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It may seem counterintuitive, but in order to close the wealth gap, we must shift our focus from the gap itself to the policies, conditions, and systems that spawned it.

By Anne Price -September 15, 2020

racial wealth gap
Photo courtesy of wp paarz via Flickr. CC BY-SA 2.0
[The following is an excerpt from the Roosevelt Institute | Don’t Fixate on the Racial Wealth Gap: Focus on Undoing Its Root Causes]

If we are committed to tackling racial wealth inequities, we must focus squarely and unapologetically on their root causes. Whether you call it the racial wealth gap or the racial wealth divide, it’s time to go beyond the supreme goal of closing it altogether if we want to actually start making progress toward a more economically equitable society. It may seem counterintuitive, but we can’t tackle racial wealth inequality by predominantly focusing on closing the gap.

There are several key reasons this framework is not useful today.

First, describing the problem as a racial wealth gap doesn’t help us clearly articulate a vision that is based on the values we hold most dear. We could simply narrow the Black-white racial wealth gap if white families lost their wealth and became poorer without providing any gains to Black families. This is not what we want for either community or our society more broadly. What we really want is liberation and dignity for all people; however, fixating on closing racial wealth gaps does not guarantee that we can deliver that.

Second, focusing on closing the racial wealth gap keeps us locked into the status quo—and often reflects a neoliberal discourse—by upholding personal responsibility narratives and strategies of entrepreneurial liberation and other fallacies. Solutions born from the racial wealth gap framework have traditionally included individual-based approaches.

Utilizing these approaches—such as helping families open a bank account, encouraging savings, seeding young children with $50, or opening businesses with little capital—without changing structural barriers gives us a false notion that class-based solutions will solve racial inequities and deep-seated racism. In other words, while there is a growing recognition that slavery, Jim Crow, redlining, segregation, and discrimination have deeply impacted Black families, solutions written to close the racial wealth gap are still very much predicated by communities of color and specifically Black Americans making better financial decisions and taking personal responsibility. If we think that well-off white individuals and households acquired their wealth only through individual ability and effort—ignoring the role of social and economic policies in driving wealth accumulation for white families—then we will continue to urge Black people to work harder and “play by the rules.” This neoliberal language of individualism and personal responsibility operates to intentionally ignore structural factors and hold everyone accountable to the rules of a colorblind, seemingly fair playing field.

Research from the Groundwork Collaborative shows just how pervasive these narratives are: When asked to identify a single factor that has most contributed to their economic situation, Black people most commonly pointed to “personal drive and persistence” (27 percent) and the way that they were raised by their family (26 percent).

The dominant gap-focused framework distracts us from reckoning with the systemic economic decisions that are actually driving racial wealth inequality and addressing their root causes. Far too often, we promote policies that address the symptoms of racial wealth inequality and not its root causes. Mehrsa Baradaran, a law professor specializing in banking law at the University of Georgia, notes that Black people have often been urged to engage in capitalism with no capital and suggests that over the last 50 years, nearly every legislative response to separate and unequal credit markets has been centered on symptoms and not the root cause of racial credit inequality. She asserts that by focusing on small community banking, minority-owned banks, and mission-oriented institutions, which are viewed as “community-empowerment” approaches, we looked past the larger structural forces and shifted the responsibility of a solution to marginalized communities themselves. The sheer magnitude and enduring legacy of discrimination, segregation, and intentional theft require a suite of policies and strategies that are far-reaching and structural. Anything less will prevent us from enacting meaningful change to the rules and structures that uphold wealth inequality and cement Black Americans in a disadvantaged place.

Getting to the Root of the Racial Wealth Gap and Why Power Matters: Housing

The 2008 foreclosure crisis provides a chilling illustration of how outsized corporate power and distorted public power created the greatest confiscation of economic assets from Black people in modern American history. The deregulation of the financial sector allowed politicians to dismantle the protections created after the stock market crash of 1929 that launched the Great Depression, encouraging financial institutions to take unproven risks. Housing brokers invented and reinvented loan terms at their whim while politicians looked on from the sidelines. Bankers deliberately issued mortgages to families who could not afford them with the intention of taking their homes, so they could turn a handsome additional profit from reselling them. The toxic mix of irresponsible financial deregulation, bankers’ exploitative practices and reckless gambling and borrowing, and too little transparency resulted in an estimated $7 trillion in home equity stripped from American families; Black people had nearly half (47.6 percent) of their wealth removed from their grasp. This was a white-collar heist of epic proportions.

And the same corporations that were responsible for the foreclosure crisis in 2008 continue to profit off of and extract wealth from Black Americans today. Investors have erected a shadow housing market in which traditional mortgage foreclosure protections don’t apply through new predatory arrangements like land installment contract sales. This built-to-fail arrangement largely targets Black people and other communities of color who do not qualify for conventional loans, and it uses methods to find ways to cancel the contract so as to churn over as many would-be homeowners as possible. This type of contract was historically used to sell homes to friends and family, but the use of land installment contracts attracted predatory investors because they can reap massive profits by quickly evicting defaulting borrowers.

