith, brings you as an infant to the March on Washington, where Dr. King made his famous "I Have a Dream" speech.

Knowing that your mother brought you to hear Dr. King as an infant, how has it contributed to your outlook and how you see social change today?

>> What my family did and my extended -- extended family did, we -- we lived very much as Black Americans.

And the Black American experience was in my home, was in my neighborhood, in my community.

And they weren't casual observers to our condition.

They were, you know, people in a community that focused on changing our condition.

My mother, who grew up in Washington, D.C., realized the importance of supporting what Dr. King and Reverend Abernathy and others were really trying to drive in the change for the condition of our people.

And while we were infants, myself and my brother, she said, you know, it's important that she is there and she's important -- it's important that she shows that she would bring her infants and her children to this historic event to help people understand that we support what was, again, the March on Freedom and Jobs.

>> That's right.

>> Right?

And, you know, they realized the plight that we were in, even though we were in Denver, Colorado, that it was important that we were unified as a community, not just, you know, local community, but as a community of African Americans in this country.

>> You're the founder, the chairman, and the C.E.O.

of Vista Equity Partners.

What is the mission of Vista Equity Partners?

>> The thing that education brought to me was an enlightened view on the impact of technology and impact of technology globally.

You know, when I started Vista, it was, "Okay.

How do you find these, what are called, enterprise software companies, business-to-business software companies, and bring specific operational improvements to them in a way that you can then capture value and deliver back to our stakeholders?"

And many of our stakeholders are public pensioners.

I mean, we manage about, you know, 50% of the public pensioners have some exposure to the Vista funds.

That's important because, you know, we think about the firemen, the -- you know, the civil-service workers, which often look like you and I in many cities where their contribution of the dollar is, you know, $62 every two weeks for their pension plans, they need to be managed by people that look like their sons and daughters and their grandsons and granddaughters and do it in a responsible way, which means it is building more capacity in our community to become financially literate, financially enabled, and also the ability to continue to uplift, at scale, more and more of our people.

So it's an important part of the mission.

Of course, being the best investors in enterprise software is one of the principal parts.

But part of -- in order to do that is to have diversity and to have inclusion and to have impact and to have scale of that impact in how we deliver that mission.

So that's what we focus on, and that's part of our design point.

>> I'm listening to you very carefully.

It seems to me undergirding your success in the financial markets is this ability to utilize the innovation and technology.

Talk to me about the intersection of the digital space and investment opportunities.

>> It's been an interesting journey that we've -- we have all been on on this planet as technology and computing power started to proliferate.

Early days, computers were controlled by large governments or governments, large institutions, and universities.

And then, through the power, I call it, of brilliant chemical engineers, 'cause I have to give our plug for chemical engineers, we actually were able to now manufacture computing capacity at much lower cost, which gave the ability to proliferate it.

And now it's proliferated across the planet.

And now we have connected that, that computing power, and what that has done is created a massive opportunity for human ingenuity to actually create products, solutions, and services, leveraging this compute power that heretofore had never been seen.

In fact, enterprise software is the most productive tool introduced in our business economy over the last 50 years, likely will be for the next 50 years.

Part of what our task is, you and I, is to ensure that our people have the ability to access that opportunity set, which means ensuring that all of our colleges, HBCUs, have broadband access, all of them have the ability to get internships, to train and experience what this digital transformation is, because it is hitting every industry on this planet, and participate in that digital transformation as contributors to productivity, not just users of the products.

And I think that's an important distinction that we have to drive as a focal point to our educators in our community, our leaders in our community, and, frankly, to governments to ensure that they provide equal access for our children, our students, to now gain access to this what is honestly a marvelous invention, which is computing power.

>> So that's a good segue.

You mentioned HBCUs, and one of the most famous graduation addresses in HBCU history was made by you at Morehouse College, where you not only delivered this great address to the graduating students, you announced that you were going to take care of all of their student-loan debt.

Man, all the students just jumped up in joy.

Tell us what led to that historic announcement and commitment by yourself.

>> Sure, sure.

I think the reason I thought it was important was these young men, these 400 young men, had already done the lift.

If you think about it, you know, they had borrowed the money.

Their parents borrowed the money.

You know, their grandparents borrowed the money in the form of these Parent PLUS loans, which I also went and took care of, as well, because I realized, in unpacking this, the burden.

60% of African-American wealth -- 60% of African-American wealth -- goes to servicing student-loan debt.

