The Minnesota House Select Committee on Racial Justice offered a comprehensive set of strategies to close the estimated $287 billion economic loss experienced by ALANA (African Latino Asian and Native American) communities in Minnesota, reflected in gaps in income, business revenue, housing, education and life time earnings.
The ALANA Investment Equity Tracker and Equity Ratios presented below will help analyze investment decisions within the context of these huge economic disparities – magnified by the Covid pandemic and the aftermath of civil unrest. This is a tool to assess the nature and scope of investments to address the large racial disparity gaps experienced by the ALANA (African Latino Asian and Native American) communities.
Embedded in each of these equity tools – for economic development, education and housing – there is a theory of change.
Economic Development
In the area of economic development to address the huge racial disparities we need an economic development infrastructure available for every ALANA community which includes the following: Capital (loan, grant, equity and alternative finance), land banks/land trusts, business incubators/makerspaces, cultural destination tools, loan guarantee funds to leverage private investments, public finance tools such as TIF and tax abatements, public contracting goals, community development organizations, workforce skill development pathways and job exchanges, business protections against predatory lenders, affordable business support services (legal, finance, insurance).
In developing and implementing policy, we have to understand that most ALANA businesses are in the micro business category with the average sales in Minnesota, for example, to be around $165,000 compared to the average sales of a million dollars for businesses in Minnesota. Within the micro businesses there are microbusinesses that face barriers of language and experience who require a more “boots on the ground” strategy if we are to serve them well.
Our economic development toolbox should also include tools for ALANA entrepreneurs venturing into large commercial real estate development, as that is a very important avenue for wealth building. Access to land banks, loan guarantees, bond financing, TIF etc are some of these tools that can be very effective as they will help pull more experienced partners to the table.
We can then measure policy efforts to build community wealth by analyzing the scale and scope of investments and the metrics and outcomes that come with that investment. In the Equity Investment Tracker below we cover the range of ALANA enterprises from business to commercial real estate development and can assess what kinds of investments have been made to grow the wealth building capacity of the ALANA communities. The Equity Ratios measure the depth of these investments relative to the size of the population or business for example. To the projects funded we can add Outcome Metrics in terms of jobs and business development, for example. Equity Ratios presented with this tool includes, spending per ALANA worker or business, ALANA percent of bonding dollars relative to percent of the ALANA population, ALANA cultural heritage investment dollars relative to percent of the total ALANA population.
The House Select Committee on Racial Justice also pointed to the need for investments in ALANA cultural assets – against a background of historical neglect or denial of worth of the rich ALANA cultural heritage and traditions. The Equity tracker offers an equity ratio as a first step in this analysis.
Economic Development Tools | Micro Business (less than $100K) (16 %) | Small Business $100k – $1 million (64%) | Small Business > $1 million (20 %) | Commercial Real Estate Development |
Grants | ||||
Loans | ||||
Equity | ||||
Alternative Finance | ||||
Land Trusts/Land Banks | ||||
Business Incubators/Makerspaces | ||||
Loan Guarantees | ||||
TIF | ||||
Tax abatement | ||||
Bonds | ||||
Business Technical Assistance | ||||
Business Protections from predatory lending | ||||
MBE Contracting Goals | ||||
Workforce Certificates – Contracts | ||||
Career Pathways to High Pay Jobs | ||||
Leveraging State Financial Resources | ||||
Equity Ratios | ||||
Spending per ALANA Worker (541448 workers) or percent of spending | ||||
Spending per ALANA Business (47565 businesses in 2012) or percent of spending | ||||
Bonding percent/ALANA population percent (18 percent ALANA population) | ||||
ALANA Cultural Arts Spending/Percentage of ALANA Population |
Education – Prek-12 and Higher Education
The House Select Committee Report of Racial Justice recommendations for both higher education and prek – 12 education calls for a comprehensive strategy that could be categorized in these four areas: affordability/financial, academic support services, cultural intelligence in the learning environment and ALANA power sharing in educational governance; and focus on academic outcomes and career placement especially high paying jobs. A recent study on long terms trends in racial disparities in education in Minnesota by Alessia Leibert of DEED, reinforces the importance of these four categories of factors impacting long term ALANA student wage and career outcomes.
The Equity Investment Tracker Tool above can be used to analyze investments in the four major areas that can greatly improve learning and job outcomes for ALANA youth in Minnesota – an estimated $1.5 trillion dollar asset in terms of potential life time earnings.
preK- 12 | Higher Education | |
Affordability | ||
– State Grant | ||
– Other financial assistance | ||
– ALANA Teachers/ALANA Students | ||
Cultural Intelligence | ||
Graduation Rates | ||
Support Services | ||
ALANA Representation in Power | ||
College Readiness | ||
Spending per ALANA student | ||
Percentage of ALANA /Total Senior Faculty, Staff and Leaders |
Housing/Homeownership
Finally, the House Select Committee on Racial Justice offered recommendations on affordable housing and homeownership which is reflected in the equity tracker. Homeownership and affordable housing plays a very important role in wealth building and so we need to study the closing of the gap in ALANA homeownership and cost burdened households.
Housing | Ownership | Renters |
Affordable Homeownership | ||
Renter Assistance | ||
Fair Housing | ||
Fair Housing Finance | ||
Percent reduction in cost burdened households | ||
Percent increase in ALANA homeownership |
These tools can be a way community groups can analyze investment decisions relative to need and how these investments fit into a larger comprehensive plan for ALANA wealth building.
Thanks for comments received so far from Brett Grant, Voice for Racial Justice, Brett Buckner, OneMN.org, Jane Leonard, Growth & Justice. Please continue to send in your suggestions for improvement of this tool.