Financial Services and the Competitive Advantage of Racial Equity

Overview

Historically, financial institutions in the United States have not served people of color effectively or fairly. Even today, people of color have less access to credit, pay higher interest rates for loans, and are less likely to receive venture capital funding as compared to their White counterparts. Serving these markets effectively is not only a moral imperative, but also an economic opportunity to enhance a company’s bottom line.

A follow-up to The Competitive Advantage of Racial Equity, developed in partnership with FSG, this report highlights specific action steps leading companies in the financial sector have taken to create business value by using credit, savings, and investment products to address the unique challenges faced by communities of color. The companies featured in this report—Citi, Oportun, OneUnited Bank, Prudential Financial, and Impact America Fund—have found competitive advantage through their strategies to serve consumers who have historically been excluded.

Top Takeaways

  1. With a deeper understanding of the impacts of structural racism, financial services companies can avoid one-size-fits-all approaches to product and service development and better serve historically excluded populations of color and thus reach expanded markets.
  2. Leading financial services companies are reconceiving products and services to better meet the needs of people of color and are strengthening their external business environment by supporting public policies and norms that expand financial security.
  3. These companies also have strong internal catalysts—including a diverse employee base and a culture of inclusion—that enable them to implement strategies that advance racial equity and business growth.

Find all related material for The Corporate Racial Equity Advantage

Working with Artists to Deepen Impact

Overview

This is the first in a series of briefs that describe the changes, insights, and lessons when arts and cultural strategies are deployed in service of comprehensive community development and planning. During ArtPlace America's Community Development Investments initiative, six participating organizations developed creative placemaking projects that could help them more effectively achieve their missions. PolicyLink conducted a research and documentation project to measure the progress, immediate outcomes, and impacts of those projects. This brief examines how these organizations learned to work with artists and develop collaborative practices.

Explore more about our research and documentation project at communitydevelopment.art

The Payback Problem: How Taking Parents' Child Support Payments to Pay Back the Cost of Public Assistance Harms California Low-Income Children & Families

Overview

In California last year, the state intercepted over $300 million in child support payments that should have gone to low-income children and their families. Every year, hundreds of thousands of poor children across the state receive just a fraction of the child support payments made by their parents. That’s because, despite having the fifth largest economy in the world, California takes all but the first $50 of every child support payment made to children who receive public benefits and uses it to reimburse the government for the cost of providing those benefits. This report was a collaborative effort with organizations such as the Insight Center for Community Economic Development and Western Center on Law & Poverty to raise awareness of the unfair system that deprives poor children of critical resources, particularly children of color, and lift up recommendations for reform.

The Future of Banking: Overcoming Barriers to Financial Inclusion for Communities of Color

Overview

Systemic failures in the financial sector led to the financial crisis of 2007-2008 and the Great Recession that followed. These crises disproportionately impacted low- and moderate-income (LMI) communities of color through job loss, foreclosures and an unprecedented loss of wealth. During the recession, Latinos’ household wealth declined by 66%, and African Americans’ by 53%, while White households lost 16%. Ten years after the financial crisis, communities of color have yet to fully recover, and the financial system has failed to solve the problems that devastated communities of color. To help the most impacted communities recover and rebuild, the banking and financial services industry must increase their focus on serving LMI households, businesses, and communities of color. This report explores key opportunities within the banking industry, policy, and regulation that can lead to financial inclusion for all.

Our Homes, Our Future: How Rent Control Can Build Stable, Healthy Communities

Overview

Amid the worst renter crisis in a generation, it is time for policymakers to respond to the call for rent control to protect renters from skyrocketing rents and displacement. Rent control has tremendous payoff: if the rent control policies being debated right now in six states and two cities become reality, 12.7 million renter households will be stabilized. If adopted by states nationwide, 42 million households could be stabilized.

Read the full report on how rent control can build stable, healthy communities.

This report was produced by a collaboration between PolicyLink, the Center for Popular Democracy, and the Right To The City Alliance.