>> 60%?

>> 60%.

Think about that.

Okay?

And first of all, why is it that high?

Part of it's because it is the college educated who took out those loans that have higher-paying jobs.

So those who think, "Oh, I don't need that degree, you have a higher probability of making a lot more money and being a lot more successful -- as they say, stacking the paper -- if you do have a college degree because it provides access to opportunity.

Now, that opportunity doesn't necessarily mean or have to lead to a corporate job.

It can be entrepreneurship, but you have to have an understanding of critical thinking.

You know, my 20-year-old -- and he and I talk about -- you know, he's like, "Dad, what are your expectations of me?"

I said, "Son, in your 20s, I have two expectations.

One is to build skills and to develop habits."

College does that.

Okay?

And if you approach it the right way, those skills of critical thinking, analysis, analytics -- And then the habits of fulfilling commitments and the habits of engaging with elders, teachers, and habits of working together in teams, the habits of thinking about, you know, where do you fit in the construct of your community and how are you supposed to contribute to it.

College provides a lot of those frameworks.

Now, if you choose to not embrace that, that's one thing.

But if you choose to embrace it, it is a highly enriching experience beyond the academic engagement that you have.

And so all of that's an important construct, in part, that our community needs to continue to lean into.

Look, there are structural challenges still in our society where our students graduate with more debt and end up with lower-paying jobs.

Okay?

But you cannot address those often unless you are in the board room, you are in the executive decision-making where you can now bring in more interns and more students and more -- and ultimately employees who can participate and contribute to the businesses that you either are employed by or that you create as entrepreneurs.

So that's all an important part of the fabric that we have to use our HBCUs to continue to develop.

>> I know there's so many STEM-related jobs available.

>> Right.

>> But somehow our young people don't get the right counseling, even in high school, of what they should be focusing on -- the importance of math, the importance of science.

Talk to us about that.

>> That is such a critical question.

And I hope that our listening audience are made up of a number of African-American educators or educators who are educating African Americans, because it's an important thing to think about.

In many respects, I tell people that the scarcest commodity on the planet isn't oil or lithium or cobalt.

Believe it or not, it's actually software programmers.

Okay?

Software programmers -- Right now, I call it -- There's 8 billion people on the planet.

There's only 25 million of us who write code for a living.

>> Software programmers.

>> Software programmers.

I want you to think.

Software developers, software programmers have lifetime earnings which are three to five times the average NBA, NFL, or MLB player.

>> Three to five times?

>> Three to five times.

Not 3% to 5% more, three to five times.

Okay?

All of those are constructs that people need to understand.

If you really want to improve the quality of life, your family, your community, that is one of the first places that you should look.

Look, not everybody wants to do it.

Can do it is going to do it well, but you should look at the STEM fields of which that is part of it.

Our world is going through a massive transformation.

It's been characterized as the fourth industrial revolution.

Every industry on the planet is being digitized, and you need to know how to participate in that, either as a software programmer or utilizing that digital capacity in whatever it is that you do.

If you're an entrepreneur, great.

Make sure you are utilizing digital technologies to expand your market, improve your margins, you know, manage your employee base, and manage, call it the stakeholder balance, effectively.

Doing it the way we did it 20 years ago is not going to be effective for the next 20, 30, and 40 years.

All of that is part of that digital revolution that we have to be very much part of that fabric.

>> So you've chosen six cities.

>> Right.

>> Houston, New Orleans, Birmingham, Atlanta, Memphis, Charlotte.

In those six places, over 50% of all African-Americans in United States live.

>> Right, within a 100-mile radius of each of those places.

Correct.

>> So tell us what you want to do in those cities.

>> Sure.

And we've added a seventh, which is called it the Delta, in and around -- in Mississippi/Alabama.

So, what is important point is, first, to understand what I call the disparity of opportunity, which is what we did a study on after the murder of George Floyd.

A group of us at the Business Roundtable said, "Okay.

Well, what can corporations do?"

In the neighborhood I grew up in, that beloved community, we didn't have a branch bank.

>> Really?

>> No.

We did not have a supermarket.

We had small grocery stores.

We had food desert.

We had a capital desert.

Okay?

We actually today have broadband deserts in those communities.

And then you think about the next piece for you and I and our parents and generation, we actually had healthcare deserts.

Okay?

You didn't have -- we had doctors in our neighborhood, but not the specialists that were necessarily required as a population ages and matures and grows.

