Lisa Mensah, President and CEO of Opportunity Finance Network
Celebrating Juneteenth Through Community-based Lending for Vibrant Neighborhoods
The promise of freedom was kept from enslaved people in Galveston, Texas for two and half years after the Emancipation Proclamation. On June 19, 1865, Union troops arrived in town to deliver news that white slaveholders had been suppressing: the Confederacy had lost the war.
Slavery was over.
This year, Juneteenth should be celebrated by all of us and for all of us. This is a day to reflect, aspire, and invest in the America we want to have for Black people, yes, but also everyone. Commemorating Juneteenth means very little if we aren’t also actively working to close the racial wealth gap and end the persistent poverty that continues to stifle Black, rural, urban, and Native communities.
Intrinsic to our collective freedom is financial freedom. Corporations, philanthropies, policymakers, and others looking for ways to address systemic racism, the racial wealth gap, and persistent poverty must look to community development financial institutions, or CDFIs.
CDFIs are community-based lenders — banks, loan funds, credit unions, and venture funds —serving Black, Brown, rural, and other communities left behind by mainstream finance. We provide the loans that support the hallmarks of vibrant communities: small businesses, jobs, affordable housing, and community facilities.
The more than 340 CDFIs in Opportunity Finance Network’s membership have helped create or retain 1.8 million jobs, start or expand more than 448,541 businesses, and support the development of more than 2.1 million housing units and 12,072 community facility projects, according to OFN’s annual member survey.
It’s time to grow CDFIs beyond the niche we have occupied. It’s time to build on this success with greater commitment and investments from private and public partners. Every single one of us has a responsibility and a role to play in advancing justice.
RACIAL WEALTH GAP
As we mark the joy of Emancipation this week, the painful realities for Black Americans are a reminder that the nation’s promise of liberty and justice for all remains unfulfilled for every American.
The end of slavery didn’t suddenly bring rapid economic growth for Black communities. The Emancipation Proclamation stated that “no one should do no act or acts to repress such persons, or any of them, in any efforts they may make for their actual freedom.” Yet systemic racism and discrimination has persisted for centuries. Barriers to employment, housing, and education have created massive disparities between white and Black America. A lack of investment in Black, LatinX, Native, and rural communities contributes to a widening wealth gap, income inequality, and persistent poverty.
Today, white family wealth is seven times greater than Black family wealth and five times greater than Hispanic family wealth. Only 5% of Black Americans hold some business equity compared to 15% of white Americans, and the pandemic forced almost half of Black-owned businesses to close.
Persistent poverty in the U.S. – poverty rates of more than 20% for more than 30 years – makes it more difficult for communities to grow. Across the country, 12% of the population – 37.1 million people – live in persistent poverty (according to research by Opportunity Finance Network). In rural communities, poverty has a strong grip: 15% of persistent poverty areas are rural – that’s 7 million people.
Economic opportunity is a cornerstone of a free and just nation. Yet, millions of Americans seeking capital are overlooked and left stranded without the financial tools to reach their full potential. And this costs all of us. A report from McKinsey estimates that closing the racial wealth gap would add a whopping $1 trillion to $1.5 trillion dollars to our economy over the next 10 years.
This Saturday, my family and I will celebrate Juneteenth together. My family is diverse – we are descended from enslaved Americans and immigrants. As the daughter of a Black Ghanaian father and a white Oregonian mother, I feel this anniversary very deeply and personally – I feel its meaning for my ancestors, feel its import for my children, and feel its pull for future generations. But the work of emancipation is unfinished, for Black Americans, for all Americans. We can – we must – go the last long mile.
Let Juneteenth serve as a reminder that our country’s founding principles won’t be fully realized until we close the racial wealth gap and end persistent poverty. We need to be just as committed in our actions as we are to our rhetoric. Freedom and justice take money, and it ought to be invested directly in our communities.
Lisa Mensah is the president and CEO of Opportunity Finance Network.