Tag Archives: nonprofit quarterly

This article introduces a new NPQ series titled Community-Driven Philanthropy. In this series, movement leaders explore what’s possible if philanthropy adopts a reparative model—one which supports the leadership of BIPOC communities, not just by writing grants, but by shifting assets and control over resources to frontline communities.

Whatever you think about the growing role of megadonors in the nonprofit field, the sheer size—often equivalent to the total annual revenue of recipients—of the unrestricted grants that donors such as MacKenzie Scott have made to hundreds of nonprofits has injected a new sense of possibility into the field.

Notably, Scott has infused funds into sectors long overlooked or ignored by other philanthropists and foundations. Her approach has benefited from a rigorous selection process informed and strengthened by advisors with ears to the ground—who have relationships with people on the frontlines of social change work—and by an emphasis on investments that reveal and address inequities in the philanthropic field.

While Scott’s moves have been bold, her underlying assets are generating new revenue even faster than she is giving grant dollars away (at least before this year’s stock market downturn). In light of the country’s growing reparations movements, such revenue generation raises a question: what if, instead of giving away cash, donors transferred ownership of their assets to frontline communities?

Some philanthropists have already done just this. In 1984, Chuck Feeney transferred his shares in Duty Free Shoppers to the Atlantic Philanthropies, which was able to deploy over $8 billion to address various pressing social problems sooner rather than later. Earlier this year, Mackenzie Scott donated two of her mansions, together worth $55 million, to the California Community Foundation, supporting the foundation’s efforts to expand affordable housing in Los Angeles and immigration programs. 

For philanthropy to sustainably and forcefully address a growing class and racial wealth divide, such transfers of wealth must become common.

Towards a New Model of Philanthropy

Indeed, a new philanthropic model is required; philanthropy must focus not on the flow of cash, but, instead, on the repatriation of resources back to the working-class and BIPOC communities from which those resources were extracted. Philanthropy must also ensure that those same communities decide how to employ those resources, transferring the latter to BIPOC- and women of color-led organizations that center female, queer, non-binary, and disabled leadership and expertise. In this way, philanthropy would return stolen labor, resources, land, culture, and ideas—in deed, and not just word.

The wealth that underwrites philanthropy was extracted from laborers and communities. It is time to return stewardship of those resources to their rightful owners.

BIPOC leaders—including BIPOC-led organizations and individuals of color—are at the forefront of every major progressive social movement. In 2020, Black and Indigenous women delivered elections in Georgia and Arizona. Indigenous activists are on the frontlines of the climate crisis. Women of color are leading the tech justice movement. The list goes on. To realize their potential, such leaders need, not funder-controlled donations, but wealth that they control.

Will donors and philanthropy listen?

Time for a Change

The civil uprisings that followed the police murder of George Floyd and the health and economic disparities that communities of color faced during the height of the COVID-19 pandemic lifted a veil, revealing long-standing racism and inequality that oppress and weaken communities of color. A power shift is in order, and it must involve a redistribution, or decolonization, of wealth. The wealth that underwrites philanthropy was extracted from laborers, land, and communities. It is time to return this wealth and its stewardship to its rightful owners.

Reallocating assets, which would cede not just money but agency to these communities, would foster a system that is much more responsive to and respectful of those communities’ needs.

This process demands a paradigm shift in philanthropy. Philanthropic leaders and donors must let go of their power. Philanthropists must not simply make investments, but return them, allowing for trust to be built in frontline communities, with no strings attached. Philanthropic funding is not a gift; it is a mode of returning resources to the communities from which they were stolen.

Funders must trust and invest in BIPOC and working-class communities, their leaders and visions, and the solutions those communities proffer. This means trusting communities to experiment—and to sometimes fail. Existing models of philanthropy too often view failure as a waste, rather than part of a necessary learning process. Through experiments—not all of which prove successful—communities achieve critical insights and lay the foundations for lasting change.

Reallocating assets, which would cede not just money, but agency, to these communities, would foster a system that is more responsive to and respectful of those communities’ needs. We’ve already seen a rise of BIPOC funds that amplify the work and impact of organizations that steward these funds, like the NDN Collective and First Peoples Fund.