There is little wonder as to why homeownership rates among Black Americans have declined to levels not experienced since racial discrimination was legal in the 1960s. The Great Recession, for instance, slowed early Black Gen Xers’ ability to purchase homes from 2000 to 2010 (when they were in their 30s and early 40s) and resulted in more of this generation having their homes taken than becoming homeowners after 2010. Homeownership is often mischaracterized as a prime driver of racial wealth inequality and has been an ongoing focus of efforts to close the racial wealth gap. Although most Black people with some wealth are more likely than white people to hold a greater share of wealth in their homes, the evidence simply does not support the claim that racial homeownership differences explain racial wealth inequality.

Moreover, an emphasis on increasing Black homeownership as a means to close a racial wealth gap derails us from addressing the root causes of discrimination, exploitation, and predation in our nation’s housing markets. It also obscures who has the power in our economy by promoting a neoliberal frame of inclusion and colorblindness. Historically, homeownership programs allowed the real estate industry outsized influence and control over residences that intended to serve a high share of Black people. In turn, Black Americans are at the whims of an industry whose wealth has been largely generated through racial discrimination and segregation as a business model. Moving beyond the goal of closing a racial wealth gap means addressing the compounding effects of structural racism, residential segregation, and extractive corporate practices that ensure that the gains of the economy flow to powerful corporations and white elites. Residential segregation is a mechanism that maintains white supremacy and has been upheld by private interests through the public sector. Although governments at all levels have been complicit in practices that promote segregation and discrimination, they must lead the way in dismantling racial oppression.

To improve the lives of Black people and all Americans, a greater public provision that attends to both market dynamics and structural racism is critical. We must use the power of government to weaken the stronghold that private equity firms and the real estate industry have over Black people. A proposal from Mehrsa Baradaran, for example, would create a federally funded program that places investment dollars and equity directly in the hands of community members. It calls for purchasing abandoned properties and granting them to families who are struggling to get by or to those who experienced direct harm from redlining and disinvestment.

A massive boom in new construction would create countless jobs and help finally end the legacy of racist housing policies.

By Matthew Yglesias@mattyglesiasmatt@vox.com  Updated Sep 23, 2020, 7:15am EDT

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Part of The Great Rebuild Issue of The Highlight, our home for ambitious stories that explain our world.


As America’s generals were plotting the final moves of World War II, its economists had another concern: the potentially dire economic consequences of victory.

The war, of course, had been preceded by a severe and prolonged depression. And many thought its end would bring back mass unemployment; after all, the demobilization of soldiers in the wake of World War I created a severe recession. In 1939, Alvin Hansen, a leading American Keynesian economist, published a famous analysis suggesting that with the frontier closed, the United States was now due to become a country with slow population growth and structurally deficient demand for investment. In other words: It was destined to be a country mired in frequent recessions.

The war had solved the problem, providing employment for millions both as soldiers and as workers in war production industries. But after the war, what would they all do?

America found its answer in what historian Kenneth Jackson memorably dubbed “the crabgrass frontier” — suburbs opened by the automobile and the construction of the Interstate Highway System — which became the engine for a new era of growth. The ability to construct vast tracts of new, larger homes — homes that ex-soldiers could purchase thanks to subsidized loans via the GI Bill of Rights — became the source of investment demand that Hansen feared America would lack.

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The new homes would have to be filled with durable goods, including appliances, furniture, and cars, that factories no longer busy serving as the arsenal of democracy could churn out. Along the way, the debt-financed purchase of homes became an engine of wealth accumulation that America’s growing families could pass on to their children.

This story has become well known lately for its role in widening the racial wealth gap. Black neighborhoods and mortgage applicants were largely excluded from federal largesse even as the civil rights movement was winning victories in the courts and, eventually, in Congress.

An equivalent policy approach today must be racially inclusive and more mindful of environmental sustainability, but house-building as the cornerstone of rebuilding the economy remains a solid idea. The United States is currently both underhoused and underemployed but possessed of plenty of capacityto build more. A combination of rental assistance for consumers, capital funding for affordable housing, and regulatory relief for builders of all kinds could unleash a massive boom in new construction, creating countless blue-collar jobs and laying the foundation for a new era of inclusive prosperity.

It only needs to direct money to those in need and provide regulatory relief to those inclined to build.


Before there was Covid-19, there was the Great Recession. And before that, the great housing price bubble of the mid-aughts.

Despite the enormous price increases in some metro areas during the bubble, the number of houses built then was modest — extremely modest compared to the scale of the housing slump that followed. The perception of a George W. Bush-era house-building boom is largely an illusion, wrote Mercatus Center researchers Kevin Erdmann and Scott Sumner, “based on the fact that construction of new single-family homes did reach record levels in 2005–2006.” But it did not result in a sky-high quantity of total housing. Instead, they wrote, the single-family boom was a “shift of market share out of manufactured and multi-unit homes.”

So after more than a decade of post-boom slump, the United States is significantly short of houses. Even before the pandemic — i.e., during a time of economic growth — the number of young adults living with their parents was rising, according to the Pew Research Center, while the Urban Institute found an increase in the share of Americans with crowded housing arrangements. This overcrowding was a policy failure on its own terms, but also proved to be tinder for the spread of the virus.

