A new collective will take a “place-based approach” to creating economic equity for low-wage workers through structural and systemic change in 10 locations across the US.
The Rockefeller Foundation has pledged $10m to promote inclusive growth in 10 US cities in the post-pandemic recovery and over the long term via a new collective.
The Rockefeller Foundation Opportunity Collective (ROC) will take a “place-based approach” to creating economic equity for low-wage workers through structural and systemic change in 10 places across the US, explained Otis Rolley III, senior vice president of the US Equity and Economic Opportunity Initiative at The Rockefeller Foundation
The collective will include Atlanta, Boston, Chicago, El Paso, Miami Dade County, Houston, Louisville, Newark, Norfolk, and Oakland.
The initial $10m pledged by the foundation, will be allocated to government, business, faith-based and non-profit partners in these locations over several years.
It aims to catalyse public and private sector investment and will support partners, projects, and programmes with two core goals: protecting communities from displacement, and eliminating barriers to access capital and credit among low-wage workers and small businesses operated by women, black and Latinx owners.
“Black and Latinx small business owners receive only pennies out of every dollar the federal government lends to small businesses, and when life expectancy is more than 15 years lower in minority neighbourhoods than wealthier neighbourhoods in the same city, the American Dream is just that: a dream for far too many,” said Dr Rajiv Shah, president of The Rockefeller Foundation.
“We need to move to a new paradigm of community development; we need a new era of community wealth building”
He continued: “Now is the time to target resources and spur greater investment in order to widen and fortify the pathway for economic mobility and stability in our communities.”
Rolley added that the disproportionate economic toll on communities of colour has historically stymied access to opportunity and been exacerbated by the Covid-19 pandemic.
“It’s going to take a collective effort by local government and non-profits and businesses to meet the moment and undo the racist economic inequities that have plagued these communities for decades,” he said.
Negative or non-existent credit information, cash constraints, and lack of availability of private capital and access to affordable financing are all components that limit a community’s economic development. These conditions also cause lost job opportunities, restrict housing options, and ultimately limit the goals of many low and middle income families.
An estimated 26.5 million US adults are not in the formal credit economy. Federal data shows that 15 per cent of black and Hispanic Americans are credit invisible (compared to just 8 per cent of white and Asian Americans). In the US, black and Hispanic businesses receive only 2.5 per cent and 5.8 per cent of funding through the Small Business Administration.
To expand access to capital and credit, The Rockefeller Foundation Opportunity Collective will focus on efforts including loans and equity for people of colour and women led businesses, credit-building tools for small businesses, affordable borrowing for entrepreneurs, and capacity building, among others.
The $10m commitment behind The Rockefeller Foundation Opportunity Collective is part of the Foundation’s comprehensive $65m investment announced in February to help more than 10 million low-wage workers and their families across the US meet their basic needs and pursue a more prosperous future.
“Now is the time to target resources and spur greater investment in order to widen and fortify the pathway for economic mobility and stability in our communities”
“We need to move to a new paradigm of community development; we need a new era of community wealth building,” added Louisville mayor Greg Fischer. “Minority residents and businesses in too many American cities have been deliberately left behind and ravaged by years of persistent and systemic racism. It is time to do better and step up to invest. We all need to do more – as government, as business, as individuals, and through philanthropy.
“I thank The Rockefeller Foundation for this investment and recognising not only the work we have done but the important work ahead.”
Chicago mayor Lori Lightfoot applauded The Rockefeller Foundation for an important and innovative pledge to our nation’s cities and urban centres during this most critical time. “By drawing on the comprehensive resources of our communities, this visionary programme will not only provide critical support to our neighbourhoods devastated by the Covid-19 crisis, it will also help address the deeper, generational fissures of inequality across our cities,” she said.
She added: “In addition to its own success, my hope is that the ROC will serve as a model for how we can come together to heal the pain that exists in our cities and bring historic systems of racism and injustice to an end once and for all.”
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