And so we, in essence, did an architecture and said, "Okay.

If you take those communities, what do you now need to do to enable the banking infrastructure, as an example, in one of these communities?"

The first thing is, there's no branch bank.

So what you look for is, what are the capillary banks, which are CDFIs and MDIs -- community development financial institutions or minority depository institutions -- and are they digitally enabled?

Okay?

And in many cases, they were not.

In fact, there was one in particular that, prior to the pandemic and prior to this work, would only offer -- they did 60, I think it was 60 loans -- business loans -- in a year.

When we digitized that bank, they were able to do about 7,500 loans now per year.

These are $10,000, $11,000, $12,000 loans to small businesses.

Okay.

You think about the velocity of capital, and if you look at those CDFIs and MDIs, they actually have a lower loss rate than the FDIC-insured banks.

Okay?

But they never had access to the capital.

I don't know about the neighborhood you grew up in, if you had a small business and you needed capital, you either had to borrow it from friends, okay, or you did not get access to capital.

>> You couldn't go to the local bank.

>> Couldn't go to a local bank.

Okay.

I remember we went to the bank.

Guess what -- it wasn't local.

My mom and dad, we'd get in the car and drive halfway across town to go to a tiny bank there, which is where they banked or where we banked growing up.

And the dynamic of having access to capital, having access to someone who understands your business, someone who they may or may not have to look like you, but they understand the business that you're in and what function it serves in the community and your creditworthiness and the ability to borrow capital to expand your business.

That is just one of the channels.

And so what we've done is identify in those communities what they need from a modernization perspective.

We use, in fact, one of our portfolio companies, which is the importance of having access to platforms, to create a system and tools to modernize that banking infrastructure at a cost that's reasonable, that now can they can deliver more capital into that community.

That's just one of the pillars that we focus on.

>> Well, since you made that announcement, what has been the response from businesspeople, entrepreneurs in these six places?

>> Sure.

>> Is there a call and response?

>> There is.

You know, like all things, we make the call, the response comes back more muted.

We have to make the call again, it comes back a little -- Like everything we have dealt with in our community -- community's needs, that I can recall, it takes persistence, it takes tenacity, and it takes a certain amount of wherewithal to continue to drive it forward.

Because I will applaud our children's generation.

You know, you and I, we were kind of that first wave during desegregation, and so many of us had opportunities that our parents did not have, and our children were beneficiaries of those opportunities.

When they murdered George Floyd, it was interesting how that generation of our children immediately said this was wrong, and they got it -- >> It was captured on video.

>> Yes.

And they got out on the streets... >> It was out.

It was out all over... >> Absolutely.

>> ...because the digital image... >> Right.

>> ...over and over again.

Over and over again.

>> And people got incensed.

And that was the big call to action.

The kids responded, and now our job is for those of us in positions that can do it, create a different call that says, "Let's now change the inequity dynamic in the areas where we have impact, influence, and capacity."

And that's going to take a little longer, but that does not mean we should not continue to make that call louder.

>> Now, also, COVID sort of exposed the disproportionate preexisting health conditions in our community.

And I noticed that two areas that you've really focused on, one, breast cancer for Black women and prostate cancer for Black men.

Tell us what you're doing in both of these areas.

>> Sure.

It is clear that those disparities, and many of them are, I call it, a lack of understanding and a lack of empathy in many cases by industries that can have impact.

So I was able to identify through Prostate Cancer Foundation, Mount Sinai, and the V.A., people -- people, okay?

-- in those institutions who were interested in addressing this problem.

And there's multiple ways to do it.

First, you find a group of experts.

What are the issues, what are the disparities, and now how do you challenge those?

And then how do we now ensure that our community can participate?

To give you an example, one of the things we have developed -- and we actually went to the V.A.

in Chicago to do it -- was a way to identify whether or not a person is predisposed to get prostate cancer early in their life, not in their 60s but in their 20s.

And then, from there, you can provide preventative or treatment paradigms.

And that V.A.

is the only V.A.

in the United States that actually has an equal parity of outcome between African-American men and non-African-American men.

Okay, think about that.

Because we put energy, effort, capital resources, and thought and empathetic, you know, energy around it.

We then said, "Okay.

Now how do we get back more deeply into our community?"

And that's the partnership with Mount Sinai.

And Dr. Ash Tewari -- I said, you know, "Ash, how do we solve this?"