A move toward asset reallocation re-envisions philanthropy; funders are no longer central players—benefactors to whom communities come for assistance—but rather intermediaries, conduits for the return of assets to communities. This moment of racial reckoning demands such bold action.

An Intersectional Lens: Philanthropy as Reparations

There is an urgent need for an intersectional approach to pressing issues, including climate, racial, economic, and gender justice.

An increasingly brazen network of white supremacist groups and their supporters have embraced ideas such as “replacement theory,” which threaten BIPOC communities. This toxic environment affects the ecosystems that a wide range of BIPOC-led movements must negotiate, whether that be working to build Indigenous power, creating narrative change, or fighting for equality. In all these cases, the work involves seeking reparations for what was stolen.

BIPOC movements today in their actions and the new narratives they are generating are creating a chance to restore balance. We must recognize the connections between culture, politics, and economics and support community leaders who are modeling new ways forward with real and sustainable resources.

A Window of Opportunity

The pandemic made especially clear the stark realities of race, sex, and class disparities across the US and world, and increasingly, the public is understanding the severity and urgency of these compounding inequalities. Thanks to such clarity, we have a window of opportunity to model a new way forward—to explore strategies and approaches that didn’t seem possible before. We must engage this opportunity with urgency while rethinking dominant systems, including our modes of resourcing nonprofits and social change movements.

In this series, we feature five articles from thinkers and doers exploring why donors should consider this new type of philanthropy and what’s possible if they do. You’ll learn about their work, including their community-based solutions and visions for righting historic wrong, addressing persistent inequities, and helping communities—and the nation—heal and become whole.

Authors Aria Florant and Venneikia Williams highlight how philanthropists may reconceive of their role as agents of repair in light of the growing reparations movement in the United States and associated actions by state governments. The authors offer a framework with which funders may approach reckoning, acknowledgement, accountability, and redress: shifting assets and control to those most harmed by the status quo.

Two of the series’ articles focus on the power of transferring land holdings back to communities. The Indigenous-led NDN Collective’s Nick Tilsen and Gaby Strong shine a light on pervasive land theft and how reclaiming land enables Native people to prosper, create regenerative agricultural systems, and foster economic resiliency. Savi Horne of the Land Loss Prevention Project and Dr. Jasmine Ratliff of the National Black Food and Justice Alliance explore how to reverse nearly a century of southern Black farmers’ land loss, the result of discriminatory policies and loan programs, market forces, intimidation, and terrorism. They dig into the benefits of land ownership, including self-determination for Black farmers and agricultural communities, increased capacity to heal from generational trauma, improved health, and the ability to engage in climate change mitigation practices.

Finally, the Pop Culture Collaborative’s Bridgit Everett and Tracy Sykes make the case for prioritizing support for BIPOC-led narrative change work, alongside investments in community organizing and policy advocacy.

Today’s conversations about wealth, gender, and racial inequality have created an opportunity for transformative change.

Collectively, the authors in this series send a clear message to funders: If you want to make a positive impact, transfer assets to BIPOC leaders and communities at the frontlines of the hard, delicate work of creating a more just and healthier country and planet. Reckon with the history of your endowment, the country’s growing racial wealth gap, and the role your organization has played in extracting wealth from communities and perpetuating unjust policies. See yourself as a powerful agent of repair. Act boldly, creatively, and with accountability. And never forget that the need is now.

Today’s conversations about wealth, gender, and racial inequality have created an opportunity for transformative change. What would the world look like if BIPOC communities controlled and leveraged assets to make lasting change?

The good news is that such a world is possible, but only if philanthropies transfer their wealth and power.

This article originally appeared in the Nonprofit Quarterly. See the original article here.

In the Locked Out: Black Women, Wealth, and Homeownership series, members of Insight Center, Springboard to Opportunities, and several expert co-authors connect the lived experiences, hopes, and dreams of low-income Black women and their perspectives on homeownership to the historic and current policies that fuel our exclusionary housing market—and its impact on health and wellbeing—to advocate for equitable housing solutions for Black women.

