AOE Webinar: Closing the Racial Wealth Gap by Shifting Ownership

Alternative Ownership Enterprise
December 6, 2023
This webinar was held on Wednesday, January 31st  at 10am PT / 1pm ET.

In an era where the racial wealth gap continues to widen, a critical conversation is unfolding around the mechanisms that foster economic inequality and the strategies needed to dismantle them. A recent article by Brookings highlights an alarming trend: the racial wealth gap is not only persisting but growing. While conventional approaches have largely focused on income disparities, they miss a fundamental piece of the puzzle—wealth is predominantly built through the ownership of appreciating assets.

It is within this context that Smitha Das, the director of Mission and Impact Investing at World Education Services and Santhosh Ramdoss, the President and CEO of Gary Community Ventures joined our recent webinar: Closing the Racial Wealth Gap by Shifting Ownership. 

During this webinar, they shared the Ownership Pyramid (below), a framework they have developed to guide their investment strategy to close the racial wealth gap. This framework underscores the significance of ownership as a multifaceted tool for wealth building – not just in terms of individual financial assets like stocks and bonds, but also the companies we work in, the homes we live in, and the communities we belong to. 

Ownership from an investor standpoint, as Smitha and Santosh articulated, is a prism through which we can examine a spectrum of asset classes, from real estate to private debt. However, to harness its full potential, an intentional strategy that specifically addresses the historical and systemic exclusion of communities of color from wealth-building opportunities is paramount. This exclusion, rooted in a history of slavery, redlining, discriminatory lending practices, and more, necessitates a focused effort to reverse its effects.

Yet, Smitha and Santhosh added, ownership is more than a pathway to economic prosperity. Ownership rights contain a bundle of economic rights but also governance rights (learn more in our recent report). Many of the shared ownership models mentioned in the webinar offer a means to build worker voice, foster democratic workplaces, and strengthen community power. 

However, as investors navigate this journey towards equitable wealth distribution, Smitha and Santhosh invited us to confront the complexities inherent in this process. The pursuit of individual asset accumulation, for instance, must be balanced against the needs of a whole community. For example, one person selling a home at a premium might make it less affordable and contribute to displacement for others, while locking up assets in community-held care might reduce the wealth building potential for people of color. Understanding and wrestling with these tensions is healthy. In all cases, our panelists encouraged prioritizing the needs of those we aim to support.

Investing in ownership includes opportunities for both market-rate returns and the necessity for catalytic investments. It's a strategy that can be seamlessly integrated across the economy, offering a blueprint for systemic change. As our panelists encouraged, let’s all become “ownership nerds”. Together, we can forge a future where wealth and power are equitably distributed, laying the foundation for a society where all can thrive.

Go deeper: Smitha and Santhosh’s article in ImpactAlpha: Building an ownership movement to close racial wealth gaps.

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