Forging Partnerships to Close the Racial Wealth Gap in Atlanta

By Kaela Hammond and Lauren Thomas Priest, Program Managers, Community Foundation for Greater Atlanta

The racial wealth gap in Atlanta is staggering. For every dollar of wealth held by the average black family in Atlanta, the average white family in Atlanta holds $46. Therefore:

• 45% of black Atlantans have outstanding debt (compared to 21% of white Atlantans).
• 37% of black Atlantans have at least $2,000 in emergency savings (compared to 89% of white Atlantans), and
• Black Atlantans have a median credit score nearly 100 points lower than their white counterparts.

Wealth determines many factors in our lives: where we can afford to live, what school our children go to, our access to health care and healthy food, and our ability to afford unexpected repairs to our car or our house. According to the Bush Foundation, “closing wealth gaps can make a difference in combating virtually all other social and economic disparities.”

The Bridgespan Group recently conducted a study that identified five drivers of the racial wealth gap. These factors are:

• Family heritage
• Adequacy of income and benefits
• Access to property
• Debts, fines and costs
• Entrepreneurship

Due to these factors, the racial wealth gap continues to widen, despite the fact that black wealth in the United States is increasing. Nationally, between 2019 and 2022, the racial wealth gap increase of $49,950. And that number is likely to continue to grow without meaningful intervention. Together with our nonprofit partners and donors, the Community Foundation for Greater Atlanta (Foundation) is addressing each of these factors so that all Atlantans can share in its prosperity.

Family heritage: When children receive an inheritance from family members, they can use the funds to pay for college with less debt, start a business, invest, or buy a home—all wealth-generating activities. Through its Seed Capital for Life program, our partner The GRO Fund is looking to change the wealth trajectory of young people in Atlanta’s predominantly Black communities with a combined guaranteed income and accelerated baby bond pilot program.

Adequacy of income and benefits: Access to quality jobs facilitates wealth creation through income and benefits such as retirement plans and health insurance. Our partner, CareerRise, is working to improve our local workforce development system through its Equity@Work initiative. This initiative focuses on five strategic objectives: developing and advocating policy and practical solutions, developing regional settings to drive continuous improvement, increasing availability and access to high-quality training programs, developing region-specific strategies young people and increase engagement with employers to maximize opportunities. for job seekers and workers.

Access to the property: Homeownership provides access to equity and the opportunity to create generational wealth. But in Atlanta, the homeownership gap between black and white households is more than 26 percent, the highest in more than 50 years. Through Wells Fargo’s WORTH initiative, the Community Foundation and nearly 50 other nonprofit partners are working to close the racial homeownership gap in our region.

Debts, fines and costs: Student debt extracts resources from families that could be used to create wealth. Because of the racial wealth gap, black students are more likely to accumulate student debt to obtain these degrees and diplomas. Black households are more likely than their white counterparts to have unpaid loans, have higher amounts of outstanding student debt, and are more likely to have negative net worth due to their student debt. Through our student debt program, the Foundation repays the student debt of selected residents in our three locations. Essentially a “reverse scholarship program,” residents apply and are selected for assistance based on their financial need.

Entrepreneurship: Nationally, the median net worth of Black business owners is 12 times higher than that of non-business Black owners. However, due to the racial wealth gap and other factors, Black business owners have less access to the capital they need to start and grow their businesses than their white counterparts. Nearly 96% of Black-owned businesses in Atlanta have no paid employees, and Black entrepreneurs are less likely to be able to generate wealth from their businesses than entrepreneurs of other racial and ethnic backgrounds. Our partner, Atlanta Wealth Building Initiative (AWBI), supports Black entrepreneurship and business ownership by establishing strategic partnerships and supporting business support organizations. Since 2018, AWBI has provided more than $2.7 million in strategic partnerships, grants, loans and technical assistance, and leveraged or influenced more than $83 million for community economic development and the small business ecosystem of Atlanta. To support the Community Foundation’s work to end racial wealth in Atlanta, please contact our philanthropy team.

This is sponsored content.

SIMILAR ARTICLES