When it comes to addressing racial inequity, a national crisis can inspire public and private investment like nothing else. At the recent Freedman’s Bank Forum in Washington, DC, Vice President Kamala Harris and Treasury Secretary Janet Yellen announced the injection of $8.7 billion into the Emergency Capital Investment Program (ECIP), to be deployed to more than 175 community lenders across the country, from urban communities in California to low-communities in the Mississippi Delta to tribal communities in the Great Plains of South Dakota.

A recent Urban Institute report, assessing racial equity commitments to community development finance by the private and philanthropic sector, highlights the importance of interrogating the systems and structures through which these commitments are made. The report tallied racial equity commitments that arrived on the heels of nationwide protests that followed George Floyd’s murder in 2020. Our findings show that, between June 2020 and May 2021, the private and philanthropic sectors have made at least $215 billion in racial equity commitments, with likely more than half going to community development activities and investments.

Four insights from the study highlight how the private and philanthropic sector could move beyond the “moment of crisis,” bake racial equity into community development finance systems, and reimagine the infrastructure needed to propel racial equity commitments as a moral and economic imperative.

  1. To sustain momentum beyond the moment, maximize existing resources and strengthen processes for targeting and delivering finances 
  2. Implement flexible, long-term financing
  3. Respond to great need with even bolder commitments
  4. Make system change a business imperative

Read the full article about racial equity in community development by Brett Theodos, Steven Brown, Shena Ashley, John Sankofa, and Shena Ashley at Urban Institute.