A house is far more than a structure. In financial terms, American neoliberal thinking leads us to believe that a house is an investment and potential pathway to wealth. Intrinsically, however, a house is a home where we find security, privacy, and family. It is a place where we gather and host our loved ones. There are myriad reasons one would want to own a home—and in America, homeownership is a nearly universal aspiration. But there is a devastating lack of equity when it comes to who can afford this American Dream, with Black households less likely to hold real estate assets than white households by 29 percentage points.

Our discussion of homeownership as a driver of wealth is misplaced. Home ownership has long been touted as a solution to racial wealth inequality. However, believing that “homeownership drives wealth” is equivalent to saying that “wealth drives wealth.” Given the rules, policies, and structures that define our housing market today, ownership and maintenance of a home requires seed wealth, which generally comes from intergenerational wealth transfers.

Given that racial and gender wealth inequality continues to grow—with white families possessing 10 times the wealth of Black families—Black people are at an automatic disadvantage in the housing market, with less wealth to draw from as a community due to historic and contemporary structural barriers. For Black women, an added dimension of sexism makes achieving homeownership nearly impossible; Black women are 256 percent more likely to receive a subprime mortgage than a white man with the same financial profile.

There is also a significant racial gap in benefits for Black people who do manage to overcome structural barriers to homeownership. According to recent research, due to racism within the real estate market, the median value of Black real estate assets in the US is about 60 percent of the value of white real estate assets. This disparity has stripped the Black community of tremendous wealth. Brookings found the average Black home is undervalued by $48,000, adding up to an astounding $156 billion cumulatively.

For Black women, an added dimension of sexism makes achieving home ownership nearly impossible.

Although rates of homeownership have improved for households headed by Black women, homeownership is not an automatic financial wealth builder for Black people, who still possess little to no wealth (across educational levels). We must understand that Black people are not going to build financial wealth in the same ways and with the same tools as white people. As we emphasize above, wealth is iterative—and so, wealth built from homeownership today is predicated on the wealth of previous generations.

The uneven pandemic labor market recovery also makes it unlikely that a Black woman will attain the financial stability needed to apply for a mortgage, with the unemployment rate for Black women still far higher than that of women of other races due to occupational segregation that pushes Black women into low-paid, unstable work. While the persistently high unemployment rate for Black workers should be a primary concern for policymakers, esteemed experts have treated the problem like trivial collateral damage. Such experts include former Treasury Secretary Larry Summers, whose plan to tame inflation requires a sustained period of high unemployment—a burden that will fall on workers of color and could drive Black unemployment to 20 percent, just as it did 40 years ago. Such widespread Black unemployment would be nothing short of devastating, especially given that the recent spike in inflation also hits Black women particularly hard as they face both race and gender wage gaps.

On top of this, the Federal Reserve’s response to curbing inflation by upping interest rates harms Black Americans as they are disproportionately affected by hiring slowdowns and already face higher mortgage rates than white borrowers. These results are no accident. They are the predictable consequences of racist and sexist public policies and banking practices that intentionally exclude Black Americans—and Black women specifically—from homeownership as a pathway to economic and emotional stability.

This is true historically and in our current home-buying boom, in which Black women are unable to compete with the resources of white homebuyers. This strips Black women of both the tangible material assets and the intangible benefits—the sense of safety, peace of mind, and joy—that a home of one’s own provides.

Introducing Locked Out

In a new NPQ essay series—Locked Out: Black Women, Wealth, and Homeownership—members of Insight Center, Springboard to Opportunities, and several expert co-authors will explore different facets that are often not connected as part of the bigger picture of Black women’s homeownership, or lack thereof. Grounded in the lived experiences, hopes, and dreams of Black women, this series will examine and connect the historic and contemporary policies that fuel our exclusionary housing market, the mental health effects of housing insecurity, how extremely low-income Black women living in subsidized housing view homeownership, and solutions to create a more equitable housing market for Black women.

We will release these essays over the next few weeks, starting with a piece that challenges the long-held narrative that Black women are a monolith by focusing on the experiences of Black women living in poverty, highlighting that for such women, homeownership is a dream—and one that they deserve to achieve.

Looking to the lives of Black women moves us toward solutions that redefine wealth.

