Progress Toward Bridging Racial Equity Gap Has Occurred, But More Needs To Be Done

l to r:  Dan Schulman, President and CEO of PayPal, Robert F. Smith, Founder, Chairman and CEO of Vista Equity Partners and Rich Lesser, Global Chair of Boston Consulting Group (BCG)

After the killings of George Floyd, Breonna Taylor, Ahmaud Arbery, and other people of color, racial equity and systemic failures became major topics of conversation in homes, the halls of Congress, and corporate boardrooms. Corporate and philanthropic organizations have since announced nearly $100 billion in racial equity commitments, and research reveals that greater equity could translate into $22.9 trillion in economic gains over 30 years.

Today, the structural underpinnings of economic inequity remain intact, and approximately half of the announced commitments remain unspent. There are many reasons for this. In some cases, organizations have struggled to determine how to best deploy their money given the size and scope of the problems, and their lack of connectivity into local organizations; or have not fully adapted internal processes to integrate diverse suppliers and partners into their businesses. Conversely, many nonprofits and grassroots organizations have challenges in navigating the vast and opaque network of available resources or making the right connections.

We have an opportunity to deploy the balance of these commitments in ways that permanently transform and uplift our country, by focusing on six communities that are home to the majority of African Americans: Atlanta, Birmingham, Charlotte, Greater New Orleans, Houston, and Memphis. We believe that investing $2 to $2.5 billion across all six communities has the potential to generate tens of billions in economic impact. We know what needs to be done, where it needs to be done, and who can work together to get it done. All we need is for corporations and philanthropic organizations to direct the resources that have already been pledged into these communities.

That’s why we established the Southern Communities Initiative (SCI) in April 2021. In partnership with more than 90 organizations and led by financial technology company PayPal, investment firm Vista Equity Partners (Vista), and strategy consulting firm Boston Consulting Group (BCG), SCI aims to address structural racism in these regions by: making it as easy as possible for organizations to invest in communities of color and establishing systems to measure progress and provide transparency to both check-writers and local communities.

In just a year, SCI has been catalytic. For instance, SCI has mobilized partners to fund Grameen America branches to support roughly 9,000 Black women entrepreneurs. In collaboration with the Greater Houston Partnership, SCI has helped build an equity & inclusion dashboard to assess 120 regional organizations and drive transparency in corporate Minority Business Enterprise (MBE) spend. SCI has partnered with Education SuperHighway to drive digital access, affordability and adoption for roughly 13,000 households in Birmingham and Charlotte as a first step. Additionally, in deploying its $535 million commitment to support Black and underrepresented minority businesses and communities, PayPal has connected partners with community banks and credit unions to spur further investments in SCI communities.

The six communities have near ‘shovel-ready’ projects to leverage this $2 to $2.5 billion – a small fraction of the racial equity commitments that remain unspent. For example, SCI is looking for partners to help community development financial institutions (CDFIs) and minority depository institutions (MDIs) modernize their core banking systems and build their capacity, fund the education of over 1,300 STEM students per year forever at minority serving institutions (MSIs) and historically Black colleges and universities (HBCUs), and support community outreach to get more households onto Affordable Connectivity Program (ACP) subsidies and connect low-income households to high-speed internet.

Coretta Scott King wrote: “Struggle is a never-ending process. Freedom is never really won, you earn it and win it in every generation.” It’s important that leaders don’t abandon their pledges just because racial equity is no longer frontpage news. America’s future prosperity and stability depend on unleashing the economic power of every household. Through SCI, we have specific, measurable ways to drive that change, immediately. Join us. You and your organization can help make a huge difference. To learn more or participate, please visit:”


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