Boston, May 29, 2024 (GLOBE NEWSWIRE) -- A new report from The Bridgespan Group, “Boats for a Rising Tide: How Philanthropy Can Narrow the Racial Wealth Gap,” examines the drivers of and philanthropic solutions for narrowing the racial wealth gap in the US. According to Devin Murphy, Bridgespan partner and co-author of the paper, “There has been a lot of framing of the problem over the years; our research’s aim is to offer tangible, high-potential solutions that address the problem’s scale via philanthropy.”
According to the Federal Reserve’s Survey of Consumer Finances 2022, white households at the median today hold six times the wealth of Black households, five times the wealth of Latino households, and more than ten times the wealth of Native American households. Furthermore, discriminatory practices fueling this gap have drained an estimated $16 trillion from the gross domestic product (GDP) over the last two decades.
“As we confront levels of inequality reminiscent of the Gilded Age, an increasingly important measure of economic advancement will be shared prosperity—the ability to maintain growth while ensuring a greater proportion of the population benefits,” said Murphy. “Philanthropy and private investors are in a position to lead by investing in testing, validating, and scaling interventions aimed at ensuring access to wealth-generating assets, particularly for historically marginalized communities of color."
Bridgespan’s research shares insights from interviews with more than 50 philanthropists, impact investors, and social entrepreneurs. It identifies five key drivers of the racial wealth gap in the United States and elevates five solutions for philanthropy and impact investors to address them:
- Family Inheritance: Strengthen the Movement for Baby Bonds
- Income and Benefits: Scale Employee Ownership Models
- Homeownership: Support Community-Anchored Affordable Homeownership
- Avoiding Unnecessary and Excessive Debts, Fines, and Fees: Expand Community Lending and Alternative Credit Building
- Entrepreneurship: Provide Equitable Access to Investment
The authors point out that because wealth accumulates and is passed down over generations, addressing disparities cannot be achieved through individual grit and determination alone. Rather, it requires systemic approaches attentive to the unique context of each of the drivers.
According to Bridgespan’s estimate, it would take $8.5 trillion to close the wealth gap between the median white household and the median household of color, yet the authors suggest that number is not as daunting as it seems. They point to the fact that the wealth of the top 1 percent of households has climbed $11 trillion since 2020, leaving little doubt that our economy creates the abundance needed to close the gap.
“With some of the largest and most nimble asset holders, the philanthropic community has the power and the capacity to act,” co-author and Bridgespan Manager Christian Celeste Tate says. “Philanthropy can shift the paradigm for how wealth gets created, moving us from inequity and zero-sum to shared prosperity and a more equitable society.”
Read the full report at https://www.bridgespan.org/insights/how-philanthropy-can-narrow-the-racial-wealth-gap.
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About The Bridgespan Group
The Bridgespan Group (www.bridgespan.org) is a global nonprofit that collaborates with social change organizations, philanthropists, and impact investors to make the world more equitable and just. Bridgespan’s services include strategy consulting and advising, sourcing and diligence, and leadership team support. We take what we learn from this work and build on it with original research, identifying best practices and innovative ideas to share with the social sector. We work from locations in Boston, Johannesburg, Mumbai, New York, San Francisco, Singapore, and Washington, DC.