That piece will be followed by an exploration of the policies and practices, both past and present, that have locked Black women out of the dream of homeownership, denying them access to wealth building through homeownership that their white peers enjoy. We then outline the mental and physical health impacts of housing insecurity, using data from recent guaranteed-income programs and highlighting that Black women face dual stressors of racial “weathering” and sexism. Next, we examine wealth dynamics through the myth of the Black middle class, stressing that homeownership does not generate wealth for Black women to the extent that it does for middle-class white people. The series will close by presenting solutions that center Black women in an effort to reimagine the housing market and create more equitable outcomes. Looking to the lives of Black women moves us toward solutions that redefine wealth.

By combining Insight Center’s expertise in advancing race- and gender-equitable economic policy and Springboard’s deep field experience combating poverty by centering Black women, we provide context for understanding the housing market’s inequities. Ultimately, we offer a roadmap for leaders to enact concrete solutions that will ensure Black women have the same opportunity as other Americans to own homes of their own.

This article originally appeared in the Nonprofit Quarterly. See the original article here.

In the Locked Out: Black Women, Wealth, and Homeownership series, members of Insight Center, Springboard to Opportunities, and several expert co-authors connect the lived experiences, hopes, and dreams of low-income Black women and their perspectives on homeownership to the historic and current policies that fuel our exclusionary housing market and its mental health effects to advocate for equitable housing solutions for Black women.

Black women hold diverse and nuanced socioeconomic and political identities, and as such, our policies targeting racial and gender inequality must be flexible and adaptable. This is a core tenet of racially just policies and programs. Yet, too often in our politics and culture, Black women are presented as a monolith. Painting this diverse group with a broad, generalizing brush is dehumanizing and othering, particularly considering the nuances afforded to groups like white women, whose range of socioeconomic and political identities are granted more recognition.

Lumping together a myriad of experiences and circumstances leads to one-size-fits-all programs and policies that fail to account for the tremendous differences among Black women, resulting in inequitable outcomes for these women.

The legal scholar who developed the concept of intersectionality, Kimberlé Crenshaw, explains the limitations of viewing oppression using an “either/or” view instead of a “yes, and.”

With Black women as the starting point, it becomes more apparent how dominant conceptions of discrimination condition us to think about subordination as disadvantage occurring along a single categorical axis. I want to suggest further that this single-axis framework erases Black women in the conceptualization, identification and remediation of race and sex discrimination by limiting inquiry to the experiences of otherwise-privileged members of the group.

This erasure of Black women from social policy built on a single-axis framework is especially true with respect to housing.

Specifically, policymakers do not consider Black women living in poverty when developing programs that help people purchase and retain ownership of a home. As administrators of two guaranteed-income programs focused on Black women, we work each day to improve the economic conditions of program recipients and tailor our work to their lived experiences. In speaking to these women, we learned that they rarely view a home as primarily a wealth-building mechanism; mainly, a home is a private, secure place that enhances self-determination and agency and acts as a family cornerstone.

Take for example, Shaquille, a mother in Jackson, MS, who has experienced homelessness. When asked what her top motivation was in wanting to be a homeowner, she didn’t talk about investments or retirement, but rather her children. She wanted to have something of her own so that her kids would never confront the housing insecurity she faced. “I’ve experienced homelessness, and I don’t want my children to ever worry about their security and be put in the same situation I was.”

In addition to keeping their kids safe, mothers desired to pass an asset down to their children. Making such a hope into a reality is an uphill battle; Urban Institute research shows that Black families buy homes later in life than white people, buy less expensive homes, and are less likely to be able to hang onto those homes.

Contending with such challenges doesn’t dampen the desire of low-income Black mothers to build generational wealth through homeownership. Shameka, who lives in Atlanta’s Old Fourth Ward, described wanting to pass down a home to her children. She wants to provide a stable place for her family and a home that her children can return to as they grow. They currently live in public housing, and the pathway to homeownership is filled with barriers. Although she planned to purchase a home in the next few years, she says, “All of our rainy-day savings are going for never-ending storms that have happened.” Shameka noted that their current apartment is a place to live, not their actual home, explaining that a home “is yours, and no one can take it away from you.”

