Money talks. But can it listen?
That’s the question philanthropy needs to be asking itself as we seek to address the defining challenge in America’s socioeconomic landscape today: gaping inequality, especially in our great cities.
Take Atlanta, for instance. At its surface, the city is faring a lot better than many others in the South. It’s even one of two US cities where African Americans are doing the best economically.
When you peel back the layers, though, you see that Atlanta also leads the nation in income inequality. Too many people of color are being left behind. Good isn’t good enough.
This isn’t a story unique to the city that ironically prides itself as “too busy to hate.” Atlanta’s history is singular, but the divides between haves and have-nots persist in all of America’s major metropolitan areas.
Without educational and economic opportunities, low-income communities of color often feel that the new buildings and businesses in their neighborhoods are not “for them,” but for a wealthier, almost always whiter population that will inevitably drive them out.
Those fears aren’t without good reason.
Consider these figures: Black Atlantans experience an unemployment rate that is nearly five times higher than for white city residents and have incomes that are one-third what their white counterparts make. At the same time, an estimated 95 percent of the 10,000 new apartments built in the city between 2013 and 2016 are considered luxury, even though median household income increased by only six percent over that same period.
Despite the best of intentions, we must be honest with ourselves and own up to the fact that philanthropy is missing something. There has been only marginal improvement in some cities, while in others, communities of color have lost ground.
We are making investments, economies are growing, communities are changing, but are the people we aim to serve—who for too long have systematically been excluded—truly benefiting?
This is the right question directed at the wrong audience. We need to be asking the people in these communities themselves. They have more answers than we have been willing to hear, and their solutions will be the ones that effect real change where philanthropy’s prescriptions have not. Money needs to listen.
The first step is acknowledging that these communities have been failed by persistent racial discrimination that sprung from deliberate policy choices. Pervasive inequities continue to prevent many African Americans, who make up the majority of Atlanta’s population, from accessing the opportunities that would enable them both to contribute to, and benefit fully from, the city’s growing economy.
The second step is embracing community-led approaches and policies to establish more equitable pathways to education, housing, careers and wealth. Residents are the true experts on the issues affecting their communities, and we must support them in developing and implementing local solutions.
At a practical level, this means getting comfortable with ways of operating that could be unfamiliar and outside our norms. Fewer resources devoted to creating new programs, more directed at funding existing ones. More collaboration.
Are there risks? Of course. But let’s be honest about what we’ve really been scared of. As Nathaniel Smith, director of the Partnership for Southern Equity, told NPQ last year, many foundations simply “don’t want to support communities and leaders that are going to rile up the community.” We can be better than this.
Sign up for our free newsletters
Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.
Atlanta is home to numerous promising programs worth lifting up. The Casey Foundation describes many of them—and examines the data on inequality—in a report released this spring called Changing the Odds: Progress and Promise in Atlanta, which followed up on an earlier report from 2015. Here are two ideas from that report that can begin to shift these patterns:
Supporting entrepreneurs of color
Business ownership can enable African Americans to build wealth more quickly than traditional employment, to create jobs for others in their community and to build an asset that can be transferred within or passed down a generation. These aren’t just abstract notions. They’re supported by data: firms owned by people of color hire other people of color at triple the rate of white-owned firms. Research also shows that if Black businesses were able to hire at the same rates as white ones nationally, they would create 600,000 new jobs and add $55 billion to the US economy.
Yet only four percent of Atlanta businesses owned by African Americans have more than one employee. Even more alarming, these businesses are valued 11 times lower than white-owned ones.
Enter the Atlanta Wealth Building Initiative (AWBI). It is a nonprofit supported by stakeholders from the public, private and philanthropic sectors, all working to expand business opportunities for entrepreneurs of color. AWBI has committed $3.9 million in direct and indirect capital to support everything from flexible financing options that include loans, guarantees and grants, to worker-owned cooperatives and technical assistance.
“Fair and inclusive, people-centered strategies can produce outstanding social and financial returns for all,” according to Tené Traylor, a fund advisor for the Kendeda Fund and AWBI’s board chair.
AWBI has incorporated 60 organizations, both public and private, into a peer learning network. Together, they are exploring new models to support Black entrepreneurs in gentrifying parts of the city. “We recognize that this is a tough conversation,” Traylor told the Atlanta Business Chronicle, “but if you don’t name the problem, it’s hard to tackle the problem. We want to advance big ideas. We want to ignite a conversation. We have to be comfortable with being uncomfortable.”
Empowering local communities to address housing inequities
More than half of white Atlantans own their homes, but only about a third of African Americans in the city do. Beyond the missed wealth-building opportunity that homeownership could provide, Black families are disproportionately affected by the changing rental market. Between 2011 and 2016, earnings went up 10 percent for all families but rents in Atlanta jumped 48 percent.
Of course, this is a national problem. The luxury apartment buildings going up in most downtowns are pushing up rental rates citywide. Evictions are up, too, and Black families in Atlanta and nationwide bear the brunt of that phenomenon as well.
Recognizing this problem in Atlanta, Enterprise Community Partners helped launch the HouseATL Funders’ Collective in 2008 to maximize investment in both the development and preservation of affordable housing units. The group is made up of Atlanta-area funders from the public and private sectors.
One of the collective’s first major projects was to preserve a 120-unit apartment complex on Atlanta’s Southside. Community members were sure that the complex, located just four miles from downtown, would be converted into high-cost luxury housing. And in this instance, the money listened. A subset of the collective pledged $8 million to acquire the 1940s-era building, much of which will be transformed into modern, affordable one- and two-bedroom apartments for low-income families.
HouseATL spent months assembling local working-group meetings (with more than 60 organizations represented) to formulate long-term recommendations, and they are ambitious: the plan calls for an additional $500 million in public resources and $500 million in private funding to be invested in 20,000 new and preserved affordable housing units. It also names wealth-building strategies for low- and moderate-income Atlantans and lists opportunities for collaboration.
“In Atlanta, we’re working together to ensure that we are an inclusive city for people of all incomes and backgrounds,” Christopher Edwards, chairman of Atlanta Housing, told the Business Chronicle. He added, “The housing crisis isn’t Atlanta’s alone. It’s a national crisis.”
To keep residents’ concerns and interests at the fore of the affordable housing debate, Housing Justice League, an Atlanta-based nonprofit, collects and analyzes data, including surveys and interviews, to document the impact of new development projects on neighborhoods. Using the information gathered, residents have begun advocating for a comprehensive set of reform policies that range from protections for renters during the eviction process and property tax abatement programs, to increased code and vacancy enforcement.
The work ahead
These two challenges—a support gap for entrepreneurs and an affordable housing crisis—are long-standing, but the efforts described above to address them are relatively new, having been launched just in the past couple of years. The results aren’t all in yet. Some of what community members are trying won’t work.
But many of these new approaches will work, and even more than any one proposal, the most significant development at this stage is that funders and community members have begun the hard work of figuring out how to come together on projects that are truly community-led. This kind of collaboration must continue, and on a deeper level.
The work that has begun in Atlanta is happening in other places, too, and it ought to be happening in all of our great cities. It’s time for the entire philanthropic sector to figure out how we can encourage this activity from coast to coast. It is the smart thing to do, because funders’ money will be better invested. And it’s the right thing to do, because everyone wants these communities to thrive, most of all the people living there to whom we will be listening.