STEP SEVEN

Repair

Collectively America’s foundations have more than $800 billion in assets. PwC anticipates that global Assets under Management (AuM) will almost double in size by 2025, from $84.9 trillion in 2016 to $111.2 trillion by 2020, and then again to $145.4 trillion by 2025.¹ That’s a lot of wealth, and it is wealth that was made on the backs of Natives and African Americans and low-wage workers, following the directives of colonization: divide, control, and exploit. Our peoples and our lands were exploited, over generations, over centuries, and ongoing.

Yet despite our role in creating that wealth, white supremacy continues to deny us access to it. We are demeaned for our lack of resources and called lazy. We must jump through hoops and prove ourselves worthy to get a piece of it in the form of loans or grants. As I’ve shown, of the fairly insignificant 5 percent that is annually paid out of those $800 billion held by foundations, the little bit of funding specifically earmarked to support people of color has actually been shrinking.²

Phillip Jackson from the Black Star Project in Chicago had some stern words for foundations: “These guys will lean back in their ivory towers, in their luxury corporate suites while the blood of Black children is running in the streets of Chicago. I told them, ‘You guys are something! You’re funding classical music, you’re funding impressionistic art . . . and Black children are dying right down the street from where you are.’” He analyzed the grantmaking of the MacArthur Foundation, the largest funder in Chicago. “They have $7 billion in assets, and follow the 5 percent payout rule. Out of the $57 million that they give in Chicago, by their own records—I used their own information from their website—only $341,000 went to Black-led, Black-serving organizations.”³ Jackson led a “one-man crusade” to make MacArthur pay attention to the community where it was based, and his courage is commendable, but we shouldn’t have to count on community members being so fearless. The commitment to repair should come from the side with the wealth and the power it confers.

As I’ve noted, loans, venture capital, municipal bonds, and other investments are also smaller in size, harder to get, and often are of poorer quality or higher risk when they go to people of color. And despite the evolution of ethical finance or impact finance, just one of every five dollars under professional financial management is invested following socially ethical strategies,⁴ which is likewise no guarantee that people of color will gain access to it.

Since the wealth was extracted from our resources and our work, it is understandable that we’re a little frustrated and impatient with institutions of wealth that evaluate our worthiness and risk potential as recipients and then give crumbs.

Reparations are due.

Using money as medicine in its most powerful, direct form means we use it to heal the racial wealth gap. Decolonizing wealth is, at its essence, about closing the racial wealth gap. Poverty is the product of public policy and theft, facilitated by white supremacy.

There’s an important distinction being made in the new conversations about reparations—we’re not just talking about making up for the crimes of the past, for the near genocide of Native Americans 500 to 200 years ago when the settlers first arrived and spread over the land, or for the slave trade and slavery. We’re talking about layers and layers of trauma caused by white supremacist exploitation. We’re talking about Jim Crow. We’re talking about the exclusions built into the New Deal that disadvantaged people of color by not counting certain professions worthy of benefits (such as farmworkers and domestic workers). We’re talking about white boarding schools that ripped Native American families apart and stamped out the surviving culture less than a hundred years ago under the motto “Kill the Indian, Save the Man.” We’re talking about how the benefits of the G.I. Bill were racialized. We’re talking about redlining practices. We’re talking about the elite universities of this country being built with profits from slavery and how students and faculty of color still feel excluded today. We’re talking about the criminal justice system’s hugely disproportionate impact on communities of color. We’re talking about Native Americans’ unemployment rates being 10 times the national average. We’re talking about immigration policies dividing parents from their children right now. We’re talking about the violence and exploitation that have impacted four out of five Native women. We’re talking about the images in the media that constantly criminalize people of color. We’re talking about the lack of police accountability for the killing of unarmed Native and Black men and women. We’re talking about the inequality in bank loans and venture capital that impact people of color. Above all, we’re talking about how all these—and many other events and policies and cultural practices—have worked together to keep wealth and well-being disproportionately concentrated in white communities.

As Richard F. America of Georgetown University has said, “We want to correct a current, not a past, injustice. The current injustice is that the top 30 percent of the income distribution, overwhelmingly White, enjoys this $5 to $10 trillion unjust enrichment.”⁵ The writer Ta-Nehisi Coates has also written eloquently on the subject of reparations:

The wealth gap merely puts a number on something we feel but cannot say—that American prosperity was ill-gotten and selective in its distribution. What is needed is an airing of family secrets, a settling with old ghosts. What is needed is a healing of the American psyche and the banishment of white guilt. What I’m talking about is more than recompense for past injustices—more than a handout, a payoff, hush money, or a reluctant bribe. What I’m talking about is a national reckoning that would lead to spiritual renewal.⁶

So what could the institutions along the loans-to-gifts spectrum do to make and support reparations, in concrete terms?