Several low-income Black mothers expressed similar sentiments, particularly after the COVID-19 pandemic. Having watched so many in their community and families lose their lives (especially due to the racial inequalities in our health system, as discussed later in this series), they were all too familiar with what can happen when a parent dies and leaves a child behind. Many Black mothers living in poverty felt that owning their home would ensure that their children have a place to live or would provide assets to support their children if the mothers were no longer around.

Aside from financial and housing security concerns, the privacy and safety afforded by owning a home was another common theme among the low-income Black women aspiring to homeownership who spoke with us. Tiyonda, who lives in a subsidized housing complex in Jackson, MS, talked about having a backyard where her children could play and she could have her own space, without feeling hemmed in by neighbors on the other side of her wall, always watching her comings and goings.

Ashala, another subsidized housing resident in Jackson, spoke of wanting to let her daughter go outside without constantly worrying about violence right outside her door. As a full-time caregiver for her grandmother, she also envisioned being able to decide who could stay in her house and for how long, a right she did not have as a subsidized housing tenant. Many mothers living in subsidized housing reported that leasing rules were weaponized against them, especially when they were with partners or trying to help family. Management would use cameras to surveil tenants and see whether their overnight guests stayed “too often,” resulting in a lease violation.

Maile, a young professional in San Francisco, lives with her young daughter in a below market-rate studio apartment, which she secured through an affordable housing lottery system. She has explored programs to help low-income residents buy homes, but thanks to inflation and San Francisco’s cost of living—one of the highest in the country—she’s struggled to save a down payment. She points out the importance of preserving the diversity of cities like San Francisco, which is pricing out residents of color. “Owning a home as a Black and Brown mama in San Francisco would feel so revolutionary because of gentrification and the major displacement of families going through housing programs that cannot afford to keep us here,” she said. “Having the ability and access to own a home would give me peace of mind because it would make me feel more valued as a resident of this city.”

Subsidized housing restrictions are extremely strict and limit everything from visitors to cosmetic changes to an apartment or house, reflecting the patriarchal nature of our social safety net. Some women said they no longer wanted to deal with ongoing inspections to make sure their house was up to Section 8 housing management’s subjective cleanliness standards. They also expressed a desire to decorate their homes—for example, to paint the walls any color and hang art and family photos.

The ability to express ourselves and feel secure in the homes we create is a key component of agency and the ability of individuals and families to self-determine. Carol of Clay County, GA, described that she did not grow up with much and did not have electricity until she was an adult. Today, the cost of rent and utilities in her rural community far outpaces wages, making it hard for families to pay for necessities like electricity, transportation, and groceries. To Carol, “owning a home is the most wonderful thing you can do” because it ensures a place where she and her family can “lay their head” without worry of being told to get out. Carol described many items that she could go without, but she noted that housing is a necessity. She also explained that many housing providers take advantage of that fact by neglecting their properties or exercising unfair control over residents. Although Carol’s five children are now adults, a home would still be a bedrock for her and her extended family in the community.

Sequoyah from Atlanta described loving aspects of her apartment and the area where she lives—it’s one of the reasons she’s been there most of her life. As a lifelong resident of a historic Black neighborhood undergoing intense gentrification, she views her family’s role as the neighborhood’s “keepers of the culture.” However, houses in the neighborhood are unaffordable, and living in public housing limits her independence. Sequoyah described home as a place of sanctuary and refuge and a place to call your own—from growing one’s own food to upgrading the space, homeownership expands the power of self-determination.

To address Black women’s needs, we must reimagine wealth and understand that its full value far exceeds the value of assets minus debt. We would be better served by our economic policies if we considered more than financial outcomes. This is especially true considering what marginalized Black women have shared about the barriers to homeownership that they’ve faced and the significance of becoming homeowners. Signs that our leaders are pursuing new solutions include this year’s release of An Economy for All: Building a “Black Women Best” Legislative Agenda—a framework to center Black women in economic policymaking released this year by the Congressional Caucus on Black Women and Girls.

