In the U.S. alone, the widening racial wealth gap is estimated to cost the country up to $1.5 trillion in economic growth by 2028. To address the disparity, Echoing Green and the Global Alliance for Social Entrepreneurship have released a new report that focuses on solutions.
Innovating for Equity: Unlocking Value for Communities and Businesses outlines pathways to elevate economic growth and promote economic stability while highlighting social innovators hard at work addressing the racial wealth gap. The report features case studies of those social innovators who have successfully partnered with corporations and governments, providing key lessons on how to drive value creation by addressing systemic economic exclusion. These leaders are scaling solutions in ways that align social value with commercial opportunity.
Since its inception in 1987, global nonprofit Echoing Green has invested more than $50 million dollars in its Fellows, providing seed funding and leadership development to social entrepreneurs advancing racial justice in education, criminal reform, technology, climate and health care.
SEE Change recently spoke with Liza Mueller, vice president of thought leadership at Echoing Green about the new report. We discuss the proven pathways for collaboration between social innovators from marginalized communities, governments and companies and how these collaborations offer untapped opportunities within the global economy.
Tell us about Echoing Green and how its Fellows are playing a part in tackling social challenges
Since its founding more than 35 years ago, Echoing Green has invested more than $54 million dollars in Fellows, providing seed funding and leadership development to social entrepreneurs advancing racial justice in education, criminal justice reform, technology, climate, and health care.
Can you briefly describe the severity of the racial wealth gap and its impact?
The racial wealth gap is a complex issue with wide-reaching implications across social justice issues. Achieving a more equitable distribution of wealth is not only a moral imperative that would improve equality, health, and social cohesion worldwide — but also a strategic economic growth opportunity. In the U.S. alone, the widening racial wealth gap is estimated to cost up to $1.5 trillion in economic growth by 2028. This translates to a cap on GDP growth of 6%.
Your recent report addresses this issue head-on, offering solutions. At the heart is the concept of collaboration.
In our new report, Innovating for Equity: Unlocking Value for Communities and Businesses, we outline the tremendous opportunity for corporations, policymakers, and social innovators to meaningfully partner and drive system-wide transformation. Our research and experience working with social innovators illuminates untapped solutions, markets, and talent that — if the private sector and the social sector can partner to scale — can produce significant outcomes towards achieving that redistribution of wealth while expanding economic potential.
What’s needed is the commitment from these stakeholders to diversify and enrich their connections with ethnically and racially marginalized communities. The report outlines six case studies across various industries that demonstrate how to implement sustainable changes.
The case studies illustrate three Pathways representing a socially innovative approach to value creation. Can you elaborate?
Expanding Markets centers on social innovators who are providing products and services that better meet the needs of communities and geographic contexts. ‘Last mile’ delivery models empower local asset owners and provide access to new customer bases – from Black and Latinx neighborhoods in U.S. cities to smallholder farmers from Nigerian and Kenyan ethnic minority groups.
Unlocking Talent spotlights social innovators focused on creating more equitable hiring practices. This approach highlights social innovations that challenge historic models of assessing candidate risk and potential, reshape employment opportunities at all levels, and remove barriers to onboarding high-performing employees.
Broadening Networks focuses on social innovators building more inclusive and diverse supplier ecosystems. From digital libraries for Indigenous art to platforms for Afro-Brazilian products, social innovators are redefining who benefits and is represented in global business networks.
Can you provide examples of how those Pathways were an effective approach?
Two innovators in different geographic contexts are designing delivery models tailored to serve the needs of local entrepreneurs and businesses, providing connection points for investment in areas valued by the communities to better operate businesses and grow community wealth.
Jehiel Oliver, Hello Tractor
The challenge: African smallholder farmers typically rent out tractors through fractured, informal equipment networks and lack the tracking and management software that allows for lower rental fees and effective control of fleets to foster impactful growth.
The solution: Jehiel Oliver, an Echoing Green Fellow, saw that global agricultural equipment multinationals did not understand the local context in Nigeria and Kenya and were missing an opportunity.
With insight from smallholder farmers, Oliver developed a tractor sharing app — Hello Tractor — that helps farmers own, manage, hire out, and track equipment. Through Hello Tractor, smallholder farmers have access to local community members hired as employees to provide technical support and insight into local market needs. Hello Tractor also provides financing for booking agents to become business operators who buy their own tractors and rent them out. The organization has been so successful that it’s expanding to other African and Asian markets.
Donnel Baird, BlocPower
The challenge: In the U.S., residential buildings in neglected urban neighborhoods are the second highest polluters in low-income Black and Latinx communities. While these communities would benefit from green retrofitting of buildings, they are often left with products and services that are poorly tailored for their contexts. Residents and owners are often deemed ineligible for the requisite financial products, which are tailored to energy efficiency and amenities upgrades for real estate in affluent neighborhoods.
The solution: BlocPower, led by Echoing Green Fellow Donnel Baird, uses proprietary software and data modeling to comprehensively analyze the electrification potential for buildings nationwide. BlocPower provides accessible solutions to excluded asset owners in communities where existing financial instruments do not fit their needs.