By Pamela J. Oakes
As a nonprofit fund development consultant, it is my job to keep my mind on the money and the money on my mind! To best serve my clients, my eyes are keenly focused on pools of wealth; how to find it, how to attract it, and how to access it. In the midst of helping clients pivot and reimagine funding in the wake of COVID19, I’ve become keenly aware of the looming financial devastation this pandemic is about to exact from African-American communities!
Let’s recap. By the official end of the Great Recession in 2009, the median net worth for African-Americans had fallen to a mere $5,677. By comparison, the net worth for Whites was $113,149. That’s a $100,000+ wealth gap! The toll of the Great Recession on African-Americans was to basically wipe out an entire generation’s worth of hard work and progress! Remember, that was barely 10 years ago and in case you were wondering – NO, that wealth loss has never been recouped! In her article for the Center for American Progress, Danyelle Solomon notes that a 2016 review of Black wealth reflected that the median was only about half of what it was right before the Great Recession whereas the median White wealth in 2016 had GROWN by almost 15%!
It should come as no surprise that a recession only exacerbates the already vicious patterns of low wealth for Black families. Yet, in an unprecedented twist of fate, never before seen in history, while we are still reeling from the economic losses of last decade’s Great Recession…here we go AGAIN! According to researchers at Brandeis University, it was estimated that half the collective wealth of African-Americans was stripped away during the Great Recession. Where do we expect to be by the end of 2020? Or 2021?
COVID19 spotlights the harm that unequal distributions of wealth have on Black and Brown communities. It is also crucial to recognize that the lack of wealth in these communities is not due to individual choices but rather 400 years of collective federal, state, and municipal harms compounded over time. It is wealth – especially wealth liquidity (resources that can be quickly converted to cash) – that provides security and allows people to handle unexpected health, financial and life emergencies (like losing your job & benefits to a national pandemic!) Unfortunately, those who are most likely to suffer the impact of this crisis will be disproportionately non-white.
Of course, I am all for policy recommendations like:
• Ensuring access to affordable or no-cost medical care
• Ensuring paid sick, family, and medical leaves are available to all workers
• Sending cash directly to households
• Increasing access to capital for minority businesses
• Taking comprehensive action on student loan debt
• Temporarily waiving late payments for credit card and auto loan payments
• Placing a moratorium on housing evictions and home foreclosures
But, if history is any indication, Black people can wait a literal lifetime hoping for policy changes to catch up to needs in the Black community. So, let this be your wake-up call! Take your own steps to sock away wealth; Learn how to invest (a bear market means stocks are on sale right now!); Take in a roommate or consider shared housing to cover costs; Eliminate excess spending on cable bills, phones, entertainment; Pump up your emergency fund; Take advantage of low interest rates and refinance to reduce monthly mortgage payments; Focus on your personal economy – spark your entrepreneurial spirit and learn how to generate your own income so you’re not dependent on an employer or in fear of lay-offs.
There is an election coming up on November. Probably the most vital election we’ll see in this lifetime. Use your vote to elect policies and officials that prioritize support for Black homeowners and businesses to ensure African-Americans keep their assets and resources. Let’s use the urgency of the pandemic to build more equitable systems that increase the long-term resilience of African- American communities and institutions.
Pamela J. Oakes, Managing Director of The Profitable Nonprofit, is a funding consultant. She specializes in Nonprofit Fund Development, helping small and emerging nonprofits achieve funding sustainability. She worked for nearly a decade with the Bill & Melinda Gates