The dreams and stories behind why Black women are interested in homeownership are as diverse and nuanced as the women themselves. To move beyond presenting all Black women as a monolith, we should listen to and learn from their stories. We must recognize that lived experience rarely fits within the simplistic narratives with which our country’s policymakers and officials describe families in poverty—and particularly, Black women-led families in poverty.

In the next installment of the Locked Out series, we’ll dive into the policies and practices—both historic and current, public and private—that prevent Black women from having the same access as their white peers to wealth building through homeownership.

This article originally appeared in the Nonprofit Quarterly. See the original article here.

This article is part of Community Strategies for Systemic Change, an ongoing series co-produced by the Local Initiatives Support Corporation (LISC) and NPQ. In the series, urban and rural grassroots leaders from across the United States share how their communities are developing and implementing strategies—grounded in local places, cultures, and histories—to shift power and achieve systemic change.

According to the US Census Bureau, rural America accounts for 97 percent of the country’s land but only 19.3 percent of the population. Such low population density creates challenges for many rural areas, including fewer careers that pay livable wages and higher concentrations of people with disabilities. Often, the result is rural poverty. As of 2019, an estimated 15.4 percent of rural residents lived below the poverty line, compared to 11.9 percent of urban and suburban residents.

The organization where I work, Legacy Institute for Financial Education (LIFE), is based in Angelina County, Texas, the most populous county in the nearly 10,000-square-mile Deep East Texas region, located north and east of Houston and west of Louisiana. Deep East Texas is known for its rich natural resources, such as freshwater lakes for fishing and pine forests for hunting. It supports a population of over 380,000 residents, 21 percent of whom live in poverty, 15 percent of whom are Black, and 15 percent Latinx. Lufkin and Nacogdoches are the largest cities within the region and are separated by only 20 miles.

When thinking of trauma, domestic violence, war, sexual assault, or the death of a loved one usually come to mind. Only recently have we come to view financial trauma as a phenomenon that needs to be addressed.

Despite the region’s beauty and resources, it faces pervasive challenges. Over the past 10 years, several large employers have closed, leaving thousands of long-time employees with unique skill sets without jobs and adding pressure to an already challenging job market. Many of these workers are now dealing with the stresses of chronic financial setbacks, such as underemployment, income poverty, and other financial trauma.

The Impact of Financial Post-Traumatic Stress Disorder

When thinking of trauma, domestic violence, war, sexual assault, or the death of a loved one usually come to mind. Only recently have we come to view financial trauma as a phenomenon that needs to be addressed. Now that researchers and psychologists are on notice, the pendulum has swung in the opposite direction. For example, a recent Forbes article claimed that “financial trauma is a reality for one third of millennials.” Only a few years ago, such financial stressors were not measured; now, over 30 percent of an entire generation is estimated to have been affected by them.

Symptoms of financial PTSD include avoidant behaviors, disbelief in one’s financial security, substance abuse, perception of living in a hostile environment, and a constant feeling of not having enough, even when that is not the case. Combined with other forms of PTSD, such as the cultural PTSD that is a legacy of slavery (eg, distrust within the Black community, expectation of failure, constant belief that “the system” is against them), financial PTSD is a recipe for disaster. Children from the same neighborhood can attend the same school, take the same courses, and even earn the same grades, but students who have been exposed to multiple generations of financial trauma will be more susceptible to stressors such as teenage pregnancy, committing a felony, or making short-sighted and self-destructive decisions that could have a life-long impact on their financial well-being.

Symptoms of financial PTSD include avoidant behaviors, disbelief in one’s financial security, substance abuse, perception of living in a hostile environment, and a constant feeling of not having enough.

Dr. Galen Buckwalter, a research psychologist, identified a few stressors that lead to financial PTSD, including living at least three months without income adequate to meet one’s expenses. Indeed, while there are many financial stressors, the inability to make ends meet is paramount. In rural communities, given high rates of disability, scarce job opportunities, and a higher likelihood of being born into a family that suffers from poverty, we can expect many children to grow up with constant exposure to financial trauma.

In rural communities, such as Deep East Texas, financial post-traumatic stress disorder (PTSD) is a major perpetuator of generational poverty; rural BIPOC communities are disproportionately and systematically affected.