Unlike in the 1940s, we don’t really need to do much now to get people subsidized loans. Mortgage interest rates are at record lows, so families with the means to make a down payment can easily buy. But then there’s everyone else.AFTER MORE THAN A DECADE OF POST-BOOM SLUMP, THE UNITED STATES IS SIGNIFICANTLY SHORT OF HOUSES

“We certainly need a renters’ policy in America right now,” says Darrick Hamilton, the executive director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State, who’ll soon be rejoining the economics faculty at the New School in New York. Policies that focus on cheap credit, such as what the Federal Reserve has delivered, or the Trump administration’s emphasis on tax cuts, can help boost a severely depressed economy. But Hamilton cautions that they also exacerbate gaps between people who already have the money necessary to take advantage and “the existing residents who aren’t positioned to benefit from those incentives.”

Democratic presidential candidate Joe Biden has already proposed fully funding the Section 8 housing voucher program. The program helps millions of low-income families by putting housing assistance directly in their hands — and creates a huge new market opportunity in building homes for them to rent. But pre-pandemic, Section 8 excluded about 75 percent of eligible households, and it will only exclude more as joblessness grows. Mary Cunningham, the vice president for metropolitan housing and communities policy at Urban Institute, says making it universal “will go a long way in making sure every American has a home.”

While Biden has endorsed the idea, he has not really foregrounded it in his campaign rhetoric, nor has he indicated that he sees it as part of an economic recovery program. But it’s extremely well targeted as economic stimulus to give money to families who are sure to spend it. If paired with smart regulatory ideas, it could unleash a real boom in house-building that creates jobs and lays the foundation for future prosperity.


A big difference between the housing problems of today and those of two generations ago is where the demand is. Sprawling construction of new homes continues to take place on the crabgrass frontier, but in most cities of any size, that frontier is now located far from the most convenient commuting routes. And in the geographically constrained cities of the Pacific Coast and the Northeast Corridor, and in cities like Denver and Miami, the frontier is essentially closed. A healthy dose of the future of construction has to be “infill” — new development in already developed neighborhoods. That happens today to an extent in low-income or formerly industrial neighborhoods, but it’s often blocked by local homeowners in the priciest areas where new building would be most desirable.

“Those that are better positioned politically, economically, and even racially are able to use state apparatus, including zoning laws, to enrich themselves at the expense of others,” Hamilton says.

Until relatively recently, the Trump administration agreed with this diagnosis, arguing that exclusionary zoning laws were hurting the economy and contributing to the rising homelessness problem of pre-Covid-19 America. Housing Secretary Ben Carson even tweeted in 2018 that “we must look at increasing the supply of affordable housing by reducing onerous zoning regulations.”

But more recently, Trump has been trying to counteract poor polling results among upscale whites by promising to uphold the “suburban lifestyle dream” by excluding apartments from upscale neighborhoods. The St. Louis couple made famous for waving guns at protesters, the McCloskeys, warned at the Republican National Convention that progressives have an agenda for “ending single-family home zoning,” which would “bring crime, lawlessness, and low-quality apartments into thriving suburban neighborhoods.”

There is nothing wrong with single-family homes. But a regulatory requirement that only single-family homes be built across vast swaths of land is a recipe for housing scarcity, and it explains why decent housing has slid out of reach for so many middle-class families in some American cities. Equipping the lowest-income residents with financial assistance will be a big boost to them, but no amount of cheap credit and vouchers can compensate for an objective shortfall of dwellings.

Most Democrats aren’t actually seeking to abolish single-family zoning. A visionary effort in California to force high-income and transit-proximate communities to accept apartment buildings died in the overwhelmingly Democratic state legislature last year on a vote that scrambled party allegiances and saw many Southern California liberals take the McCloskey family view.

But the city of Portland offers an alternate vision of reform.


Last summer, the Oregon state legislature took action to allow two-unit structures across almost the entire state and three-unit ones in its larger towns. This doesn’t “abolish the suburbs,” but it does ensure that a wider variety of house types are available in a wider range of communities.

And this summer, the city of Portland went even further, enacting what the Sightline Institute’s Michael Andersen calls “the best low-density zoning reform in the US.”

The details are a bit complicated, resulting from a coalition-building process that doesn’t lend itself to easy single-sentence description. But the urbanist and illustrator Alfred Twu produced a graphic for Sightline that shows the breadth and scope of changes, including an easier path to build accessory dwelling units, relaxed parking rules, legalization of four-unit “cottage clusters,” and a structure for building small, six-unit apartment buildings if half the units are provided at deeply subsidized rates to poor families.

This should allow nonprofit builders to create mixed-income buildings that generate enough rent from market-rate tenants to cover operating costs.

Madeline Kovacs, who helped organize the coalition that secured the historic reform, says it took a combination of determination and open-mindedness to build an alliance between skeptics of overweening regulation and advocates for low-income communities. The bill’s contents are hard to summarize cleanly because it was a question of “getting those people around the table and hashing it out, over and over and over again.” But ultimately it worked, and it mobilized enough citizen enthusiasm to match the notorious status quo bias of the community meeting process.

“We matched anti-housing testimony and even outstripped it by a couple of people,” she said.

But just because you can build new types of housing doesn’t mean you will. That’s where money comes in.