Sarah Treuhaft highlights key findings from the report, and speakers from Oregon and New York will discuss their local campaigns and the growing movement led by renters to push for stronger tenant protection laws. View webinar recording.

Health Care and the Competitive Advantage of Racial Equity

Overview

People of color in the United States experience poorer health and more premature, preventable mortality than their White counterparts. Although health care companies prioritize achieving health equity, their efforts often focus on disparities caused by poverty, education, and disability without explicitly addressing how structural racism significantly raises the risk of poor health for people of color. Corporate diversity and inclusion efforts, while helpful, are not sufficient to counter biases in clinical practice or access to health care. By better serving communities of color, health care companies can deliver better outcomes and strengthen their own economic performance.

A follow-up to The Competitive Advantage of Racial Equity, developed in partnership with FSG, this report focuses on actions taken by companies in the health care sector to create business value by addressing the unique challenges faced by communities of color. The companies featured in this report—ProMedica, Kaiser Permanente, Cigna, and UnitedHealth Group—have adopted several business strategies that improve health outcomes for people of color and create a competitive advantage through reduced costs, avoided readmissions, and greater member satisfaction.

Top Takeaways

  1. For health care organizations to achieve health equity, it is essential to have an explicit focus on racial equity.
  2. Leading health care providers and commercial insurance companies are redesigning the ways in which they provide core services to better meet the needs of people of color and they are making investments to improve community conditions that affect health.
  3. These companies also have strong internal catalysts that enable them to implement strategies—including a diverse employee base that feels included, strong leadership that understands why race matters, and an organizational structure that connects equity to business goals.

Find all related material for The Corporate Racial Equity Advantage

All-In Cities: Building an Equitable Cities Movement

Overview

In 2015, PolicyLink released a framework and policy agenda for inclusive cities. Since this time, the All-In Cities initiative has worked to build community power, forge innovative partnerships, and support government leaders and community coalitions in advancing racial economic inclusion and equitable growth in cities. This progress report describes our approach, the impact of our work thus far, and lays out a vision for the future.

Supporting Small Businesses to Do Well and Do Good in the 21st Century

Overview

A thriving, inclusive economy depends on the success and growth of small businesses. Nearly half of all workers are employed at a small business; and businesses owned by women and people of color have created 1.3 million new jobs between 2007 and 2012. This brief looks at small businesses and the barriers they face in providing good jobs obstacles, as well as key strategies being implemented by various actors in the business development ecosystem—technical assistance providers, small-business lenders and investors, economic development agencies, business associations, and workforce and labor partners—to help small businesses get on the road to good jobs.

Employment Equity: Putting Georgia on the Path to Inclusive Prosperity

Overview

This brief describes why employment equity is critical to Georgia’s economic future and lays out a policy roadmap to achieve employment equity. It is based on data analysis and modeling of a “full-employment economy” (defined as when everyone who wants a job can find one), which was conducted by the Program for Environmental and RegionalEquity (PERE) at the University of Southern California as well as policy research and focus groups conducted by PolicyLink and the Partnership for Southern Equity.  See the detailed methodology and fact sheet "Employment Equity: The Path to a More Competitive Georgia."

Inclusive Procurement And Contracting: Building a Field of Policy and Practice

Overview

This study, co-authored by Emerald Cities and PolicyLink, and generously supported by a grant from the Annie E. Casey Foundation, surveys the current landscape on inclusive procurement and contracting policies and practices in the infrastructure and construction industries. The goal was to specifically determine how to best position minority-owned, women-owned, and disadvantaged businesses (MWDBEs) to effectively compete for large-scale construction projects in these industries. A successful inclusive procurement program of action is key not only to providing jobs, but also to closing the wealth gap needed to secure the well-being and future of children, families, and the regions in which they live.

This report details the rationale for inclusive practices in this industry and includes historical and current equitable development policies and trends. It also identifies challenges and best practices and sets forth recommendations for strengthening the field of practice. The report provides insight into inclusive procurement and contracting policies within the energy, water, transportation, health, education, and public housing sectors. It also considers the field of practice in different geographic regions of the United States. Download executive summary here.

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