By Arlyn Tobias Gajilan; Earl G. Graves

(FORTUNE Small Business) – For many black kids growing up in the Brooklyn neighborhood of Bedford-Stuyvesant, the color of money has often seemed very white. That didn't sit well with Earl G. Graves, who was raised in that tough neighborhood during the '40s and '50s. He came of age during the civil rights era and has spent most of his professional life trying through charm, editorializing, and cajolery to bring about a shift in America's balance of wealth and power that would help any person of color succeed. His bully pulpit: Black Enterprise magazine. Launched in 1970, it was the first publication ever devoted to African-American entrepreneurs and corporate executives. With a $175,000 Small Business Administration startup loan, Graves created a media empire that last year generated $53 million in revenues.

Building on his flagship magazine's reputation, Graves and his three sons have also been diversifying their interests. The family concern now includes a personal-finance and business-book publishing house, an executive-conferences division, and a $90 million private-equity fund that invests exclusively in minority-owned or -managed businesses. Graves says that the fund, launched in 1997, has done so well that he's creating another. Not bad for a kid from Bed-Stuy. From his offices on Fifth Avenue, Graves, 69, recounts how he started out in Brooklyn, found his way working alongside Bobby Kennedy, and created a Magazine as dedicated to social justice as it is to business. --ARLYN TOBIAS GAJILAN

"Until I was 32, my life revolved around Brooklyn and my church. I mostly sold neighborhood real estate and dabbled in local politics. What I did was very parochial. That changed during the 1960s. Back then you would have had to be blind not to see the world changing around you. It was impossible for me to be apolitical, so in 1964 I walked into the local Democratic headquarters near election time. The sight of a well-dressed black man volunteering to sign up must have put off someone, because I got the cold shoulder. I did what was typical for me: I wrote a letter to the chairman of the Democratic National Committee. He told me to report to the New York State Democratic campaign headquarters, and I did. I was put to work as a volunteer on the Lyndon Johnson-Hubert Humphrey ticket, which encompassed Robert Kennedy's bid for the U.S. Senate. At Christmastime in 1964, Kennedy's campaign decided to host children's holiday parties in each of New York City's five boroughs. I offered to plan the one in Brooklyn. Each of the other parties was plagued by problems. At one, someone even stole all the kids' gifts.

Not on my turf, though. When Bobby stepped out of his car in front of the National Guard's 13th Regiment Armory in Brooklyn, he was greeted by comedian Soupy Sales and a local drum-and-bugle corps playing "Jingle Bells." Once inside, Kennedy was almost blasted backward by a ringing "Hallelujah Chorus" from a full gospel choir. Kennedy turned to a smiling young man at his side, looked him in the eye, and said, "This is really very good. Tell me your name again." I said, "Graves. Earl G. Graves."

Soon after, I joined Kennedy's staff as an administrative assistant. I was now working for an icon from a family of icons. Kennedy's world was filled with a steady stream of power brokers, elite athletes, and other celebrities. His world of power and privilege became accessible to me as one of his aides. In turn, I shared my world: Brooklyn and the voters that other politicians had often ignored. When he announced his presidential candidacy in 1968, we were all optimistic that his dedication to civil rights and social justice would change the country.

June 5, 1968, was a turning point for a lot of people, including myself. That night Bobby Kennedy was shot. I saw him lying on the kitchen floor of the Ambassador Hotel in Los Angeles, and blood was running out the back of his head. Tragedy was written all over that moment. It was a sad time for the country and an uncertain time for me personally. Who anticipates their employer being assassinated? I didn't have a plan B for that eventuality, but I still had to feed my wife and three young sons.

Fortunately, having been a Kennedy staffer marked me as highly employable. I was offered both a job with IBM and a Ford Foundation fellowship. Those were IBM's halcyon days, and a job there would have been a steady meal ticket. But to me it sounded like fixed income. I didn't want any limitations on what I thought I could earn. I wanted to be my own boss. So I accepted the Ford fellowship, essentially a work-study grant. Contemplating a career as a consultant to black businesspeople, I studied entrepreneurship and economic development in Barbados, where my grandparents were from. When I came back, I set out to advise business on tapping an emerging black market.