The genius of policy that allows more market-rate construction — whether that’s zoning for duplexes in the suburbs or taller apartments in central cities — is that the Federal Reserve has already acted to make the financing easy. If there’s a project that pencils out as profitable, and the regulatory climate allows it to be completed in a reasonable time frame, loans are cheap these days. But more jurisdictions should pay attention to that time frame issue. With state and local tax bases hard-hit by the pandemic and study after study after study after study confirming that more market-rate house-building improves affordability, every jurisdiction should look at how it can ease off on anti-housing rules.

But there is more to life than the profit motive.

“There’s practically nothing in the American political or economic system that doesn’t run straight into housing,” says Felicia Wong, the president and CEO of the progressive Roosevelt Institute. Whether you’re talking about education, policing, transportation, climate, or access to jobs, the nature of the building environment is critical. Subsidizing low-income renters on the demand side can be extremely helpful. But constructing non-market housing to deliberately promote integration or expand access, as envisioned in Portland, should also be on the table.

“We would also argue at Roosevelt that the federal government has a role in providing more affordable housing,” Wong says.

As Portland’s example shows, funding non-market housing is not in tension with regulatory reform. Instead, if we want affordable housing to exist in any quantity outside of the most depressed areas, we need regulatory reforms to allow its construction.

Matthew Yglesias is a senior correspondent focused on politics and economic policy. He is one of the co-founders of Vox. He’s a host of TheWeeds podcast, and the author of One Billion Americans: The Case for Thinking Bigger.

This story is part of The Great Rebuild, a project made possible thanks to support from Omidyar Network, a social impact venture that works to reimagine critical systems and the ideas that govern them, and to build more inclusive and equitable societies. All Great Rebuild coverage is editorially independent and produced by our journalists.


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written by Dr. Herman Gallegos

When someone with the authority of a teacher, say, describes the world and you are not in it, there is a moment of psychic disequilibrium as if you looked into a mirror and saw nothing.

Adrienne Rich, “Invisibility in Academe”

The COVID-19 pandemic and Black Lives Matter protests have exposed hard truths about the long history of racism and ethnic prejudice in US society, truths that have long been purposely ignored, leaving Blacks and other people of color disproportionately vulnerable to negative consequences for their health, economic security, class, and power. This paper offers a perspective about where Latinos fit in the national conversation on race as the US confronts anti-Black racism.  This paper also queries the role philanthropy plays in hindering or abetting the meaning of equity in American life. 

As a trustee and witness to the generosity of American philanthropy nationally and internationally, I have learned and observed with marked interest that foundations have not  probed sufficiently inward to examine the weaknesses that mar the quality of philanthropy as a life-giving force aimed at reducing inequality and injustice.  While my commentary will focus on the problems rather than the strengths of foundations, I include  achievable  suggestions for strengthening the sector. It is out of a duty of care and respect for the field of philanthropy that my comments are presented, including data on the status and condition of Latinos as a way to call attention to the human costs caused by systemic racism and discrimination. In this paper, my use of the term Latino is meant to be gender neutral and inclusive of other terms including Latinx, Latino/a, Hispanic, and Mexican American, to name a few.

The two premises of this paper are:

1. With a few notable exceptions, charitable foundations have been largely insulated from the broad-reaching public debate accompanying the spate of recent inquiries about racism in American institutions. In particular, foundations have rarely been examined for their responsiveness to the concerns of Latinos. As I will indicate, grants to Latino-led organizations are scarce, and Latino representation on staffs and boards remains woefully inadequate.

2. While foundations should be among the most flexible and innovative agents for advancing social progress, most foundations, with some exceptions, remain laggards and not leaders in the support of Latino causes. Foundations enjoy broad tax privileges; it follows that foundations must live up to these privileges by working toward the nebulous ideal of the “public interest.”

That the Latino community supports Black Lives Matter is not an issue for debate. Recently, 40 national Latino organizations signed a letter pledging their support for Black Lives Matter and their commitment to further multiracial solidarity with the goal of addressing racism and colorism, including anti-Blackness in the Latino community. I’m proud that two national organizations I cofounded, Hispanics in Philanthropy and Unidos US, are signatories to the pledge.

Strong actions by the Latino community in support of Black Lives Matter are also reflected in a recent Siena College poll, cited in the New York Times, that “found 21% of Hispanic voters said they had participated in Black Lives Matter protests, nearly identical to the 22% of Black voters who said they had done so.” 

Although racist police violence disproportionately affects Blacks, the recent death in Tucson of a Latino, Carlos Ingram Lopez, as reported in the New York Times, “was a jarring reminder that Latinos as well as African Americans have a troubled history with police, even though Latinos’ struggles do not get the same attention.” 

According to Janet Murguia, CEO of UNIDOS U.S., “A 2017 study found that 78% of Latinos believe they face discrimination in this country. Another survey found that 68% of Latinos fear police will use excessive force against them.”  

In November 2019, the FBI reported that the number of anti-Latino or Hispanic hate crimes rose by over 21% in 2018. Another study showed that hate crimes increased by 17% against Latinos in California. The bloody history of lynchings of Mexican Americans in the Southwest United States from 1848 to 1928 is another tragic but overlooked footnote in the history books about racism in this country—books that have long excluded Latinos.

Increasingly, COVID-19 is ravaging Latino, African American, and Native American communities that are infected and dying at a disproportionately higher rate than Whites. According to the CDC’s Morbidity and Mortality Weekly Report, “Among cases with known race and ethnicity, 33%were Hispanic, 22% were black and 1.3% were American Indian or Alaska Native.”

