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Milwaukee

‘GroundBreaking’ racial equity: How Twin Cities’ $1B coalition can transform Milwaukee

todayNovember 7, 2023

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Milwaukee, a city with a historical backdrop marked by segregation and economic disparity, especially among its African-American residents, can draw transformative insights from the recent achievements of the Twin Cities GroundBreak Coalition. This coalition, comprising over 40 entities from the philanthropic and corporate sectors, has reached a groundbreaking milestone by raising nearly $1 billion to enhance Black homeownership, entrepreneurship, and development in the Twin Cities area. This funding initiative is pivotal, as it stands not merely as a financial achievement but as a symbol of a collective commitment to systemic change​​.

GroundBreak’s approach is founded on the premise that systemic issues require systemic solutions. The coalition was launched with an ambitious target: to amass $5.3 billion over the next decade to address racial wealth gaps and to foster a more equitable distribution of capital. It is a direct response to the stark disparities in homeownership rates between white Minnesotans and communities of color. With less than a third of Black Minnesotans owning homes, GroundBreak’s efforts are a critical intervention in a state where the gap in homeownership rates is wider than in 12 other states, according to Census Bureau data​​.

Tonya Allen, president of the McKnight Foundation, elucidates that GroundBreak’s uniqueness lies not in raising a fund but in its determination to create fundamental change. The coalition aims to change the rules of how capital grows and to introduce systemic solutions that can have long-lasting impacts​.

The strategies employed by GroundBreak are manifold:

  1. New Financial Tools and Products: The coalition plans to introduce financial assistance tools like down payment assistance and start-up loans to empower Black homeowners and entrepreneurs. This aid, expected to start flowing in 2025, is designed to remove the financial barriers that have long hindered the economic prosperity of Black communities in Minnesota​4​.
  2. Community Engagement: The coalition has actively involved the community, gathering input from over 170 individuals to pinpoint financial tools and products that can reduce the economic barriers faced by people of color. This inclusive approach ensures that the solutions are grounded in the real-life experiences and needs of the community​5​.
  3. Scaling Existing Programs: By scaling existing programs, GroundBreak is extending the reach of proven financial tools to a broader segment of Minnesotans. This scalability is essential to ensure the solutions have a wide-reaching impact​6​.
  4. Collaborative Financing: A unique feature of GroundBreak’s approach is the rare collaboration between banks, financial institutions, and philanthropy. This partnership leverages the strengths and resources of each sector to craft a more inclusive financial ecosystem​7​.
  5. Long-Term Systemic Change: GroundBreak’s initiative is not about temporary fixes but about instigating long-term systemic change. By changing how banking institutions operate, the coalition aims to create a durable and equitable financial system​8​.

The funds raised so far are a collective pledge from a consortium of banks and foundations. This commitment, which spans three to ten years, is a testament to the coalition’s potential to catalyze real change. Over the next decade, GroundBreak has set clear objectives: to aid 11,000 new homeowners, support 5,000 entrepreneurs, spur 60 developments, and create 23,500 affordable housing units​.

The implications for Milwaukee are profound. Emulating GroundBreak’s strategy could mean developing a similar coalition that unites diverse sectors in Milwaukee to address its historical patterns of racial and economic inequality. The city could adapt GroundBreak’s model to:

  • Establish Specific Goals: Like GroundBreak, Milwaukee could set quantifiable targets for increasing homeownership and entrepreneurship within the African-American community.
  • Engage the Community: GroundBreak’s model highlights the importance of including community voices in identifying barriers and crafting solutions. Milwaukee could implement a similarly inclusive approach to ensure that its strategies are responsive to the needs of those most affected by economic disparities.
  • Leverage Collaborative Financing: By fostering partnerships between financial institutions, philanthropic organizations, and the public sector, Milwaukee could create a robust framework to fund and scale financial products to build wealth within marginalized communities.
  • Emphasize Homeownership: With homeownership being a critical avenue for wealth accumulation, Milwaukee could focus on creating pathways to homeownership for African Americans, taking cues from GroundBreak’s approach to reducing the racial homeownership gap.
  • Support for Entrepreneurs: By providing start-up loans and other financial products, GroundBreak aims to bolster Black entrepreneurship. Milwaukee can similarly invest in Black-owned businesses as engines of economic growth and job creation.
  • Prioritize Long-Term Solutions: Drawing on GroundBreak’s vision, Milwaukee could focus on changing the systemic conditions that perpetuate economic disparities, rather than seeking short-term fixes.
  • Scaling Proven Programs: GroundBreak has scaled existing programs to extend their reach. Milwaukee can learn from this by identifying and expanding successful local initiatives to benefit a larger population.
  • Long-Term Systemic Focus: GroundBreak’s approach is designed for long-term systemic change rather than short-term fixes. Milwaukee could prioritize reforms that alter the structural factors contributing to economic disparities.
  • Leveraging Data and Transparency: The GroundBreak Coalition’s work is data-driven, using clear metrics to set goals and measure progress. Milwaukee can adopt a similarly transparent approach, using data to inform strategies and ensure accountability.

As GroundBreak strives for its next milestone – raising an additional $250 million by the end of 2024 – Milwaukee can observe and learn how such coalition-driven initiatives can meet and exceed their ambitious goals. GroundBreak’s endeavor offers Milwaukee an exemplary model that underscores the potential for financial systems to evolve and serve as engines for racial equity and shared prosperity.

Source: GroundBreak Coalition Progress Report

This story was written with assistance from ChatGPT.

Written by: HYFIN

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