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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.

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.

Racial poverty in the United States has existed since the founding of the country, when only white families could legally purchase and own land. However, in the past century, we have seen an accelerated increase in the racial wealth gap due to discriminating laws that prevent families of color from building wealth. Every time there’s an economic crisis, people of color have disproportionately experienced worse outcomes than their white counterparts. This essay explores how major economic events in the modern 20th century have shaped the concentration of racial poverty in the United States.

The United States Second Industrial Revolution marked an insurgent of the increasing wealth gap in the United States. It was a period in which industry and technology exploded around the country, leading to massive growth of cities and factories. The country’s overall economic growth is undeniably one of the most significant moments in history and transformed the lives of millions. The country experienced mass production of steel, railroads, energy and consumer products; and a decline in agriculture farms. With Industrialization came with the rising upper class who controlled the production process and gained enormous wealth. Prominent figures at this time were John D. Rockefeller and Andrew Carnegie, who were the richest men in the world, controlling oil and steel. However, the poorest Americans did not experience the economic growth that the upper and middle class were experiencing. Instead, they were working at manufacturing factories with terrible working conditions, long hours and low pay. The poverty rate was projected to be between 60-70% during this time. “About one-fourth of the population in southern rural areas consisted of poor sharecroppers and tenant farmers. Over a third of these small farmers were African Americans.”

The Great Depression of 1929 was the great equalizer. This period marked the first time that many middle class Americans experienced extreme poverty. With unemployment skyrocketing at 25%, President Franklin Roosevelt implemented the New Deal, a series of programs that aim to restore economic prosperity among Americans. However, one of the agencies established under the New Deal, the Federal Housing Administration (FHA), can be traced back as the main reason why there is concentrated poverty in cities around the country. The Federal Housing Administration was established in 1934 under President Roosevelt; it subsidized mass production of housing in suburban neighborhoods, with the exclusionary clause that stated that none of these houses would be sold to African Americans. In other words, this subsidized middle class white families to move to suburbs while African Americans were not allowed to follow. The FHA’s reasoning was that having African Americans move into the suburbs would lower the property values, making their loans more risky. This has no empirical basis. When the GI Bill was passed to subsidize WWII veterans housing, it adopted the FHA exclusionary law as well, meaning many African American vets did not benefit from this program either. Racial restrictive covenants were another way to exclude American Americans from buying homes. Restrictive covenants were mutual agreement between sellers and buyers that prevent reselling of properties to certain races. On the other hand, minority families in America were offered public housing during the Great New Deal as a well-intended progressive solution to help the working poor. After the passage of the Housing Act of 1937, public housing was built with the goal of helping the unemployed work and to clear slums. However, mismanagement and bad policy decisions have isolated low-income families and further created concentration of poverty. Public housing in America was never implemented properly to help people living in poverty. Often, these units are characterized by “the rats, leaks, mold, and lead paint.” How can one succeed in their education and job when their homes lack the most essential amenities to support them? 

We still see the legacy of these exclusionary practices today. Owning a home is one of the main ways that Americans build equity. During the time when these exclusionary laws were implemented, home prices were twice the national median income, a down payment was affordable for most. However, African Americans were not allowed to buy the homes. After the Fair Housing Act passed, home values increased and they were 5 or 6 times the national median income, making it incredibly unaffordable for many African Americans. While their white counterparts have equity to send their kids to college and to take care of their senior parents, African Americans never had that opportunity to build wealth. While African Americans’ income is 61% of white folks, their wealth is 5% of whites’ wealth. 

After years of being excluded from building wealth, the 2008 Great Recession exposed many families of color were being exploited. Though the mortgage crisis happened in 2008, predatory lending had been going since the 1990s. In a research done by Professor Jacob Faber at NYU, he found that in the period between 2003 and 2006, Black and Latino families received over 20% of subprime loans, with them two times more likely to receive subprime loans than white counterparts. Interestingly enough, banks that once ignored these middle class minorities during the redlining period, provided risky loans to families who never received proper financial education to know what they were signing up for. As a result, Black and Latino families foreclosed their home, lost their wealth and contributed to that growing racial wealth gap. Foreclosure rates in these families of color doubled their white counterparts, with 56% of people who lost their homes were non-Hispanic and white. The mortgage crisis marked an era of continual exploitation of people of color, widening the wealth gap for many generations to come.

Though we have not seen the effects of the 2020 Covid-19 Pandemic on minority families, early findings have shown that COVID-19 has affected economically disadvantaged Black and Latino families more. History of marginalization and discrimination have put these families at higher risk. Black and Latino families have lower median incomes and are more likely to work in service jobs, forcing them to expose themselves to the virus. Adrianne Haggins, MD from University of Michigan stated, “Black Americans experience a disproportionate share of environmental risk factors, and are more likely to have limited economic and educational opportunities, food insecurity and poor access to health care.” With all these socioeconomic factors, it’s not surprising that families of color are experiencing higher rates of infection. The Payment Protection Program that was supposed to help small businesses and their employees, only 1 in 10 nonwhite businesses were able to receive it. Though more research needs to be done in order to determine the effect of the pandemic on the poverty rate of the United States, with our current unemployment rate, it would not be surprising for it to increase even further. 