Breaking the Cycle: The Vital Role of Trauma Informed Care

Based in Lufkin, the Legacy Institute for Financial Education has a mission to economically mobilize disadvantaged populations by teaching financial literacy, creating economic stability, and building generational wealth. Our Financial Opportunity Center, which delivers services using a model developed and supported by the Local Initiatives Support Corporation (LISC), is a key tool with which to address the symptoms of financial trauma.

When doing this work, it is important to take into consideration each person’s unique childhood environments, their experiences as adults, and other social determinants of health. Humans are complicated. No framework can explain every situation. Identifying the factors that contribute to an individual’s financial personality, we have found, is more akin to algebra than simple math. Nevertheless, our experiences show that the predominant and reoccurring variable that accompanies short-sighted financial behavior is the family/social environment during childhood.

In rural areas, as in cities, people often reproduce the behavioral patterns they grow up with. Children who see their parents neglect debt payments, lie to creditors, protect their Social Security disability benefits at all costs, or view the type of car they drive as a primary measure of success—are at high risk of suffering from financial trauma.

Our ability to recognize the symptoms of financial trauma and allow the people we work with to tell their stories has informed our trauma informed care approach. Imposing a narrative on an individual can be one of the most destructive methods of treating any form of trauma, including financial PTSD, so we do our best to avoid it.

Stabilizing clients is the first step. But long-term economic prosperity requires creating conditions in which community members not only survive—but thrive.

Usually, when people first come to our organization, they have an immediate emergency. They are typically scared, stressed, and seeking solutions. Our team helps them to navigate their immediate crisis and identify other crises that may be on the horizon through a wrap-around services model that includes budgeting tools, income support, and employment coaching. We believe this form of care is effective and necessary for practitioners who seek to address poverty and financial trauma.

Taking the Next Step: Developing Businesses that Build Community Wealth

Stabilizing clients is the first step. But long-term economic prosperity requires creating conditions in which community members not only survive—but thrive.

While resolving financial PTSD is a necessary first step to thriving, a vital second step is helping people gain access to assets and build ownership.

At LIFE, we provide such help through microlending and small business lending, both of which offer different ways of accessing capital, which helps many of the people we work with become business owners and develop businesses that sustain families and community. These loans are combined with culturally sensitive business support services and technical assistance, all offered through our emerging community development financial institution (CDFI) lending arm. CDFIs across the nation offer similar financial services. Designed to increase access to capital for low-income and underserved people and communities, they are an important piece of the puzzle in treating financial PTSD and mobilizing poor and working-class communities into stabilized prosperity.

As noted in a recent NPQ article, our home state of Texas has the highest average payday loan rate in the nation, at 664 percent. It is enormously difficult to break the cycle of falling victim to predatory loans, and the impact such loans have on the psychology of their victims is widely misunderstood. Many CDFIs offer a range of solutions to this problem, including small-dollar loan programs that can be used to refinance individuals out of their predatory loans and into loans with affordable interest rates. CDFI loans are often coupled with financial literacy and in some cases personalized financial coaching.

LIFE, along with other organizations throughout the United States, have partnered with Kiva and LISC to bring a unique lending solution to our community. Kiva offers a safe platform for community members to invest in local businesses through zero percent interest crowdfunded loans. One benefit of the Kiva approach is that borrowers control their own narratives by sharing their stories directly with lenders, building connections between borrowers and potential lenders that would not have otherwise existed.

Some of our borrowers have expressed how empowering it is to tell their story using their own words without fear of being excluded because of it. Take, for example, Willie, a Black business owner in Lufkin. His grandfather owned a soul food restaurant in Houston for over 50 years. Because of various traumatic events in his life, Willie was convicted of a felony and sent to prison. He earned several certifications while incarcerated, but when he was released, restaurants would not hire him as a chef because of his conviction. To overcome these barriers, Willie turned his street smarts into a BBQ and soul food restaurant, which he has now owned for nearly 10 years.

The Kiva platform allowed Willie to tell his story, and it resonated with small lenders on the platform, who quickly funded a $4,000 loan for him to buy much needed equipment. After reading borrowers’ stories, people can support businesses by lending as little as $50, which is then combined with other loans to reach the targeted loan amount.

