Philanthropy vs. the racial wealth gap in Chicago

Can philanthropic giving be focused to combat the racial wealth gap? The Chicago Community Trust, at 104 years old the 4th oldest community foundation around, is going to try. Jennifer Axelrod of the Trust's new learning and impact division presented a sneak preview last week at Loyola University's Center for Urban Research and Learning.

Source: Lumen Learning

The Trust recently adopted a new vision statement pointing towards "a thriving, equitable and connected Chicago region where people of all races, places and identities have the opportunity to reach their potential." While they work with a variety of donors and causes, Axelrod says they hope to "draw them towards" addressing the racial wealth gap, because it is at the root of so many of the social ills they combat.

Race by census tract, Chicago

 (Source; Folded Map Project)

Axelrod cited a 2017 study by the Metropolitan Planning Council concluding that Chicago's economic growth would be 2.5 percentage points higher if the metropolitan area were less segregated. Nationally, median family wealth for whites is ten times that of blacks, eight times that of Latinx; according to the Federal Reserve Board whites held 89 percent of the $87 trillion of wealth in the United States, compared to 3 percent each for blacks and Latinx. [I know it's greater than that in Washington, D.C., and probably is less here in Iowa, where we have lower incidence of great wealth.] There were a lot of data to show the connection between the racial wealth gap and myriad social problems:

• liquid asset poverty: 65 percent of black and Latinx Chicagoans are "living on the financial edge" i.e. would be below the poverty line if they lost three months' income, compared to 28 percent of whites
• Chicago people of color live in communities where more than 50 percent of debt is delinquent, 40 percent of loans are subprime, and 20 percent are unbanked. They are thus at the mercy of payday lenders, who charge average annual interest rates of 404 percent.
• people of color lag far behind whites on all kinds of assets, particularly homeownership, which is the most common source of individual wealth. 35 percent of black and 43 percent of Latinx Chicagoans own their own homes, compared to 54 percent of whites. Much of this is due to the legacy of contract buying in Chicago decades ago, which disproportionately affected blacks; because contract borrowers lose their entire equity when they miss a payment, this arrangement cost blacks as much as $4 billion in assets.
• people of color have differential health outcomes, too, particularly infant and breast cancer mortality

Audience members added different parent-teacher interactions, food deserts (even comparing different stores in the same chain), school quality, access to public transit, and greater police presence. One community member plugged the Folded Map Project, where residents try to meet those with similar coordinates--in his case, 4900 N/S 9000 W--on opposite sides of the city.

Jennifer Axelrod and Dan Tollefson talk to audience members after the presentation

The racial wealth gap originated in slavery, of course, but as horrible as that was, it has been exacerbated over the years by Jim Crow laws, redlining and exclusion from housing programs, and the decline of labor wages. Today, an American child's life prospects are heavily determined by the circumstances into which they are born, and to the extent that people of color are identified in the public mind with poverty and crime, the racial wealth gap gets replicated for each new generation. The case for reparations may rest on the history of slavery (Myers 2019), but the urgency rests in injustices since then, and the inequalities they have perpetuated.

The CCT plans "to engage donors more thoughtfully," with the intent of addressing critical needs (services as well as long-term systemic change), building coalitions and networks, and promoting community driven investment. Those are ambitious goals, as much at the engagement stage as at the more outcomes-based stages. (Are donors ready to be talked into this?) There is the ever-present danger of unintended consequences, such as when better transportation services facilitates displacement by gentrification. But if ten years from now they have helped achieve "real integration," however incrementally, they'll have made yeomanlike contribution towards our common life.