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Evaluation of Ford’s Racial Wealth Gap Work

The challenge

In the United States, there is a stark wealth gap between Black and white Americans. While racial wealth disparities are often considered in conversations about economic inequality, approaches to addressing this gap tend to center on income inequality and issues of wages and work. In the 1990s, rigorous scholarly research, such as Michael Sherraden’s Assets and the Poor (1991) and Melvin Oliver and Thomas Shapiro’s Black Wealth/White Wealth (1995), underscored the powerful consequences of lacking wealth, as opposed to merely lacking income.

Despite some progress in the late 90s and early 2000s, the 2008 financial crisis and its aftermath further deepened the racial wealth gap. By 2013, white households had a median net worth 13 times that of black households, according to Pew Research Center analysis.

What we did

From 1997-2015, Ford invested $XX to support work on asset building and addressing the racial wealth gap. Ford’s work in this time centered on four main components:

  • Programs that promote saving over a lifetime for asset accumulation and poverty reduction, such as child savings accounts (CSAs) and private retirement plans for American workers
  • Public policies that facilitate asset building and debt reduction among low-income families
  • Research, innovative practice, and policy analysis as essential inputs for effective policy
  • Building a pipeline of scholars and practitioners who reflect the target population.

What we learned

  1. We need to focus on unequal wealth, not just incomes, and seek structural change. Although increasing wages and making work safer and more secure are critically important to improving economic security for all communities, especially for communities of color, Ford-funded research has demonstrated that doing so will not necessarily address the underlying factors driving racial inequity and will not substantially move the needle on the racial wealth gap.
  2. Supporting scholars and practitioners of color has helped spread awareness and clarify the systemic problems driving the racial wealth gap. By engaging people closest to the problem in developing solutions, the foundation funded the creation of a network of experts of color focused on documenting, analyzing, and developing proposals for scalable solutions.
  3. Making big bets on promising policy solutions, like “baby bonds” and other kinds of child savings accounts (CSAs) and access to affordable homeownership, is smart practice for philanthropy.
  4. Some popular and tested approaches, such as promoting individual savings, do not do nearly enough to close the gap.Research that demonstrated how structural and historical drivers were responsible for racial wealth disparities showed that the minimal savings that poor and low-income families could accumulate would not enable them to build a financial cushion sufficient to waistband the wealth-stripping mechanisms exacerbated by a skewed economy.

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