September 12, 2024

Investing to Close the US’s $8 Trillion Racial Wealth Gap

In this piece written for ImpactAlpha, Bridgespan partners Stephanie Kater and Devin Murphy, and contributing authors Simon Stephanos and Andrew Key, discuss ways that patient capital can unlock lost potential in midst of the US racial wealth chasm.

By: Devin Murphy, Stephanie Kater, Andrew Key, Simon Stephanos

Impact Alpha Blog-8-29-24Centuries of policies that privileged white economic mobility while excluding or actively exploiting communities of color have created a racial wealth chasm in the US. Today, the average white household in the US holds six times the wealth of a Black household, five times the wealth of a Latino household, and more than 10 times the wealth of a Native American household. The persistent divide, compounded over time, threatens to lock generations of people of color into a permanent underclass. 

But it doesn’t have to stay that way. 

For every driver of the racial wealth gap, there are ways for patient capital to unlock lost potential. 

“Capital has done a significant amount of harm to communities of color,” says Santhosh Ramdoss of Gary Community Ventures. “To undo that, we need the same capital to become a restorative tool.”

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The authors thank Rebeca Cavalcanti, a manager in the Chicago office of Bain & Company, and Zach Slobig, an editorial director based in Bridgespan's San Francisco office.


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The Bridgespan Group would like to thank the JPB Foundation for its generous and ongoing support of our knowledge creation and sharing work.