There are probably some entrepreneurs who will tell you they were lying in bed at 6 A.M. and heard the voice of God telling them to start a business. I didn't get any such call. I had thought about starting a newsletter to help with my consulting. But a few people, like Howard Samuels, a friend from my Kennedy days and then head of the Small Business Administration, suggested I should think bigger and start a magazine instead.

By the late '60s there were roughly 100,000 black businesses in the country, and most were mom-and-pop operations. But Samuels knew--and I agreed--that the number would grow. The Civil Rights Act of 1964 cleared the way for policies designed to level the playing field for minority-owned businesses. In 1968 the SBA launched a program to help minority-owned firms compete for government contracts. In 1969, President Nixon signed Executive Order 11458, which directed the Secretary of Commerce to coordinate the federal government's efforts to promote minority enterprise, in effect creating the Minority Business Development Agency.

That's the environment Black Enterprise magazine was created in. With the support of my wife, I took out a $175,000 SBA-backed loan in 1969. We were about to become the only publication devoted to black entrepreneurs and rising corporate executives. We were determined to put the words "black" and "capitalism" in the same sentence. Interestingly, it was also the year the first man walked on the moon, proving nothing was impossible. By 1970 our team published our inaugural issue with the following mission statement: "Lacking capital, managerial and technical knowledge, and crippled by prejudice, the minority businessman has been effectively kept out of the American marketplace. We want to help change this."

That wasn't easy to do early on. Time and again, I had to educate white advertisers about the black consumer. I ran around trying to convince people that black people smoke, drive cars, stay in hotels, and have credit cards. That wasn't easy. Then again, "easy" has never been a part of black people's vocabulary. Even before our first issue, I developed a media kit. Some of the copy is anathema to me now, because in many ways we pandered to a white audience. Some of the images and text we used hinted that advertising with us would be doing the right thing. While it was important to reference the recent civil rights movement, I'd do things differently today and focus more on why it's simply smart business to advertise with us.

Still, our early strategy worked. Our first long-term advertiser wrote a check for a full year of ads before the magazine hit newsstands. That was Carter Products, maker of Carter's Little Liver Pills. They were supposed to be so effective that even after you died, your liver would still be flapping around and you'd have to beat it to death with a stick. In that first year we had $900,000 in ad revenues, and the magazine was profitable by its tenth issue.

The year we first published, there were only three black people among the 3,000 serving as directors on boards of Fortune 500 companies. But I was convinced more would follow. At the time we were one of the few media outlets to cover African Americans in a way that respected their aspirations in the workplace, encouraged them to start businesses, and advised them to invest their hard-earned dollars. While major business publications like Business Week, Fortune, and the Wall Street Journal largely ignored the challenges and triumphs of black professionals, we were quick to cover them in full. In 1973 we started the BE-100, a ranking of the top 100 black-owned businesses in the country. And it was Black Enterprise that first wrote about the late dealmaker Reginald Lewis, whose TLC Beatrice was the first black-owned billion-dollar Fortune 500 company. It was us that foretold the rise of Avis's Barry Rand, Maytag's Lloyd Ward, Symantec's John Thompson, and American Express's Ken Chenault to the CEO's chair of their respective companies.

After 33 years of publishing, we are still growing. With the help of my three sons--Earl Jr. "Butch," Johnny, and Michael--who all work in the business, we're building on the firm foundation created by the magazine, which now has 375,000 subscribers. Our credibility with readers and corporate America has helped us create a popular series of executive conferences, including the Black Enterprise/Microsoft Entrepreneurs Conference, the nation's largest gathering of African-American entrepreneurs. In collaboration with John Wiley & Sons, we've also expanded into personal-finance and business-book publishing. All our titles are by and about African Americans. And with the success of our business and additional financing from Citigroup, I created the Black Enterprise/Greenwich Street Corporate Growth fund, a $90 million private-equity fund that invests in minority-owned or -managed companies. That fund has maxed out, and we're looking at starting another one along similar lines. We're also getting ready for a TV joint venture.

All those things are happening because of my sons. But Butch still has to knock on doors and educate advertisers, just as I did three decades ago. Our income as a community is now in excess of $600 billion, placing us as the ninth- or tenth-largest nation in the world in terms of income. Racism is a terrible thing, and it's alive and well. But my sons are making progress convincing companies that black consumers can afford their products. Because of them, our company's best days are still in front of it."