Philanthropy Is Stepping Up to Advance Reparations and Racial Repair
Abby Schultz, Barron's, December 6, 2023
The Minnesota-based Bush Foundation approved two community trust funds totaling US$100 million in 2021 to issue grants that tackle racial wealth gaps affecting Indigenous and Black communities in its region, including the Dakotas and 23 Native-American nations within those states.
The foundation, which was established by Archibald Bush—an executive at the multinational company that became 3M—and his wife Edyth, created the community funds to address “the result of generations of unjust policies” that have harmed these communities.
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The funds—which are being overseen by community-based groups—represent one way philanthropy can approach reparations, a huge topic that, simply defined, includes restitution and repair, according to research from the Bridgespan Group, a global philanthropic advisory nonprofit, and Liberation Ventures, a field catalyst and intermediary working to accelerate the Black-led movement for racial repair.
In a recent paper, titled “Philanthropy’s Role in Reparations and Building a Culture of Racial Repair,” the nonprofits focus on Blacks in the U.S., but their findings hold parallel lessons for Native Americans and others who have suffered from inequitable U.S. policies. Research for the paper included interviews with more than 45 movement leaders, academics, and funders, and a survey of senior philanthropic leaders.
The “north star” for the reparations movement is federal comprehensive policy that “addresses the legacy of slavery and the centuries of documented race-based policies”—such as Jim Crow laws and redlining that marginalized Black homeowners, according to the report. “Inextricably linked” to creating a federal policy—which report author and Liberation Ventures co-founder Aria Florant says is a 25-year goal—is “building and sustaining a culture of racial repair.”
“When I talk about reparations, I’m talking about both financial and non-financial; I’m talking about holistic repair,” Florant says. A good example of what this looks like is in Germany, where the memory of the Holocaust is built into its culture, she says.
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Philanthropy’s role is not to achieve reparations alone, but it can begin to close the financial and cultural gaps that exist in creating a pathway for reparations to take hold, the authors argue.
A big way is by tackling the estimated US$11.2 trillion wealth gap between Blacks and whites, as the Bush Foundation is aiming to do. Closing the gap will not only support Black communities, it will add an estimated US$1 trillion or more to the U.S. economy, the report said.
To get there means addressing the fact that Blacks aren’t benefiting from the estimated US$84 trillion intergenerational wealth transfer underway between the baby boom generation and their heirs. According to the report, this lack of wealth transfer drives 60% of a US$330 billion annual disparity in wealth flow between white and Black families.
The US$16 trillion expected to be transferred from baby boomers just in the next decade is 43% more than is needed to wipe out the Black-white wealth gap altogether, the report said.
Philanthropy—often funded through intergenerational wealth—is therefore in a good position to turn the tide.
For that to happen, institutional philanthropy, meaning foundations large and small, will first need to “reckon with the history and origin” of their wealth, says Tonyel Edwards, a partner at Bridgespan who co-wrote the research paper.
Many philanthropies already are. Researchers spoke with an individual who went through this process of investigation, and though their family didn’t own slaves, there was the recognition “that they benefited from the policies and practices that have been in place,” Edwards says.
Next, philanthropies should look at “resourcing the reparations ecosystem,” which is underfunded and often relies on volunteers.
