Casey Launches Initiative in the South to Reduce Debt for Families of Color

The Annie E. Casey Foun­da­tion, via the South­ern Part­ner­ship to Reduce Debt, has award­ed $580,000 in grants to sev­en part­ner­ships work­ing to reduce house­hold debt in com­mu­ni­ties of col­or through­out the South.

Awardees include:

• Alaba­ma Appleseed
• The Arkansas Com­mu­ni­ty Institute
• Louisiana Apple­seed
• Unit­ed Way of Met­ro­pol­i­tan Nashville
• North Car­oli­na Jus­tice Center
• South Car­oli­na Apple­seed Legal Jus­tice Center
• Faith in Texas

Over the next 12 months, the awardees will part­ner with pri­vate and pub­lic enti­ties to explore three types of debt and devel­op strate­gies that aim to lessen the impact of this debt on com­mu­ni­ties of col­or. The three types of debt that the groups will be focus­ing on are: med­ical bills and hos­pi­tal fees; high-cost con­sumer prod­ucts and ser­vices such as pay­day loans and rent-to-own agree­ments; and crim­i­nal and civ­il judi­cial fines and fees.

“We want these ser­vices to reach the folks who are impact­ed the most — and for us, that meant look­ing for orga­ni­za­tions of col­or and oth­er groups that have deep roots in the com­mu­ni­ty,” Don Bay­lor Jr., a senior asso­ciate at the Foundation.

When com­pared to white fam­i­lies, African-Amer­i­can and Lati­no fam­i­lies are far more like­ly to encounter preda­to­ry lend­ing prac­tices, face dif­fi­cul­ties repay­ing loans and have zero, or neg­a­tive, net worth, accord­ing to research. Stag­ger­ing racial dis­par­i­ties in America’s crim­i­nal jus­tice sys­tem mean that peo­ple of col­or are also more like­ly to face court-man­dat­ed fines, which munic­i­pal­i­ties increas­ing­ly use to gen­er­ate rev­enue. This ​“polic­ing for prof­it” mod­el often traps low-income peo­ple of col­or in a hard-to-escape cycle of debt.

This sce­nario is par­tic­u­lar­ly true — and par­tic­u­lar­ly harsh — in the South.

A com­bi­na­tion of fac­tors — includ­ing high­er-than-aver­age rates of pover­ty, house­hold debt and income inequal­i­ty as well as per­sis­tent racial seg­re­ga­tion and poor­er edu­ca­tion­al out­comes — make the region the worst in the nation when it comes to eco­nom­ic mobil­i­ty. Such hur­dles can pre­vent fam­i­lies of col­or in the South from work­ing toward and achiev­ing finan­cial sta­bil­i­ty.

As part of the Foundation’s ini­tia­tive, awardees will par­tic­i­pate in a peer learn­ing exchange to share lessons and best prac­tices over the next year. They will also receive tech­ni­cal assis­tance on research, pol­i­cy and legal analy­sis, and coali­tion build­ing from Casey’s nation­al part­ners in the finan­cial ser­vices field.

“These sev­en part­ner­ships have an impres­sive mix of lead­ers at the table, all of whom under­stand the bur­den of debt and oth­er issues sur­round­ing the racial-eth­nic wealth gap,” says Bay­lor. ​“We are excit­ed to sup­port the strong work that these part­ners are already doing on the ground, and we look for­ward to see­ing what they’re able to accom­plish in the year ahead.”

Learn more about the racial wealth gap