The US Constitution grants each of us the right to life, liberty, and the pursuit of happiness. But lately, a sense of purpose seems to have been lost amid worsening inequality and ideological division. According to a recent poll of 2,000 voters conducted by NBC News, nearly three-quarters of Americans say the country is moving in the wrong direction, while just one in five think the opposite. Compounding on this is the fact that more than one-third of respondents think the country’s condition will worsen within the next five years. A slightly larger number, however, believe that things will improve.
Enter the Qualified Opportunity Zone, or QOZ, a relatively new program designed to bring hope to the most disadvantaged places.
QOZs were created by The Tax Cuts and Jobs Act on December 22, 2017. According to the Internal Revenue Service, a QOZ is an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as QOZs if they have been nominated for that designation by a state, the District of Columbia, or a US territory — if that nomination has been certified by the Secretary of the Treasury.
If this sounds like a lot of hoops to jump through, that’s because it is. Thankfully, a number of investment firms have rolled out Qualified Opportunity Funds (QOFs) over the past five years. These funds are charted to invest in QOZs and can allow their investors to temporarily defer taxes.
Dr. Jim White, Ph.D., the bestselling author and corporate revitalization specialist, calls QOFs a “win/win” for investors, business owners, and citizens of both urban and rural QOZ areas. “If businesses in QOZs thrive, the communities will have more jobs and better salaries to offer,” says Dr. White, whose latest book, “Opportunity Investing: How to Revitalize Urban and Rural Communities with Opportunity Funds,” takes aim at revitalizing depressed economic areas in the United States. “More people will want to relocate to successful QOZs; as a result, their infrastructure will improve, crime will decrease, and health care will be available for all.” White adds that such programs are essential to the nation “flourishing” in the decades to come.
Dr. White himself grew up in an impoverished, rural community before making his mark in the agricultural industry. Later in life, he became the best-selling author of “What’s My Purpose?” and a turnaround guru. Though he is a compulsive writer, industry leader and speaks extensively, Dr. White has kept his day job as Chairman and CEO of Post Harvest Technologies while launching a QOF in Salinas, CA. PHT stands for Post-Harvest Technologies, a manufacturer of cooling equipment for produce that dates back to the 1930s and helped make California’s central valley the country’s vegetable basket. With American agriculture and manufacturing both under threat, PHT hopes to create new opportunities — and jobs. The firm brought on a dedicated Director of External Affairs who is focused full-time on social impact, community partnerships and job creation.
Ultimately, Dr. White says that revitalization is simply an extension of his lifelong work — finding purpose — but it is also about bringing together a country that, according to Gallup, is the most divided in his lifetime. The bad news is that economic inequality has been rising around the world for decades, as vividly shown in the so-called elephant chart. The good news, according to a New York Times study completed just a year before the creation of QOZs, is that when investment is focused on the poorest areas, a little goes a long way.
“In a nutshell,” Dr. White says, “opportunity investing is about improving the quality of life for their residents by helping the companies in those areas succeed.”