Said, "We can solve this because if we identify it early enough, you can actually --" I said equal equal treatment and outcomes and prevent the deaths or the disablement of high-quality lifestyles.

But you've got to identify it earlier.

And of course, there's stigmas around it because our community suffered from that, from, you know, the Tuskegee experiment and some other things.

>> A lot of distrust of... >> Oh, yeah, there is distrust.

Right.

>> ...the health community, even though we are disproportionately impacted... >> Right, right.

>> ...by these maladies.

>> Right.

So, let's -- like all things, you know, let's try to change that narrative.

And so building capacity to show how these tests can be done effectively.

Show how, from that, we can end up with treatments.

And so that's what we've done with Mount Sinai and now proliferating that across the -- I'll call it the U.S. infrastructure and ecosystem that we have access to.

So, if you think about part of it is identification, understanding, and then infrastructure resources.

And we've been using Susan G. Komen as one of the main institutions by which we can create campaigns of understanding.

"Here's what you need to do, here's where you need to go, here's the treatment centers."

And then there are support groups which are as important, in many cases -- as important, in many cases -- as the actual treatments that are actually delivered.

So finding a large institution and people who have a empathetic view to understanding that that disparity is just wrong and how do we equalize the treatment, that we have to do again, continue to drive out and focus on communities where that -- where that impact is highest.

>> Robert Smith, You not only travel extensively across the United States, you travel throughout the world.

You have a global business.

Tell us, share with the audience, what are your insights for the future, in terms of diversity, equity, and inclusion?

But the key word here is equity.

>> Right.

>> How do you see -- is the trend moving in the right direction?

Give us an insight.

>> Now that we've gone into, I'll call it the superscalar environment, which are the cloud-hosted computing environments, which now exist almost everywhere on the planet, at scale, and the connectivity to them.

Many institutions, sovereign wealth organizations or sovereign wealth countries, large companies have realized that in order for them to create sustainable economies, they need to create sustainable digital participants.

And those participants are individuals, just like we have that same need here because there's 8 billion people on the planet.

There's only 29 million of us who write code for a living, and they're realizing they need to educate, inform, and enable their citizenry to participate.

We have to do the same thing here, in the U.S.

The citizenry -- we -- have to enable look like you and I.

Okay?

Or, you know, African-American, Hispanic, et cetera, because they aren't participating at parity -- equity -- in inclusion, in the digital transformation.

You can look no further than tech companies in the U.S., and look at the disparity of representation.

And if we think about this need for talent, this war for talent, you know, the way to really -- given that our borders are effectively closed right now to immigration, you have to enable your citizenry to more fully participate, which is why it's so important to ensure that every one of our HBCUs has digital infrastructure, broadband access in those communities, as well.

But all of that is an important part of our ecosystem to remain competitive as a country.

>> Sounds like a lot of opportunity, a lot of challenges.

In this world that we live in, what gives you your greatest hope?

>> Uh, it's going to sound like a cliché, but it's the spirit of our youth.

You know, when -- I have, like I said, I have my call today with my Morehouse brothers, and I am excited every time going into that call and even more excited afterwards because I see an undaunting attitude towards "We will prevail, we will express ourselves and our creative uniqueness, and we will create, you know, things that will actually add value to our community uniquely."

And community can be defined and expanded in concentric circles, but that's how they think about it, and that gives me great hope and optimism.

>> Thank you, Robert F. Smith, for joining "The Chavis Chronicles."

>> Pleasure.

>> For more information about "The Chavis Chronicles" and our guests, please visit our website at thechavischronicles.com.

Also, follow us on Facebook, X, formally known as Twitter, LinkedIn, YouTube, Instagram, and TikTok.

Major funding for "The Chavis Chronicles" is provided by the following.

At Wells Fargo, diverse representation and perspectives, equity, and inclusion is critical to meeting the needs of our colleagues, customers, and communities.

We are focused on our commitment to diversity, equity, and inclusion, both inside our company and in the communities where we live and work.

Together, we want to make a tangible difference in people's lives and in our communities.

Wells Fargo -- the bank of doing.

American Petroleum Institute.

Through API's Energy Excellence Program, our members are committed to accelerating safety, environmental, and sustainability progress throughout the natural-gas and oil industry around the world.

Learn more at api.org/apienergyexcellence.

Reynolds American, dedicated to building a better tomorrow for our employees and communities.

Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

At AARP, we are committed to ensuring your money, health, and happiness live as long as you do.

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