In the past centuries, every major economic crisis has disproportionately affected people of color more. Our institutions have failed to support them in order to better their quality of life. From downpayment assistance program to proper financial education in our communities, we need to implement programs to further increase the access to wealth and economic opportunities that will help our communities to become more economically resilient in these trying times.

Written by Hang Nguyen

We would like to thank you for your leadership and prompt and decisive action to protect our state and the county of Los Angeles from the COVID-19 pandemic. We applaud you for taking this threat seriously, and taking the necessary actions to prevent its rapid spread thereby reducing the impacts on our healthcare system, economy, and housing that are sure to come. It is in this spirit that we bring to your attention a regulation that we believe will dramatically impact the ability for many Californians, including millennials and communities of color in particular, to purchase a home – Vehicle Miles Traveled (VMT), and respectfully request the extension of the implementation date to July 1st, 2021. 

We have filed a lawsuit against the California Air Resources Board (CARB) because we find many aspects of their scoping plan, including the VMT fee, to be discriminatory against California’s most vulnerable populations. The first lawsuit we filed in April 2018  was due to their efforts to make it easier to block new housing and because of their aims to increase California housing prices. CARB’s anti-housing legislation would have a disproportionate impact on communities of color, as their proposed CEQA scoping plan would add $40,000 or more to the cost of each new house and make commutes longer for people of color who commute to housing that they can afford. CEQA is supposed to protect the environment but these longer commutes will actually increase air pollution by forcing longer commutes. 

We later filed a Civil Rights lawsuit on December 18, 2019 as regulations to implement CEQA are unlawful and unconstitutional; they exacerbate the housing crisis and the poverty and homelessness crisis. Vehicle use is a fundamental civil right and a basic necessity for these Americans who need to commute and it is unconstitutional to take that right away from them without any substantial evidence that these measures will limit greenhouse gases. The Two Hundred filed this lawsuit to advocate for the rights of American citizens to housing and mobility and to call out the unconstitutional restrictions being implemented by CEQA. 

In the middle of an economic and public health crisis, the government should not be imposing new laws that will increase the cost of housing and potentially endanger public health. Forcing residents and their families into expensive high-rise housing and onto crowded buses and trains is bad public policy and needs to be reconsidered. By ignoring the critical role that social distancing has played in slowing the spread of the Coronavirus, Vehicle Miles Traveled does not protect our aging population from future virus pandemics.

The VMT fee has been delayed in many Southern California counties with the exception of LA county and the city of Los Angeles. Given the racial injustice protests, it is particularly disturbing to us that LA county and the city of Los Angeles will not get on board with the delay of the implementation of the VMT fee. 

The ideological approach of VMT is to get people to abandon their individual vehicles and utilize multimodal transit opportunities such as walking, biking, and using public transit. The regulation views road congestion as a good thing, since it slows down traffic and incentivizes individuals to use alternative forms of transit. Improvements like road widening is considered a negative impact on greenhouse gas reductions because it increases commuter speeds which the regulation assumes will encourage people to drive longer distances. The new regulation advocates that California go on a “road diet” and calls into question whether the voters understood this when they approved an increase in the gas tax. Additionally, many residents of Los Angeles do not have adequate access to public transportation from their homes to their jobs. Until the transportation system is improved, it is very unfair to punish those who are already forced to live far from their work to pay extra in the fight against climate change. 

We hope you will support a resolution encouraging a one-year delay so that the numerous problems associated with Vehicle Miles Traveled can be adequately addressed.

These are difficult times for all of us. We appreciate your hard work and your continued efforts to strengthen our economy and protect public health.

Sincerely, 

John Gamboa

Vice Chair

The Two Hundred

To learn more about VMT and why we are suing CARB over it, check out these resources:

https://gvwire.com/2020/06/11/in-suing-california-group-says-law-will-keep-grandparents-from-seeing-grandchildren/  

https://gvwire.com/2020/05/26/fresno-county-board-of-supervisors-vote-5-0-on-resolution-to-delay-vehicle-miles-traveled-law/

https://gvwire.com/2020/04/30/how-much-you-drive-soon-will-dictate-the-price-of-a-new-home/

https://gvwire.com/2020/05/07/latest-state-green-edict-discriminates-against-minorities-lawsuit/

https://gvwire.com/2020/05/22/law-pushed-by-democrats-will-force-you-into-buses-van-pools-and-high-rises/

https://gvwire.com/2020/06/03/in-bi-partisan-fashion-ca-lawmakers-ask-newsom-to-delay-law-targeting-millennials-and-communities-of-color/

https://www.jdsupra.com/legalnews/real-estate-developers-grapple-with-14735/

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