Closing the racial wealth gap in the U.S. through anonymous gifting

According to a June 2021 McKinsey report an estimated 19% of Black American families, roughly 3.5 million households, have a negative net worth. An additional 4.3 million Black households have a net worth of less than $10,000. The researchers also found that the Black-White wealth gap exists at every tier of income, affecting the ability to invest and manage debt. For example, though White households below the 30th percentile in wealth are struggling compared to their White peers, they still have 40 times more wealth than similarly situated Black households. After the racial justice uprisings in the summer of 2020, there was an increased public awareness of issues of racial inequality, including the racial wealth gap. Over the past couple years billions of dollars have been committed to advance popular approaches to closing the racial wealth divide including promotion of:  Black homeownership through increased mortgage lending, Black business ownership through increased small business lending, and more financial literacy.  The challenge with these solutions is that they often require Black households to take on more debt, they do not address limited wages or lack of generational wealth, and there is little to no infusion of non-dilutive capital into these households or communities.  Currently, there is no approach to closing the racial wealth gap that centers debt elimination and direct asset transfers to Black households. Nor is there an approach that centers generational wealth transfer as the foundation for wealth accumulation and thus essential to closing the racial wealth gap. In September 2020 the Board of Governors of the Federal Reserve System published a report called, "Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances." In that report the researchers write: “By some estimates bequests and transfers account for at least half of aggregate wealth, have recently averaged 3 percent of total household disposable personal income, and account for more of the racial wealth gap than any other demographic or socioeconomic indicator…One reason wealth-holding is relatively high among White families is they are considerably more likely to have received an inheritance or gift. Another reason is White families report other indicators associated with higher levels of family support. For example, nearly 30 percent of White families report having received an inheritance or gift, compared to about 10 percent of Black families, 7 percent of Hispanic families, and 18 percent of other families. Conditional upon receiving an inheritance or gift, White families also tend to receive larger inheritances.” Nearly 45 million U.S. households will transfer $68.4 trillion in wealth to Gen X and Millennial heirs and charity over the next 25 years. Millennials in particular, are deeply committed to racial justice, but do not have a mechanism to leverage their inheritance towards this effort. If we tap into that generosity and shift $10 trillion toward Black households as gifts over the next 25 years we have a real chance of closing the racial wealth gap.  To leverage these changing demographics of wealth holders Jubilant Money will serve as a simple and celebratory way to help close the Black-white racial wealth gap in the U.S. through anonymous wealth transfer. 

Jubilant Money is a platform designed to address both sides of the net worth equation through crowdfunding debt payoff and facilitating asset transfers through gifts. There are two main users of the platform: 1) Gift Recipients and 2) Gift Givers. Gift Recipients are Black households seeking to grow generational wealth by reducing their debt burden and acquiring assets in an effort to achieve their personal finance goals. Gift Givers are folks with wealth who seek to use their resources to address economic inequality and the racial wealth gap in the U.S. Gift Recipients will create anonymous profiles on Jubilant Money that include their liabilities, current and aspirational assets, and financial goals. They will also be offered financial coaching to support them as they work toward financial wellness. Gift Givers will then be able to browse and search the anonymous profiles and choose a Gift Recipient to help pay down their liabilities and/or transfer assets. Once the Gift Recipient confirms that they would like to receive the gift, then the Jubilant Money team facilitates the anonymous gift exchange and supports each party with the necessary receipts to document the transaction on their taxes. Jubilant Money was created to foster healing from the impacts of an extractive and exploitative economic system on both those who have generational wealth and those who are trying to grow it. More specifically, we are working to close the Black-White racial wealth gap by offering free trauma-informed and culturally relevant financial coaching and resources to Black households and assembling a community of folks around them to help them achieve the financial goals they have set for themselves. Simultaneously, we are supporting wealth holders as they learn about extreme wealth inequality in the U.S. and giving them a means to practice radical generosity by gifting debt payoff and transferring their assets to Black households.  Jubilant Money’s success would help expand our collective social imagination for racial justice.  Our success will also encourage participants to value, identify, and invest in the hopes and goals of Black communities, transforming how participants think about gift giving and who they view as worthy of good gifts. As we celebrate Black families achieving their financial goals, supported by a community of people transferring wealth, the racial wealth gap conversation will move away from an exclusive focus on financial literacy, small business lending, and increasing mortgages, and instead foster wealth equity, financial agency, and freedom from predatory financial systems and products. When Jubilant Money is able to operate at scale it will have a real chance of closing the racial wealth gap.

Jubilant Money’s ultimate goals are to increase the net worth of Black households while also advocating for the creation of systems, policies, and protections that provide access to assets and capital for BIPOC communities.   In the short-term Jubilant Money will provide an accessible and scalable way for any individual to help address the racial wealth gap and provide a much needed resource for Black households who are suffering from low wages, drowning in debt, and unable to secure assets such as real estate to pass on to their families or communities and create generational wealth. Our key indicator of success is the number of the Black households the platform is able to support in increasing their net worth to that of the average White family in the U.S. We will be measuring progress in advancing this indicator by: - the number of Black households on the platform as Gift Recipients - the number of Black households utilizing the free financial coaching and financial resourcing components of the platform - the number of wealth holders using the platform to transfer wealth to Black households - the amount of the money wealth holders transfer on the platform - the number of people accessing the platform to learn about the racial wealth gap and tools for advocacy In the long-term, our hope is that the Jubilant Money can leverage the trend of nearly 45 million U.S. households transferring a total of $68.4 trillion in wealth to Gen X and Millennial heirs and charity over the course of the next 25 years. Millennials in particular are deeply committed to racial justice, but do not have a mechanism to use their inheritance to promote racial equity. If we tap into that generosity and mobilize just $15 trillion of that $68.4 trillion toward Black households as gifts over the next 25 years, we have a real chance of closing the racial wealth gap in our lifetime.