YOU CAN SEE THE next phase in the evolution of Operation
HOPE, the self-proclaimed "nonprofit investment bank,"
by just watching founder and Chairman John Bryant scour
the L.A.-based non-profit's downtown headquarters.
While a visitor sits in Bryant's office, with its
Zimbabwean art and photographs of him and presidents
Bush and Clinton, he searches throughout the office for
what he calls "propaganda' including a promotional
video. Every few minutes, he pops his head into the door
and apologizes for the delay. "I don't handle all the
little details anymore, so I'm lost whenever I need to
do anything," he said.
This would have been a different story 11 years ago,
when Bryant, now 37, founded Operation HOPE to help
bring banks to inner-city neighborhoods. For most of its
history, its survival and success have rested on the
shoulders of the charismatic Bryant, who worked as an
actor, concert promoter and banker before starting the
organization, which helps guide inner-city residents in
the ways of finance.
Now Bryant says he is focused on making Operation HOPE
an institution. Besides adding new executives and
promoting his existing cadre of employees, he is pushing
a new business model that emphasizes lower costs. "When
I say we've done so much for so long on so little, I'm
talking about myself and Operation HOPE," said Bryant
over pasta last week at a West L.A. restaurant.
Operation HOPE is really a hybrid of a financial
institution that provides a combination of credit
counseling and financial education to aspiring
homeowners and entrepreneurs. Participants are guided
through the approval process and introduced to any one
of 46 sponsor banks.
Through it all, Bryant has been the front man.
"We were the Homeboy Shopping Network. It was John
Bryant leading this movement of energy. But it wasn't
sustainable. Now we have a great brand, we have a
following, we get results. Now it has to be less
dependent on me."
Considering how intertwined Operation HOPE is with
Bryant, this is no small task. Tall, bespectacled and
with a booming voice, Bryant combines old-time
evangelizing with quick quips about his life.
"He's a real charmer and you like him immediately," said
Gary Wehrle, the chairman of Pacific Crest Capital, who
has known Bryant for 13 years.
During a speech to a support group for minority
employees of SBC's Pacific Bell, Bryant presented
videotaped testimonials, as well as stories about how he
was beaten up in school for wearing purple crushed
"When I give a speech," Bryant said later over lunch,
"I'm talking about myself. I speak from experience. I've
been through everything I'm telling others to avoid."
After he achieved modest success in the mid-1980s as a
bit player on TV shows, including "Diff'rent Strokes,"
Bryant began a series of ill-fated ventures, including
managing and promoting the languishing career of J.C.
Parrish, a one-time member of the Platters, the 1950s
By 1986, he said he had lost most of the money he made
from acting, as well as a beach house he owned in
Malibu. "I had great ideas poorly executed. I was trying
to do too many things at the same time and not doing it
well," he said.
Through a Hollywood connection, he landed at Wade Cotter
& Co., a lender of last resort to down-on-their luck
homeowners in minority neighborhoods. Bryant found the
work predatory, but he realized that the same model
could be targeted to folks able to repay such loans --
namely, entertainers who had streams of income but were
often cash-poor. He persuaded Wade Cotter to let him
form a new division catering to the Hollywood crowd.
When Wade Cotter went bust after an ill-fated
diversification, Bryant, on a dare, led a buyout of the
division. He started eight new divisions and proceeded
to lose $20,000 a month. Said Bryant: "It wasn't smart
Nor did he feel spiritually fulfilled. His experience
with high-interest lending left him wondering if there
was a better way of extending financial services to the
poor. He said it came to a head in April 1992, after the
L.A. riots when Bryant closed up his Westwood office and
found himself at the First AME Church. Bryant grabbed
his mentor, First AME pastor Dr. Cecil Murray, and asked
him how he could help. "He told me to take my business
skills and put them to use, then hurried away," said
That May, Bryant gathered a group of businessmen,
including Wehrle and Carlton Jenkins, then managing
director of Founders National Bank, on a police-escorted
"banker's bus tour" through South Central. "We were
devastated by the smell. It was still burning. It really
made me want to volunteer," remembered Bernard Kinsey, a
former Xerox vice president.