A New York Times article reported the following: “While it’s clear Black and Latino people are more likely than white people to be exposed to the virus, many of them have frontline jobs that keep them from working at home, and they rely on public transportation, live in cramped apartments or live in multigenerational homes.”

The ability to access safer, affordable housing is affected by poverty, the glaring wealth divide, and racist housing policies that prevent communities of color from enjoying the full benefits of home ownership as a way of acquiring wealth and resources to end intergenerational poverty. Poverty rates of 20.2% for Blacks and 20.3% for Latinos are more than twice as high as that of Whites at 8.7%. 

The already large wealth disparities (shown below) between White households and households of color continue unconstrained:

Median net worth of White households: $171,000

Median net worth of Hispanic households: $20,700

Median net worth of Black households: $17,000

Richard Greene, a USC professor and real estate and urban economist, observed that “if all discrimination ended today, it would take over 20 decades for families of color to equal the wealth of whites.” The following is an example of why this inequality persists.

Fueled by decades of redlining that has been enforced by racially based covenants and exclusionary zoning, California’s climate change regulators, under the pretense of “saving the environment,” are implementing a new version of redlining through unjust interpretations and distortions of the California Environmental Quality Act (CEQA) of 1970. In a research brief entitled “California, Greenhouse Gas Regulation, and Climate Change,” David Friedman and Jennifer Hernandez, land use and environment attorneys with Holland & Knight LLC, explained the use and abuse of CEQA and its negative impact on housing: 

 CEQA allows anyone—even anonymous entities, such as business competitors and labor unions seeking to advance non-environmental objectives—to file lawsuits alleging inadequate environmental evaluation of any type of project requiring any discretionary approval from any state, regional or local agency…The top targets of CEQA lawsuits statewide are housing projects in California communities…The delays and uncertainties caused by CEQA lawsuits against environmentally benign or even beneficial projects typically disqualify projects from receiving construction loans or government funding. While there have been repeated calls to end the abuse of CEQA lawsuits for non-environmental purposes, CEQA reform faces fierce opposition from entrenched special interests including California’s environmental advocacy groups and some unions such as the Building Trades Council. 

The Two Hundred, a multiracial civil rights minority-led advocacy group, supports California’s commitment to be a global leader on climate change, but it believes minority communities should not become collateral damage in the state’s war on climate change. For this reason, The Two Hundred seeks to persuade the California Air Resources Board (CARB) and other state climate leaders to avoid exacerbating California’s housing and poverty crisis and instead to align climate change priorities with civil rights, public health, environmental protection, and consumer protection laws. After CARB’s refusal to negotiate a resolution, The Two Hundred’s advocacy effort has continued, with a civil rights lawsuit against CARB’s 2017 Scoping Plan that challenges CARB’s expansion of CEQA to further increase the litigation risks and costs of new housing as well as of electricity and transportation fuels, all of which disparately harm California minorities already burdened by the state’s acute housing and poverty crisis. 

Challenging entrenched bureaucracies requires perseverance, especially when well-funded, environmental elitist special interest groups, devoid of meaningful representation of persons of color on their staffs and governing boards, continue to enjoy robust support from charitable foundations. One of their own leaders, the immediate past president of the Sierra Club board of directors and the club’s first African American president, Alan Mair, stated, “White privilege and racism within the broader environmental movement is existent and pervasive.”

A recent announcement by the Sierra Clubs executive director, Michael Brune, notes the naming of the first Latino in its 128-year history to lead its board of directors. 

Mary Creasman, CEO of the California League of Conservation Voters, in a recent call to action, pointed out that

The origins of the white-led environmental movement left little room for people of color in leadership positions (as recently as 2014, fully 89% of leadership positions in environmental organizations were held by white folks), which in turn perpetuated institutional racism and created massive blind spots for the environmental movement.

To this I add attorney Jennifer Hernandez’s statement that “Racism must be rooted out, even if camouflaged in green rhetoric and ideology.” 

The problem behind this inequity lies mainly with the foundations themselves. They frequently operate within a constricted compass, promulgating social programs that favor the status quo and continue funding white-led organizations without raising affirmative action questions regarding gender and composition in the leadership of potential and funded grantees. The result is the exclusion of minorities in foundation-funded environmental groups, think tanks, and other organizations that influence, monitor, frame, speak to, and influence critical policies affecting important aspects of American life.

 Bishop Robert McElroy, San Diego Diocese, astutely notes that “ Attacks upon solidarity do not merely place people on the margins of society and Church, they exclude them entirely from meaningful participation.” 

One measure for increasing foundation responsiveness is the impact that foundations might achieve external to their own organizations through grant-making guidelines promoting greater diversity and pluralism in actual and potential grantees by instituting an external affirmative action policy. Such a policy would describe the foundations’ expectations that grantee organizations demonstrate diversity within their boards and staffs, and explicitly address civil rights and equity in grant proposals and reports. In such instances, foundations may ask these applicants or grantees to inform the foundation of their efforts, supported, as appropriate, with data on the gender and minority composition of the leadership of the institution.

