We can all agree that financial security and stability are key to achieving dreams we have for ourselves and our families, and that money opens the door to opportunity. But our nation’s vast racial wealth gap and profoundly inequitable financial system limit opportunities for many people of color to achieve their goals and realize those dreams. During my career as an investor, I’ve worked to tackle that by investing strategically so we all have an opportunity to become our most prosperous, healthy, and powerful selves.
In 2009, I moved to Chicago to begin a career in finance. As an investment banker, I saw how money moved and how ideas and companies were financed. I also recognized how financial knowledge and access to financial backing weren’t available to many, regardless of ambition.
On weekends, I volunteered at a faith-based nonprofit with a history of transformational community development on Chicago’s West Side, a largely Black and Latino community. I was particularly drawn to helping revive the nonprofit’s initiative to match individuals’ monthly savings that would be used toward buying a first home, paying for higher education, or starting a business. I called participants and encouraged them to maintain their savings activity. In turn, they shared their dreams of what the money would make possible—a formerly incarcerated person hoped to launch a food vendor business; and a working mother dreamed of becoming the first person in her family to take a college course.
Blending professional expertise with personal values
Despite the hard work, desires, and sacrifices of people of color, systems and markets across the United States have a long history of counting them out, and too often money fails to reach them. Trying to change that standard drew me to impact investing. I wanted to blend my professional and personal values—to leverage markets to empower those in communities that historically have experienced a lack of investment.
Today, I am honored to invest in resourceful and innovative people and communities. I manage the portion of RWJF’s impact investments specifically designed to bend the arc toward racial equity and build financial security among people of color through creating and preserving their wealth.
Using impact investments to advance health and racial equity
Investments that intentionally prioritize a social mission while also generating financial returns (known as impact investments) aren’t new for RWJF but have become a greater priority, and we are using them in more innovative ways to advance our mission. As part of the Foundation’s shift over the past few years to more explicitly address structural racism—the barriers that create unequal opportunity in the U.S.—we have made a deep, ongoing commitment to use impact investing to address the very real racial wealth gap. We invest in organizations that do this in many ways: expanding homeownership and housing-related wealth, increasing business ownership, and improving job quality in communities of color. And, in turn, research shows greater levels of wealth predict better health outcomes.
We are excited by the first expressions of our deeper commitment to addressing the racial wealth gap. We believe that the following impact investments underscore the need to embrace new approaches to expanding economic opportunity:
- Dearfield Black Wealth Fund/Gary Community Ventures provides down payment assistance for Black homeowners in the Denver metropolitan area. With the goal to inspire similar funds and replicate its model in other cities, Dearfield also hopes to become a national model for how homeownership can address the racial wealth gap in the United States.
- Enterprise Community Partners’ Renters Wealth Creation provides renters in multifamily buildings with housing-based wealth-creation opportunities without the financial risks and upfront costs of homeownership, a first-of-its-kind approach.
- Blackstar Stability Distressed Debt Fund helps families affected by predatory lending, which disproportionately harms families of color, stay in their homes and build home equity by transitioning homeowners to more affordable mortgage payments.
- Apis & Heritage Legacy Fund turns businesses with large workforces of color into employee-owned companies, giving workers a voice and improving their economic wellbeing through increased retirement savings.
Impact investing is another tool, alongside grantmaking, strategic communications, and policy change efforts, that RWJF uses to advance health and racial equity. Our impact investments in racial equity are one of three main areas of our overall Impact Investments work, along with community development and other investments linked to the Foundation’s programs. Across these three areas, we hope to attract $1 billion in investments from other investors over the next five years.
These investments are drawing in more partners, including banks, insurance companies, and other impact investors—which can include fellow foundations. Advancing racial equity requires a multifaceted approach, raising the importance for us to collaborate and invest with others to maximize collective impact. By investing in the part of the deal that's perceived as the financially riskiest, RWJF can make other investors feel more comfortable coming to the table.
Investments in the economic security of communities of color are smart investments, and we hope that by showing the business case along with the moral imperative, our involvement will attract more investors so that, together, we can make an even greater, meaningful impact in advancing health and wellbeing for all.
