Two Twin Cities-based initiatives aimed at closing the stark wealth gap between Blacks and whites have announced major expansions.

GroundBreak, a coalition of 40 philanthropic, private and public institutions located throughout the metro, announced it has amassed nearly $1 billion toward wealth-building initiatives, with a focus on creating more Black homeowners, entrepreneurs and commercial developers. The funding is the first step toward a goal of putting $5.3 billion into similar efforts over the next decade.

The coalition, which launched in May 2022 with strong backing from the McKnight Foundation and the banking community, released a report Tuesday outlining its initial progress, including amassing $927 million for financial tools and products that are expected to be available by the end of 2024. A key strategy is to work with existing banks on financial products targeting Black homebuyers and entrepreneurs.

The challenge is that Minnesota ranks sixth worst in the nation in terms of racial income inequality, according to GroundBreak, with white middle-class Minnesotans earning approximately $46,500 more per year than Black households in the same income percentile.

After the May 2020 murder of George Floyd, a Black man, while in police custody in Minneapolis, McKnight President Tanya Allen discussed how to improve the financial landscape for Black families in the area with longtime contacts such as Darrel German, regional president for Huntington Bank Minnesota.

“Post George Floyd, a number of companies were making some serious commitments, but when we were talking to people who were supposed to receive those commitments, they really weren’t feeling it at the impact point,” said German, in a brief interview Thursday. “Tanya pulled together some leaders so we could make some changes.”

“We want to affect those areas that were underserved for a number of years, so people who could otherwise not access capital now can,” German added. “It’s loans, it’s grants, it’s accessing numerous capital stacks. … We have a banker call once a month, and we’re on the phone crafting out how we can assist with our various institutions, but in a galvanized way.”

To reduce wealth disparities, the state of Minnesota has committed $175 million in state funding for first-generation homebuyers. Additional institutions making early financial commitments include Bremer Bank, the Bush Foundation, the GHR Foundation, Huntington Bank, M.A. Mortenson Cos. Inc., Margaret A. Cargill Philanthropies, McKnight Foundation, the Pohlad Family Foundation, Securian Financial and U.S. Bank.

GroundBreak’s next phase is focused on rolling out ways that capital can be distributed through existing nonprofit organizations, banks and community development institutions. The goal is to have new financial tools deployed by the end of next year.

Other efforts

Separately, the Center for Economic Inclusion, a St. Paul-based research, advocacy and consulting agency, announced this week it plans to bring its own job creation and wealth-building strategies to bear outside Minnesota through partnerships with nine regional business organizations in Alabama, Iowa, Kansas, Louisiana, Missouri, Ohio, and Virginia. The center’s racial equity and inclusive economic growth consultancy will work with employers and local governments in each of those markets to better incorporate people of color into their economies.

The nine partners, selected through a request for proposals, include chambers of commerce in Akron and Cincinnati, Ohio, the United Way of Central Iowa and the Greater Des Moines Partnership, the Urban League of Louisiana and other organizations. The goal is to use many of the same data-driven tools that have rolled out in Minnesota since the center’s founding in 2017, including a suite of analytical tools intended to provide businesses and government with measurable indicators of racial equity and inclusion, from analysis of their workforce and supply chains to philanthropic giving.

The Racial Equity Dividends Index measures 45 to 70 indicators, said Tawanna Black, the center’s founding chief executive officer, in an interview. Among its benchmarks, she said, “Does your leadership team represent the racial diversity of the market? Do you hold your teams accountable? Is it place-based? In your own local community, are you spending with Black and Brown entrepreneurs and allowing people to grow?”

Through the on-the-ground partnerships, the center hopes to have monthly check-ins with business and government leaders throughout each region.

In a written announcement, officials said they expect to serve more than 160 employers and equip more than 10,000 people to take “anti-racist actions to deepen the inclusivity and racial diversity of their workplaces and increase their capacity to build shared prosperity and inclusive economic growth.” The center’s expansion in northeast Ohio is backed by a $1 million grant from Google. Another $600,000 grant from the Robert Wood Johnson Foundation will support a partnership with the Brookings Institution to offer the center’s Racial Equity Dividends Index in eight mid-sized regions across the country.

Related Articles

Homeless man taken in by elderly Iron Range couple is charged with fatally beating them

Minnesota appeals court protects felon voting rights after finding a lower court judge overstepped

Minnesota justices appear skeptical that states should decide Trump’s eligibility for the ballot

Flurry of last-minute submissions boosts entry pool for new Minnesota state flag/seal to 2,633

Minnesota DNR approves Twin Metals plan for mineral exploration in shadow of Boundary Waters