John Nason, in his book Trustees and the Future of Foundations, made a strong case for greater balance in terms of race, gender, and age in the composition of boards. He argued that “differences in viewpoint, properly presented, considered, and synthesized, can lead to wider choices.” Such diversity, Nason argued, should make foundations more accessible to the general public and less vulnerable to charges of elitism. Without encouraging the increased diversity of boards and staffs of the programs they fund, foundations will continue to be seen as stragglers, not forerunners, in acknowledging and furthering the dignity and worth of all people in American society.

Ever since Nason wrote his far-sighted comments in 1977,  a growing number of advocacy nonprofits now exist to challenge the status quo and push foundations towards needed reforms.  Here are several examples: 

 Hispanics in Philanthropy (HIP) is a transnational fundraising and grant making  organization that seeks to strengthen Latino leadership and voice through a network of more than 600 funders, nonprofits and community leaders. HIP’s PowerUp Fund (https://powerupfund.org) is working to balance the scales of economic justice and ensure that Latinos have equal access to opportunity.

For more than 40 years, the National Committee for Responsive Philanthropy (NCRP), has pushed philanthropy to be more accountable, transparent, and responsive to the needs of communities with the least wealth, opportunity and power. 

In theory, foundations should be among the most flexible and innovative agents in support of positive social change. With some exceptions, foundations remain especially dilatory in support of Latino-led causes. Forty-five years ago, grants in support of Latino causes and Latino-led organizations were few and far between. As the data below indicates, the disparity continues.

In 1975, I directed a study, supported by the National Science Foundation, entitled “U.S. Foundations and Minority Group Interests.” Based on Foundation Center data from 1972 through 1974, the study revealed that Latino-led organizations received 0.8% of all tabulated funds disbursed in 1972–73 by American foundations. During this period, Latinos accounted for 5% of the total population. According to a report commissioned by Hispanics in Philanthropy with CANDID/Foundation Center, philanthropic funding to Latino organizations for 5 years (2013 through 2017),  “hovers at 1.3% even though Latinos comprise 18% (58 million) of the U. S. population.”

A letter dated November 26, 1975, from Robert Goheen, then chair of the Council on Foundations, informed me that the council’s executive committee spent a full half-day discussing the issues raised at the utilization conference held to discuss my research. Bob outlined a number of commitments, including giving prominent attention to having a speaker on diversity at the council’s next annual conference, to develop articles on issues I raised, and to keep in touch with the Donee Group and other advocates such as Black Foundation Executives. The Goheen letter also clarified the role the Council could play in affecting foundation behavior:

As you know, our membership encompasses enormous variation, and their lines of connection to us tend to be informal and loose. Thus our powers are those of education, persuasion and exhortation, not fiat or binding authority. Moreover, we must often substitute patience and gentle prodding for moral fervor simply to stay in touch with those we hope to move eventually to higher standards of performance.

I trust Bob Goheen meant well, but after 45 years, other measures of foundation responsiveness remain inadequate and lack “higher standards of performance.”

Today, About 2% of private foundation CEOs are of Latino heritage.  According to an opinion article in the Chronicle of Philanthropy by Rodney Foxworth and Antony Bugg-Levine, “data shows 76% of full-time staff members and 88% of foundation executives are white.” The authors also commented that “inequality is clearly baked into philanthropic norms.”

Unless there is better data to show otherwise, Latino inclusion on philanthropic boards has been slow to improve.  A 2015 HIP report on “Latino Leadership: Foundation Boards” cites 2009 foundation data “that Latinos accounted for 4 percent of foundation boards, up from 3 percent in 2000. 

It is noteworthy that as early as 1970, The Commission on Foundations and Private Philanthropy (The Peterson Commission), “encouraged diversity within foundation boards to promote varied perspectives and insights when seeking solutions.”  Is the problem  benign neglect, structural racism, or white privilege? Given these circumstances, it is not surprising that foundations would have a history of ignoring Latino and people of color.

Although larger, well-established Latino groups have gained better access, small and medium-sized organizations engaged in social change struggle to get foundation grants. One reason is access—72% of foundations do not accept unsolicited proposals from nonprofits. Smaller foundations may attribute such a policy to an absence of staffing; a belief that publicity would bring an unmanageable flood of applications, and perhaps for some, an intrusion into the prerogatives of “private” property.”

According to the Castellano Family Foundation’s research and listening sessions  with grantees, “Latinx nonprofits in particular report feeling under-valued by philanthropy, over-taxed by the demand for their services to their communities in need, and largely invisible and irrelevant when it comes to new wealth donors.” Technical assistance for excluded groups is especially important in light of a pervasive feeling that personal contacts are the most important determinants of grantsmanship success.

Pablo Eisenberg, former Executive Director, Common Cause, one of the  more astute and courageous advocates for making philanthropy more open, more accessible, and accountable,  suggests one reason foundations behave the way they do is that with few exceptions,  nonprofits, “are afraid to forcefully state their real needs, or to insist on fair treatment by their potential supporters.” The reality is most foundations expect nonprofits to tailor their approaches and activities to inflexible structures and priorities, no matter how irrelevant or inappropriate they be. Anecdotal evidence suggests if too assertive,  grant makers may label  the nonprofit as “contentious, ” or “too militant” to deal with, however,  the importance for persons of color of disseminating programmatic and procedural information (access) on foundations cannot be overstated.