With the business owners we support, LISC will even match the loans dollar-for-dollar up to $5,000, provided the loan is endorsed by a LISC-approved trustee. This match shortens the duration of the fundraising period and increases the likelihood that the borrower’s loan will be fully funded. Kiva loans often serve as beginner loans; borrowers who seek and repay the loans often qualify for larger loans that enable their businesses to expand operations over time.

Conclusion

The above example provides a small illustration of how a trauma informed approach rooted in listening to people’s stories and helping them address challenges arising from personal and family history can be effective when connected with business lending and technical assistance support. At scale, these approaches address several of the stressors experienced by individuals and entrepreneurs in our community.

For example, a community member who invests $50 in a local business through a Kiva loan is more likely to purchase products from that business. The trust and loyalty that this bond generates help to create a “Buy Local,” “Buy Black,” or “Buy Brown” mindset, sustaining a growing network of thriving BIPOC-owned businesses.

Changing the economics game in rural America is not easy. But by addressing the root causes of people’s economic pain and working with those individuals to develop businesses that they own and develop, a trauma informed approach offers a pathway to creating thriving communities in East Texas—and beyond.

This article originally appeared in the Nonprofit Quarterly. See the original article here.

The following is a transcript of the video above, from our webinar on “Remaking the Economy: Owning Our Future.” View the full webinar here.

Esteban Kelly: We took this question—“what would it look like to really explore possible futures?”—looking at a roughly 15-year horizon for a democratic economy in the US, and not just take that as a question of scale but to look much more broadly at the potential impact on our society. In doing so, I think some of the rigor that [we] wanted to apply was around not just assuming one future or painting one vision, but to actually explore plausible solutions or futures and possible ones, whether they’re good or bad. And also, to not bias or lean too much into optimism or pessimism, but actually to apply all of the above. What we did was we took out of the easily imaginable, the easily plausible futures. We looked at one that was a little more pessimistic, where there was continued obstruction from elected officials, from misinformation/disinformation, and where any of the work that we’re trying to do is stymied in different ways … What would that mean for organizing? What would that mean for groups in the third sector, for our communities? Even there, we saw some amount of progress happening.

The other plausible scenario is what most organizations would consider their “vision.” If you’re doing a retreat or something like that, where you say, okay, we’re not going to be wildly speculative and imagine that everything’s going to go our way. We’re also not going to imagine societal collapse. But we’re going to take our preferred future and lean into that one. So, one of the scenarios—there were four total—that we illustrated was looking at one where there is limited progress, where it’s not ex machina; suddenly, there’s this transformative prison abolition and everything else. What could some real progress look like if things move forward, if we unlock the relationships, the allyships. We got pretty specific about it, even if it was speculative. We were like, okay, here’s what this might look like on the ground in a place like Colorado or in other places.

Then we took the back half of that exercise to look at possible scenarios, so things that weren’t completely implausible, but also required a little more imagination, whether that was optimistic or pessimistic. We called one of those scenarios collapse, looking at the impact of the climate crisis or attacks on democracy in the US, and of a lack of partnership and support from government agencies who we see as playing a key role if we continue the momentum that has been building for the last couple of years in how we deal with small business and other kinds of lending, to finance the transitional scale that we think needs to happen. In that scenario, it really seemed to us like there’ll be much more mutual aid, some of the kinds of activities that you see in the aftermath of things like Hurricane Katrina or Superstorm Sandy, the wildfires in California, the water crises including the one that’s happening now in Jackson, Mississippi. How would the Solidarity Economy and cooperatives be seized upon in those moments as a tool to take care of our people?

Lastly, we did want to have that one that asked: what if our wildest dreams did happen? And so we did take a look at that. I think the purpose of framing out all four is because the reality of whatever ends up happening usually is a mix. It’s a combination of all four of those things. There are things that are plausible, that are pessimistic, that are optimistic, that are transformative, and that are wild. And because building out scenarios and visions of the future involves so many different things around social things—political, technological, ecological, institution building, contingency—it turns out that reality ends up being a little bit of all of those things, including those wildly speculative ones.

This article originally appeared in the Nonprofit Quarterly. See the original article here.