Chicago, IL, USA
As a social enterprise, CoLiberate USA improves individual financial health through financial education, skill-building, and investment opportunities.
Development & Testing
3-5 years
$3,500,000.00
Last update: October 05, 2023
Within Chicago, IL, wealth inequity is driven by historical oppression, lack of equitable opportunity, and exclusion.
For every $1 of wealth accumulated by white families, people of color (POC) hold just one cent ("The Wealth Gap: Facts," 2022). This stark disparity illustrates the racial wealth gap in the United States and its impact on economic participation. Two key factors influence the ability of POC to engage in their local economies:
- Financial Health: The capacity to spend, save, borrow, and plan to ensure resilience and pursue opportunity.
- Financial Vulnerability: The lack of ability to spend, save, borrow, and plan, resulting in limited resilience and opportunity. (Financial Health Network et al., 2023) In Chicago, financial inequity disproportionately impacts communities of color (COC):
- 23% of Chicago residents are financially vulnerable, 1.5 times the national average.
- Black residents achieve financial health at a rate of 13%, and Latinx residents at 16%, compared to 49% of white residents. (Financial Health Network et al., 2023)
Financial capital, income, and equity inequities disproportionately impact Chicago COC:
“[Minority owned businesses] experience higher loan denial probabilities and pay higher interest rates than white-owned businesses even after controlling for differences in credit-worthiness, and other factors” (Romer, 2022).
“During the COVID-19 pandemic, federal economic recovery investments (e.g. PPP loans) left most business owners of color without help” (Hunt et al., 2021).
“There is a $220 billion annual disparity between Black wages today and what they would be in a scenario of full parity” (Hunt et al., 2021).
“Over the past 30+ years, workers of color have experienced income disparity across all wage categories” (Hunt et al., 2021).
Despite the urgent need, COC are excluded from economic investment. Within Chicago, IL, 51% of West Pullman residents and 54.1% of Roseland residents earn below the area median income (Bink, 2022; Chicago Metropolitan Agency for Planning, 2023). Yet, both communities were excluded from $14,000,000 in Chicago tax dollars designated for community wealth building (Community Wealth Building Initiative, 2022). Many POC entrepreneurs are also excluded from investment opportunities. Around 80% of Black and LatinX entrepreneurs are unable to get access to sufficient equity capital for their ideas, compared with 46% of their White counterparts. The result is an estimated $146 million equity capital gap” (Johnson et al., 2022). This follows a long history of inequitable economic investment within COC (Balta & Balta, 2022)
CoLiberate USA is a social enterprise that improves individual and community financial health through education, skill-building, and investment. We are developing a Regulation A Investment Corporation as a community investment vehicle for a $3,500,000 equity deployment in Roseland and West Pullman over a five-year period. With these funds, we will:
- Develop individualized and community-driven financial health strategies.
- Facilitate collaboratively defined investments that reflect community priorities.
We will eradicate the causes of economic inequity with our three-fold strategy:
Program participants receive tailored, no-cost financial literacy training, onboarding, and coaching based on validated assessments and interviews. Within six months, participants begin improving their financial health, and at least 10% achieve credit readiness within 12 months.
Program staff coach participants to master financial management and investment skills with goal setting and skills practice. Quarterly expert sessions provide mentorship, critique, and best practices. Participants also learn to make reciprocal investments in community initiatives.
The revolving loan fund supplies capital to sustain our business model. As stakeholders become leaders in this community-driven model, they promote engagement and recruitment. The investment vehicle enables crowdfunded:
multifamily housing rehabilitation, as we generate returns for stakeholders with shared equity, joint venture, or share ownership investments.
community business loans, as new businesses repay financing.
Before our 2024 launch, we planned to reach 100 people and graduate 10 from the financial education program within one year. We did not achieve this goal. Our reach was limited to 50 people without community partnerships for promotion. Only 25 people registered for the program. We had to pivot from in-person to digital-only sessions because our partnerships for space reneged on agreements. Ten people maintained engagement to complete training, with only two graduating. We aim to raise $3.5M for equity deployment from LPs, Program Related/Impact Investment, Grants, Donations, and CDFI lending. With this capital, we will achieve four outcomes by 2030:
improve program participant financial literacy,
improve program participant financial management skills,
generate $200,000 in equity for new property owners.
produce 5 - 9% returns on investments for community stakeholders.
We will measure the financial outcomes by counting the equity generated from each property sale and returns on investment produced. The changes in knowledge and skill derived from our program will be assessed by pre/post-assessments.
