A coalition of more than 40 institutions working to create a more equitable Minneapolis-St. Paul, announced investments of more than $900 million Tuesday to expand wealth-building opportunities across the region.
GroundBreak’s effort is focused on encouraging Black homeowners, entrepreneurs, and commercial developers. The coalition’s goal is to use the initial investment to mobilize $5.3 billion to build Black wealth over a decade.
GroundBreak, launched in May 2022, is working to change how capital flows within the region and allow systematically disadvantaged communities the opportunity to build generational wealth.
Black Minnesotans face some of the nation’s starkest wealth disparities, GroundBreak said. According to recent data, the average income gap between white households compared to Black households is about $46,500 more per year when looking at the middle quintile of income distribution. That disparity is sixth-worst in the country.
Jen Ford Reedy, president of the Bush Foundation, told Sahan Journal the nearly $1 billion investment will help “unlock” another $4 billion in private capital that could help people buy houses or start businesses.
“The biggest part of what GroundBreak is about is making money that’s already in the system, money that already is in banks, do more good in the communities,” Ford Reedy said.
Before its formal announcement of the effort, the coalition released a report outlining its progress and detailing its early commitment of $926.75 million for financial tools and products expected to be availableby the end of 2024.
“Today marks an important step forward in our work to create a more wholly just, equitable, and abundant Twin Cities,” said Tonya Allen, president of the McKnight Foundation, and a founder of the coalition. “GroundBreak is harnessing the collective power and abundance of our communities, leaders, and institutions to rewrite the narrative and help create a region where all residents have the opportunity to thrive.”
Ford Reedy said members of the coalition are pledging money to banks as a guarantee that allows them to more easily make loans for people looking to buy homes or start businesses.
“Our charge is to make the financial system work for everyone. We want anyone seeking to buy a home or start a business to get the support they need for their dream to become a reality,” Ford Reedy said. “This is a big, broad, cross-sector effort. It will take a lot of time and commitment from a lot of people. The burden is on institutions with capital to put that money to work in ways that help more good happen for more people.”
Institutions making early financial commitments include Bremer Bank, Bush Foundation, GHR Foundation, Huntington Bank, M.A. Mortenson Companies Inc. Margaret A. Cargill Philanthropies, McKnight Foundation, Pohlad Family Foundation, Securian Financial and U.S. Bank.
Included in the investments is approximately $175 million in state funding for first generation home buyers.
Minnesota Housing mortgage lending can also be harnessed to help out GroundBreak.
Private financial commitments will be spread across three-to-10-year terms, and the coalition will continue its work to secure capital investments from state and national sources.