One structural alternative that could enhance the philanthropic arena and responsiveness to Latino and other communities of color would be to adopt a system of community ascertainment, much like the former ascertainment process once required by the Federal Communications Commission for broadcast license applicants, in a format requiring applicants “to dig beneath the surfaces of majority opinion and conventional wisdom to discover and deal with needs that might not otherwise be exposed.” 

A defense of the feasibility of a system of community ascertainment is not included in this paper, but I suggest that former requirements made by federal government upon holders and applicants of broadcast licenses be considered in addition to the present personalized system in which priorities are set by boards on the recommendations of program staff and often on the basis of recondite or nonexistent rationales. The purpose here is not to strain an analogy, but to accommodate portions of the rationale and some of the techniques of ascertainment which seem applicable to foundations.

Most foundations are loath to provide transparency about the types of grants and dollars allocated to minority-led nonprofits. A recent, rare exception was the announcement by Bob Ross, CEO of the California Endowment, committing “to improve tracking reporting and transparency of our funding to communities of color-led and Black-led organizations, with complete public reporting by October 1, 2020.” This indeed is courageous grant making and reflects one kind of transformational reform needed by foundations.

 As an alternative, here is an example of how legislative power has attempted to deal with this issue. On February 15, 2017, California State Assembly Bill 624 was introduced in the legislature, requiring foundation transparency on data about the diversity of foundation boards and grants to minority-led nonprofits. After intense negotiations between the bill’s author, then member of the California State Assembly, the Honorable Joe Coto, and a coterie of foundation representatives, the proposed legislation was withdrawn when a compromise was reached to allocate a one-time $32 million grant in foundation dollars to minority-led nonprofits. 

I do not favor a legislative solution to this problem but urge careful consideration to this cautionary perspective presented by Paul Ylvisaker in 1976:

Among those of us who feel minority concerns, there is a tendency to threaten philanthropy when it is slow to respond by saying, ”Shape up or we’ll sic government on you.” I believe that minority causes are the natural and appropriate agenda of philanthropy and ought to be explicitly so declared. But we’ll have to think twice about using government as a club, because government is run under democratic rules {that} make it basically a friend of the majority; and by definition, that majority would rather ignore those concerns than activate them. Which is not an argument against using government as a prod–but {it should be used} as a caution. 

 Ylvisaker, Paul, “the filer Commission in Perspective.”  Address before the Council on Foundations, Atlanta, Georgia, May 11, 1976. P.290.

The question remains: how much longer before voluntary action and transformational change is taken by foundations to speed the participation of Latinos and people of color into the life stream of the community?  Without action, the Latino community and communities of color will continue to be left behind and  in so doing, will hinder the social, political, and economic regeneration of American society. This is about making meaningful room for intellectual diversity, ending a form of intellectual apartheid, and helping foundations make better decisions to solve society’s ills, and furthering the promise of a multiracial and multiethnic nation based on mutual respect and understanding but one not entirely dominated by white terms. Any consideration by foundations to address this issue of diversity  and equity will surely require what Benedictine Sister Joan Chittister entreated in the title of her book, “The Time is Now: A Call  to Uncommon Courage.”

I do not dispute that private philanthropy serves a variety of expressed needs in a commendable and inimitable fashion: The core of my position is that foundations have not sufficiently provided for the needs and of the Latino community. The question is one of relevancy and of allocation of resources. In the face of pervasive problems facing Latinos and people of color by the coronavirus, impacts on the economy and  racism, what significant contributions are foundations uniquely equipped to offer American society which justify their protected existence, i. e., how do they relate to today’s society? Given current democratic mechanisms to distribute funds in the “public interest,” how are foundations, which have an essentially elitist mechanism for accumulating and distributing tax-protected  funds for the “collective good,” made legitimate?

Foundations must look inward and align their priorities to today’s realities and move away from the perception that they are agents of continuity by preferring grants to low-risk, familiar programs that preserve the status quo while giving fewer grants to programs that seek institutional change, challenge accepted mores, and correlate with the needs of disadvantaged groups.

The nation’s ongoing struggle to become a more just and equitable society will surely test philanthropy’s place in handling concerns about racism. Pleas in defense of human rights and democracy in society must apply to the foundations themselves. Support for Latino concerns is long overdue. Maximizing the internal resources and organizational capability of Latino-led organizations and people of color seems very much in keeping with philanthropy’s noble desire to bring about meaningful action and the capacity to act as a powerful catalyst for positive social change in American society.  As Latinos, we must ask, when will we finally see ourselves in a mirror of equity and justice?

About Herman Gallegos

Over a period of six decades, Herman Gallegos served as a trustee on such preeminent philanthropic boards as the Rosenberg Foundation, the Rockefeller Foundation, the San Francisco Foundation,  the California Endowment, and  as an outside director on several publicly traded corporations. He coauthored several books about Latinos and foundations and had  the privilege of working with such inspiring and visionary foundation executives as Paul Ylvisaker, Ruth Clouse Chance, John Gardner and Dr. Robert Ross. 

