No Silver Bullet: Behind an Effort to Tackle the Racial Wealth Gap in Urban America

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It’s no secret that urban America is ground zero of rising economic inequality, with some of the largest gaps in prosperity found in major metro areas, especially on the coasts. It’s also clear that race often plays a big part in how that shakes out. Over the past two decades, advocates and academics have gained deeper insight into the origins of the racial wealth gap, and what systemic factors enable some people to get ahead while others remain stuck in poverty. For years now, these insights have informed investments by grantmakers like the Ford, Mott, Annie E. Casey and Kellogg foundations to help the economically disadvantaged build assets, often with a specific focus on racial disparities.

Lately, though, amid a growing national debate on race and equity, this area of research and grantmaking has become even hotter. 

Urban America Forward is a case in point. Launched in 2015, the initiative is based at the University of Chicago’s Center for the Study of Race, Politics and Culture. According to Alaina Beverly, assistant vice president for urban affairs at the university’s civic engagement department, Urban America Forward aims “to bring multiple thought leaders together representing nonprofit, public and philanthropic sectors.”

During 2015 and 2016, Beverly told me, the initiative “focused on the policy landscape, with multiple forums on a wide range of issues. Everything from urban education to poverty to criminal justice and juvenile justice, community health, infrastructure.” Exploring a broad, place-based racial equity agenda, those initial convenings drew support from funders like—you guessed it—Ford and Kellogg, but also the Kresge Foundation and Atlantic Philanthropies. 

The 2017 forum, held this October, zeroed in on racial wealth inequality in cities. “We wanted to delve more deeply into one issue and build the capacity of organizations of color in this field, providing models of where we’re seeing success,” Beverly said. Unlike previously, corporate funders played a significant role this time. The Prudential Foundation served as lead sponsor, with additional support from Ariel Investments. Prosperity Now (formerly CFED), a leading nonprofit in the asset building space, also joined this year.

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Also new are a set of catalyst grants, two at $35,000 each, that Urban America Forward will award, likely in early 2018, to nonprofits engaged in financial empowerment and wealth-building work on the ground. The two corporate sponsors are covering the first grant and collaborating with the university to fund the second. While the application pool is limited to organizations that participated in the forum, it’s not limited to the city of Chicago. Grantees will focus on tactics like financial literacy, debt reduction, homeownership promotion, workforce development and investing in minority businesses and entrepreneurship, as well as working with public sector partners. 

While these grants are small, the selection committee includes major players: the Urban Institute, Prudential, Citi and PolicyLink, and the University of Chicago itself. The corporate tilt reflects a pattern we’ve seen a lot of recently. Business powerhouses, including many leading financial companies, are upping their support for asset building in urban areas, a strategy that segues with their increased focus on workforce and youth development. As we’ve noted before, more top financial firms seem to understand that severe inequality may hurt business in the long run, especially as people of color in urban areas account for an increasing share of both their future consumer base and workforce. 

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For Ariel Investments, however, the reason for supporting Urban America Forward may lie closer to home. The $10 billion firm was founded by John W. Rogers Jr., a native son and frequent UChicago donor whose father was a Tuskegee Airman and whose mother was the first black woman to graduate from the university’s law school. He’s also a supporter of the Obama Foundation, which has become a key player on Chicago’s South Side.

In that part of the city, as in too many urban communities, people of color can find themselves trapped in a cycle of poverty that was set in motion long ago, and which compounded over time. According to Beverly, one takeaway from this year’s convening is that “there have been structural decisions made that have generational results on families’ economic mobility. From redlining to predatory lending, they all affect a family’s prosperity today, as well as the mobility of their community.” 

Efforts to build household wealth are one critical key to disrupting this trajectory. But much more needs to be done. To overcome long-term economic disenfranchisement, Beverly says, communities of color need collaborative support. There’s no silver bullet to fix these entrenched problems. That insight—that successful anti-poverty efforts require getting a wide range of stakeholders engaged and working together—is now fueling a growing array of initiatives backed by funders in this space. 

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