From that first tour, Bryant started Operation HOPE,
though he had little more than an idea and some national
attention. He turned to his contacts for help.
Kinsey, who had also become a mentor, got Bryant onto
the board of Rebuild L.A., the now-defunct
revitalization outfit headed by former baseball
commissioner Peter Ueberroth. Its staff helped him
organize and publicize additional bus tours.
Two years and several lending partners later, Bryant
started Operation HOPE's first major project, a home
loan center in South Central. Bryant soon noticed that
many of the people who came to the center had never
balanced a checkbook or set foot in a bank.
Bryant decided that Operation HOPE needed to add credit
counseling and financial education to the mix. He
convinced Hawthorne Financial, parent company of
Hawthorne Savings, to put up $1 million to create a
"Hope Center" that would combine educational seminars,
check cashing services and home loan originations.
But the $1 million wasn't enough. By the time the first
HOPE Center opened in 1996, operating costs had
skyrocketed. Worse, only three-quarters of Hawthorne's
original grant actually went to operating the centers;
the rest was for matching grants to help aspiring
homebuyers save for a down payment.
"There was no defined exit strategy on the back end, but
we were only getting money for four years. We didn't ask
for enough money up front and we didn't consider the
costs," admitted Bryant. He began soliciting other
donors for help and expanded the center's offerings to
cash checking services for below-market fees.
By 2000, two more HOPE Centers had opened and Bryant
started programs like Banking on Our Future, in which
bank executives tutor school kids on balancing
checkbooks and saving money.
Operation HOPE won some acclaim -- and notoriety -- when
it teamed with UnionBanCal Corp., parent of Union Bank
of California, to acquire a 45 percent stake in Navicert
Financial, parent of the Nix Check Cashing chain.
Even now, there is some grumbling.
"It's poverty pimping. It's all smoke-and-mirrors. I've
walked into these check cashing shops and I've not seen
anything about becoming bank consumers," said Sharon
Kinlaw, assistant director of the Fair Housing Council
of the San Fernando Valley. Union Bank senior vice
president Thomas Branch says it has converted
"thousands" of check cashing customers into banking
The next step
Even with Operation HOPE's success, problems remained.
By 2002. the three HOPE Centers were losing $3 for every
dollar in funds raised to support them, Bryant said,
which led Operation HOPE's auditor, KPMG, to warn of
The problem: Because the centers only facilitated loans
and deposits for its lending partners, they never reaped
the fruits of their efforts. "If we got a new customer,
it went directly to the bank," said Bryant. "A new loan?
Went directly to our banking partner. But we never had a
way to stay solvent without tapping our own balance
Bryant sold the banking portions of the three centers to
three banks, including Hawthorne Financial, for an
He also pulled together a new model that has banks
sponsoring HOPE Centers over a four-year period. After
that, the sponsoring bank has to buy out the banking
portion of those centers, leaving Operation HOPE to
focus on credit counseling and facilitating new
To help banks with branches in areas that have become
mostly minority, he also opened a new division called
HOPE Consulting that sends a "SWAT team" of case
managers to counsel existing customers, as well as
Until last year, Bryant continued to handle many of the
administrative, financial and fundraising roles despite
its growing size. "John was one-third administrator,
one-third fundraiser and one-third finance. Yet we were
growing rapidly," said Wehrle.
Now, he says things are different. He has hired a chief
financial officer, a comptroller and five new accounting
officers. He also elevated several longtime staff
members, including Lance Triggs, who now supervises all
of Operation HOPE's operations.
The plan? To eventually run himself out of a job by
spinning off Operation HOPE's operations into
self-supporting nonprofits. "It's become more of an
institution. John's really become a good delegator and
superb leader. But at the end of the day, he's still the
driving force and it doesn't run on autopilot," admitted
Bryant admits it as well. "Am I aware that if I walked
away, it would fall apart? Yes. Is the organization
highly dependent on me? Yes. But that's always a
problem. And I have a plan to make it less of one."