In 1965, Paul Ylvisaker, then national affairs director, the Ford Foundation, opened the door of support from the Ford Foundation. This led to support from other foundations as well.  Ruth Clouse Chance, the Rosenberg Foundation was among the first supporters of Mexican American programs in California and by enabl,ing  Herman’s election as a trustee to Rosenberg, he become one of the first Latinos to serve nationally on a foundation board.  Serving as a member of Common Cause and  board member, the Independent Sector with John Gardner gave new meaning to the ideal of citizen activism, public service, and effective leadership. As a founding trustee, serving with the California Endowment’s CEO, Dr. Robert Ross,  Herman was a part of a unique and enduring model showing how during periods of great ferment and complexity, philanthropy can effectively advance multi-racial community progress while working closely with vulnerable populations left behind because of racism and exclusion. He is a cofounder, Hispanics in Philanthropy and UnidosUS.

Endnotes

 Renato Rosaldo, Culture and Truth: The Remaking of Social Analysis (Beacon Press, 1989 Preface).

Somos Latinos and We Demand that Black Lives Matter.  Somos for Black Lives. See https://www.somosforblacklives.com

 Jennifer Medina, “As U.S. Confronts Anti-Black Racism, Latinos Wonder Where They Fit In.” New York Times, July 3, 2020.

 Simon Romero, Giulia McDonnell, Nieto del Rio, and Nicholas Burroughs-Boglel, “‘Another Video, Another Death’: Tucson Latinos Aren’t Surprised,” New York Times, p. A-1.

 Janet Murguia, “Latino and Black Americans Are Allies in the Fight for Racial Justice,” Opinion Contributor, The Hill, July 13, 2020.

 “Victims of Anti-Latino Hate Crimes Soar in U.S.: FBI Report,” Reuters, November 12, 2019.

 Araceli Cruz, “Hate Crime against Latinos Have Increased in California Since Trump’s Election.” mitú, June 16, 2020.

 Hollie Silverman.  CDC’s Morbitity and Mortality Weekly Report. https://www.cnn.com/2020/06/politics/cdc-coronavirus-demographics-report/index.html. CNN August 23, 2020 pp1-2

 Robert Oppel Jr., Rebecca K.K. Lai, Will Wright, and Mitch Smith, “Racial Disparity in Cases Stretches All Across Board.” New York Times, July 6, 2020, p. A-l.

 “Aid Prevented Spike in Poverty But 2 Million Face a Crisis If It Expires.” New York Times, June 22, 2020, p. B-4.

 Lauren Leatherby, “Black Business Owners Are Hit Hard by Virus.” New York Times, June 19, 2020, p. B-4.

 David Friedman and Jennifer L. Hernandez, California Green Gas Regulation and Climate Change, Center for Demographics & Policy (Chapman University Press, 2018); Jennifer L Hernandez, “California Environmental Quality Act Lawsuits and California’s Housing Crisis,” Hastings Environmental Law Journal Winter (2018).

 Susanne Rust, Bettina Boxall, and Rosanna Xia, “Sierra Club Calls Out the Racism of Founder John Muir, Los Angeles Times, July 26, 2020. p. 3.

 Jennifer L. Hernandez, “Memorandum of Points and Authorities in Support of Motion for Preliminary Injunction CIV-DS 1938432,” December 19, 2020, p. 15.

 Robert W. McElroy, “Homily for Ordination of Aux. Bishop Bejarano,” The Southern Cross, Diocese of San Diego, July 23, 2020, p.6.

 John W. Nason, Trustees and the Future of Foundations (New York: 1977), p. 2.

 U.S. Human Resources Corporation, “U.S. Foundations and Minority Group Interests, A National Science Foundation Study,” Mexican American Cultural Center (1975). p.12

 Seema Shah. Foundation Funding for Hispanics/Latinos in the United States and for Latin America.  The Foundation Center with Collaboration with Hispanics in Philanthropy.  foundationcenter.org/gain knowledge/research/pdf/fc hip2011.pdf or at hiponline.org

 Goheen, Robert F. Letter to Herman Gallegos. Council on Foundations, Inc.  New York, November 26, 1975

 Castellano Family Foundation, “Blueprint for Change, 2020,” http://castellano-for,org/blueprint/.

 Rodney Foxworth and Antony Bugg-Levine, “Opinion,” Chronicle on Philanthropy, June 29, 2020.

  Seema, Shah and Grace Sato, “Latino Leadership: Foundation Boards.” Foundation Center and Hispanics inPhilanthropy, New York. Fall 2015.p.ii. 

  The Commission on Foundations and Private Philanthropy.  www.learningtogive.org/resources/commissions—foundations—and private philanthropy.  Grand Haven, MI 2020. p. 3. 

 Castellano, op. cit. p. 7. 

 Pablo Eisenberg, Challenges for Nonprofits and Philanthropy (Tufts University Press: Medford, Massachusetts, 2005), p. 9.

 “Federal Communications Commission—Community Problems; Ascertainment by Broadcast Applicants,” Federal Register 40, no. 98, part II (May 20, 1975),  p. 22101.

 Dr. Robert Ross, “Grief. Rage. Outrage. Frustration. Hurt,” California Endowment, Yahoo email, June 2020.

 Ylvisaker, Paul, “the filer Commission in Perspective.”  Address before the Council on Foundations, Atlanta, Georgia, May 11, 1976. P.290.

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