The Racial Wealth Gap
The racial wealth gap in America is persistent and undeniable. Simple solutions to “fix” the issue – like greater educational attainment, homeownership, savings rates, financial literacy, and beyond – fall far short of addressing the disparity. With discrimination baked in to program after program, black people have largely been excluded from intergenerational access to capital. In
- White families have approximately 12x the wealth of Black families and 10 times the wealth of Hispanic families. (Vox, Urban Institute)
- Black entrepreneurs are almost 3x as likely as whites to have profitability hurt by lack of access to capital and more than 2x as likely to have profits negatively impacted by the cost of capital.
- Just 12% of black and Latino business owners who applied for PPP (Paycheck Protection Program) loans reported receiving what they asked for
- Approximately 8% of grantmaking from foundations goes into communities of color in the US. (Philanthropic Initiative for Racial Equity)
Impact on Partnerships
Companies turn to nonprofits for partnerships for a host of reasons. Among those is that nonprofits more intimately understand their mission-served community’s needs and challenges. From demographic data to the makeup of leadership to program evaluation, nonprofits and corporate partners should examine how they might be excluding these audiences or serving them inequitably. Lead your partner there by having those crucial conversations, developing resources that focus on the racial wealth gap, and strategizing how your partnership can reach a more diverse audience and serve them more equitably.