Forging partnerships to close the racial wealth gap in Atlanta

By Kaela Hammond and Lauren Thomas Priest, program officers, Community Foundation for Greater Atlanta

The racial wealth gap in Atlanta is staggering. For every $1 of wealth the average Black family in Atlanta holds, the average white family in Atlanta holds $46. As a result: 

• 45% of Black Atlantans have delinquent debt (compared to 21% of white Atlantans. 
• 37% of Black Atlantans have at least $2,000 in emergency savings (compared to 89% of white Atlantans), and
• Black Atlantans have a median credit score almost 100 points lower than their white counterparts. 

Wealth determines many factors in our lives—where we can afford to live; what schools our children attend; our access to healthcare and healthy food; and whether we can afford unexpected car or home repairs. According to the Bush Foundation, “closing wealth gaps can make a difference in addressing virtually all other social and economic disparities.”

The Bridgespan Group recently conducted a study that identified five critical drivers of the racial wealth gap. They are: 

• Family inheritance
• Income and benefits sufficiency
• Homeownership
• Debts, fines and fees
• Entrepreneurship

Because of these drivers, the racial wealth gap continues to grow—despite the fact that Black wealth across the U.S. is rising. Nationally, between 2019 and 2022, the racial wealth gap increased by $49,950. And it is likely to continue to grow without significant intervention. With our nonprofit and donor partners, the Community Foundation for Greater Atlanta (Foundation) is addressing each of these drivers so that all of Atlanta’s residents can share in its prosperity.  

Family inheritance: When children receive an inheritance from family members, they can use those funds to pay for college with less debt, start a business, invest, or buy a home—all wealth-generating activities. Through its Seed Capital for Life program, our partner The GRO Fund is seeking to change the wealth trajectory of young people in predominantly Black communities in Atlanta with a combined guaranteed income and accelerated baby bond pilot program. 

Income and benefits sufficiency: Access to high-quality jobs facilitates wealth-building through income and benefits like retirement plans and health insurance. Our partner, CareerRise, is working to improve our local workforce development system through its Equity@Work initiative. This initiative focuses on five strategic goals: developing and advocating for policy and practice solutions, developing regional metrics to drive continuous improvement, increasing availability and access to high-quality training programs, developing youth-specific strategies, and increasing engagement with employers to maximize opportunities for job seekers and workers.

Homeownership: Homeownership provides access to equity and the opportunity to create generational wealth. But in Atlanta, the homeownership gap between Black and white households is more than 26%, the highest it has been in more than 50 years. Through Wells Fargo’s WORTH initiative, the Community Foundation and nearly 50 other nonprofit partners are working to reduce the racial homeownership gap in our region. 

Debt, fines and fees: Student loan debt extracts resources from families that could be used to build wealth. Because of the racial wealth gap, Black students are more likely to accumulate student debt to obtain those credentials and degrees. Black households are more likely than their white counterparts have outstanding loans, have a higher value of unpaid student debt, and more likely to have a negative net worth because of their student loan debt. Through our Student Debt Program, the Foundation repays the student debt of select residents in our three places of focus. Essentially a “reverse scholarship program,” residents apply and are selected for relief based on financial need. 

Entrepreneurship: Nationally, the median net worth for Black business owners is 12 times higher than Black nonbusiness owners. However, because of the racial wealth gap and other factors, Black business owners have less access to the capital they need to launch and grow their businesses than their white counterparts. Nearly 96% of Black-owned businesses in Atlanta have no paid employees, and Black entrepreneurs are less likely to be able to generate wealth from their businesses than entrepreneurs of other racial and ethnic backgrounds. Our partner, Atlanta Wealth Building Initiative (AWBI), supports Black entrepreneurship and business ownership by strategically partnering with and supporting Business Supporting Organizations. Since 2018, AWBI has provided more than $2.7 million in strategic partnerships, grants, loans and technical assistance, and leveraged or influenced more than $83 million for Atlanta’s community economic development and small business ecosystem.To support the Community Foundation’s work to close the racial wealth gap in Atlanta, please contact our Philanthropy Team.

This is sponsored content.

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