Philanthropy, as the sector most ostensibly responsible for healing, could and should lead the way. The institutions of philanthropy as a whole could take 10 percent of their assets—10 percent tithed from each foundation in existence—and establish a trust fund to which Native Americans and African Americans could apply for grants for various asset-building projects, such as home ownership, further 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. No specifications around how that money is spent, no reporting. No strings attached. Right now.

What if traditional funding mechanisms were replaced by the living resource system approach outlined by my colleagues at Movement Net Lab?

A living resource system provides a relationship-based approach to resources: resources are identified, linked, moved, supported, and restructured by everyone in the network so that they fit the dynamic nature of networked movements. Resources need to be placed in funding pools where activists can be central to the decision-making process, and funds need to be structured so they can flow to the emerging landscape of self-organized actions rather than just through formal, pre-existing organizations. . . . Funders can have much greater impact if they know how to support with greater precision at each moment, shifting and adapting in real time as the moment evolves. . . .⁷

As early examples of the model, they mention Occupy Sandy—where folks set up Amazon wedding registries that identified needed items that supporters anywhere on earth could purchase to be delivered directly to sites hit by the hurricane—and the Accomplices on Demand network, non-Black people in the Boston area who support Black people’s dignity by making their resources, skills, and rolodexes available, and by engaging with people who look like them in antiracist conversations.

Philanthropy and social and ethical finance could also lead the charge in establishing the foundation for what Professor William A. Darity, Jr., of Duke University has called the “Baby Bonds proposal”—although he’s actually not talking about a bond; it’s more like a trust fund. It would be a publicly provided trust fund given to each newborn child, but the amount of the fund would vary based on the wealth of the child’s family. Bill Gates’s 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. This would involve no race-based or heritage-based eligibility but would obviously address the wealth gap for the upcoming and future generations.⁸

A true commitment from the sector of finance to this plan could come in the form of the financial transaction tax (FTT). 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. An FTT of 0.25 percent—$1 on every $400 of stock traded—would generate hundreds of billions of dollars. Only the top 10 percent of American households own more than $20,000 in stocks directly (directly, as opposed to their pensions, etc., being invested in the market), so it would be this most affluent community for whom the tax of trading activity would even be perceptible. Even with a more conservative rate of tax, such as what was proposed in the Inclusive Prosperity Act introduced in the U.S. House of Representatives in 2012 and the U.S. Senate in 2015 (0.5 percent for all stock transactions, 0.1 percent for all bond transactions, and 0.005 percent on the notional value of all derivative trades), there would still be $220 billion generated per year, according to researchers.⁹

With a handsome sum like $220 billion, we could also look at funding broad social programs like free universal health care or free universal college education, which, as the Movement for Black Lives has suggested, would disproportionately benefit African Americans and could be part of a reparations portfolio. We could also take a chunk of that money and buy land for Natives: land to which we actually have full property rights. (Reservations are held “in trust” by the federal government. The economist Hernando de Soto has called it “dead capital” because we can’t put it to use by selling it, buying more to take advantage of economies of scale, or borrowing against it.¹⁰)

In his forthcoming book From Here to Equality, coauthored with his wife, Kirsten Mullen, Professor Darity states that a reparations program should accomplish three things in order to provide healing: acknowledgement, restitution, and closure.

Acknowledgement involves the recognition on the part of the beneficiaries of the social injustice that’s in question; an acknowledgement on the part of the beneficiaries of that social injustice that there has been a wrong committed and that there must be some form of repair to be provided to the folks who are the victims of that injustice. Restitution constitutes the actual program that’s enacted to undertake that form of repair. Closure constitutes the acknowledgement on the part of the victimized community that they have received a satisfactory act of compensation from the victimizers, and that they have no reason to request anything that’s specifically for their group in the future, unless there’s a new wave of injustices.¹¹

It’s the most powerful commitment that can be made to decolonizing wealth and healing our country. Reparations are the ultimate way to build power in exploited communities. They are the ultimate way to use money as medicine. The institutions of philanthropy and finance can take a giant leap forward and make a commitment, leading the way for government to finally follow suit.

What if foundations, banks, investors, and other institutions controlling wealth could imagine they had no history and no legacy? What if we imagined it was Day One, and our mission is to build the best organization and the best model to achieve everyone’s well-being? What if we could be unencumbered by “the way it’s done” and liberated to design ourselves from scratch? What if we could use money as medicine? What if we could liberate money to be used as a tool of love?

Yeah, but what if we could?