African American Financial Capability Initiative

AAFCI

The Racial Wealth Divide Initiative at Prosperity Now believes the people closest to racial economic inequality are also best positioned to address it. It is estimated that it will take 228 years for Black Americans to reach the level of wealth White households enjoy today. Individual behavior is often seen as the cause of this racialized wage and wealth divide. However, there is compelling evidence that racial economic inequality is primarily the result of long-term investment in some communities and a lack of investment in others. The African American Financial Capability Initiative aims to reverse this trend.

The stark racial economic disparities are a wake-up call to the Northwest Area Foundation and a call for fresh thinking and new investment. In response, the Foundation committed $4.35 million over three years to Black nonprofits in six cities within its footprint and to Prosperity Now to provide technical assistance to the participating organizations. The Initiative brings together six African American communities of practice (CoPs) to collaboratively develop and implement innovative, community-centered financial capability pilot projects. This development model also aims to highlight promising practices that address racial economic inequality developed the communities most impacted. For more information, click here!

Des Moines

The Problem: In Des Moines, data suggest there is a "Tale of Two Cities." One set of data shows the prosperous growth in the city, while the other shows the wide disparities within the African American community.

Why the Problem Exists: This problem exists due to the lack of financial education and resources in the African American community.

CoP Response: Creating a CDFI focused on providing resources and education to the African American community.

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Minneapolis

The Problem: Minneapolis' CoP found significant evidence of wealth disparities ranging from education to homeownership to employment and wealth.

Why the Problem Exists: Lack of safe, affordable banking products and services to give people the chance to build credit or relationships with banks, socially/locally responsible financial institutions, money management conversations early on in African American families and culturally anchored financial institutions in the community. In addition, historical and cultural factors still embedded in policies and systems in the city are root causes of wealth disparities.

CoP Response: Design and implement a robust referral network between participating CoP organizations to increase financial awareness and financial capability among the African American community in North Minneapolis. The three-phase model is a culturally anchored in support services with an emphasis on health, education, employment services and advocacy to support an individuals’ journey to financial well-being (Phase 1 is Employee Referrals; Phase 2 is Client Referrals; Phase 3 is Community Referrals).

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Portland

The Problem: African Americans are disproportionately cost burdened and liquid asset poor compared to other populations in Portland.

Why the Problem Exists: Systemic exclusion from access and opportunity to create wealth and assets.

CoP Response: Exercising our strengths as African American-led organizations by coming together through service and advocacy to address housing stability as a foundation will lead to having greater access and opportunity to increased assets and financial security.

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Seattle

The Problem: Development is driving out the African American community and reducing opportunities for wealth creation among the lower and middle classes.

Why the Problem Exists: As our population grows and greater Seattle continues to urbanize, with a proportional increase in the number of people living within the city, there is an increase in development and redevelopment of existing communities. This development pattern is creating displacement of both land owners and existing tenant residents and businesses.

CoP Response: Land trusts have been proven to work as a mechanism for ownership of land. Seeking to develop a blueprint for how to create an African American Community Land Trust which can be utilized as a portable document to educate and enable other African American communities across the state and nationally to pursue the same mission.

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Tacoma

The Problem: There is a gap that exists between the African American community and the public and private organizations that provide financial resources and services.

Why the Problem Exists: Historical, structural, systemic and institutional racism created the racial wealth divide that is perpetuated by policy and practice rooted in narrative and beliefs on either side of the gap.

CoP Response: Working to close the gap by using a Community Based Participatory Action Research (CBPAR) approach to increase understanding of community experiences, beliefs, and practices by activating social capital, knowledge, and expertise that will inform and change systems and products within the social and financial services industry.

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Twin Cities

The Problem: Substantial wealth disparities exist in the Twin City African American community.

Why the Problem Exists: Homeownership is the primary wealth-creation asset, and Minneapolis and St. Paul have the highest homeownership disparities in the country.

CoP Response: CoP members are engaged in financial education, homeownership and business development. The pilot project is designed to create a "One Door" client support system.

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