This summer’s powerful uprising for racial justice has breathed new life into the centuries-long call for reparations—and philanthropy should be adding our voices.
On the federal level, a bill that would establish the first commission on reparations in the United States, sponsored by Rep. Sheila Jackson (Texas), may be heard in the House this summer. Meanwhile, cities are taking it upon themselves to begin the process: This month, Asheville, in my home state of North Carolina, and Providence, Rhode Island, both took steps to begin the process of reparations, investigating how our current cities have been scaffolded on wealth stolen from enslaved Black people and Indigenous people.
This progress shows us that these efforts will be slow and deliberate, but also that we can each take action toward reparations in our own spheres of influence. Leaders of the inextricable sectors of philanthropy and finance, with our immense wealth, must take it upon ourselves to advance reparations in ways that are already within our power, now.
The spirit of reparations is that those who hold the bulk of ill-gotten resources and influence must hold responsibility for repairing the harms done. As movers of money, we have the ability to take immediate action to get resources into the hands of those who have been marginalized and excluded by wealth-holding institutions for generations. Collectively, American foundations have approximately $1 trillion in assets. Rather than waiting for Congress to act, or leaving the work of reparations to spread on a small, local level, finance and philanthropy could work in tandem to drive wealth into the hands of Black and Native Americans today. Undertaking reparations would begin to pay philanthropy’s centuries-long debts in a transformational way, building beyond this current moment and short-term, reactive grantmaking and pledges that run the risk of fizzling out in months or a year.
As I’ve argued before, philanthropy could take 10% of its assets—10% tithed from each foundation in existence—and establish a trust fund led by Native Americans and Black Americans that would support asset-building projects, such as home ownership, education or startup funds for businesses. This reparations tithing among foundations could happen right now, without legislation, as a demonstration of commitment from the philanthropic community, which has long been called out for its ongoing failures to adequately support the leadership of Black and Indigenous people. This trust fund would not entail yet another arduous grant application—instead, it would be premised on actual trust with these communities. There can be no specifications around how that money is spent once it’s in their hands, no reporting requirements—no strings attached.
This is not the only trust fund-like program that philanthropy and social and ethical finance could undertake. Professor William A. Darity Jr. has developed an idea for what he calls “Baby Bonds,” another kind of trust fund held for every child born in the United States, with the amount in the fund based on the wealth of the child’s family, rather than based on race or heritage. Bill Gates’ baby might get $50, Darity has suggested, while the baby of the lowest-income family might get something in the thousands or tens of thousands. In this instance, the benefit to Black, Latinx and Indigenous families would counter the racial wealth gap, a legacy of slavery, colonialism, redlining and other policies that has created a reality where, in 2016, “the median household wealth was $171,000 for white families and just $17,600 for Black families.” To be clear, Darity does not wish to categorize this as a reparations program, as it does not specifically or exclusively address the needs of Black Americans. However, from an outcome-based perspective, this program is another transformative option available to philanthropy and finance right now as a means of addressing racial injustices.
Finally, a true commitment from the finance sector to the spirit of reparations could involve throwing support behind a financial transaction tax (FTT). Movements of low-wage workers in New York are currently proposing this as one option in their campaign to #MakeBillionairesPay for budget shortfalls and relief for workers in New York state. This miniscule fee charged on the trading of stocks, currencies, debt instruments (like bonds and treasury notes), and derivatives (futures and options) would hardly be felt by investors. However, an FTT of 0.25%—$1 on every $400 of stock traded—would generate hundreds of billions of dollars. Based on who trades stocks, only the most affluent communities, the top 10% of households, would even perceive the impact.
Even with a more conservative rate of tax, such as that proposed in the Inclusive Prosperity Act introduced in 2012 and 2015, there would still be $220 billion generated per year. With a handsome sum like $220 billion, we could also look at funding broad social programs like free universal healthcare or free universal college education, which, as the Movement for Black Lives has suggested, would disproportionately benefit Black Americans, and could be part of a reparations portfolio. We could take a chunk of that money and buy land for Natives: land to which we actually have full property rights. In short, we could begin to balance out the institutional white supremacy that has siphoned wealth away from us for generations.
Philanthropy and finance hold immense wealth and influence across society, and both sectors have the means to facilitate transformative changes in the lives of Black and Indigenous people today. Reparations are the ultimate way to build power in communities from which wealth has been stolen, a major step toward decolonization. The sectors of philanthropy and finance must interrogate our complacency and embrace the risk of leaving behind our old ways—leading the way for the government finally to follow suit.
Edgar Villanueva is the author of “Decolonizing Wealth: Indigenous Wisdom to Heal Divides and Restore Balance” and the founder of Liberated Capital, a philanthropic initiative designed to practice the values of reciprocity and equity outlined in the book.