Bridging the Wealth Gap

A year ago, when we launched the Common Future Accelerator and 2023 cohort, we were floored by the sheer volume of organizations looking for support tailored to the needs of BIPOC founders. Among those nearly 300 applicants, CHIP (Changing How Individuals Prosper)—aiming to bridge the financial advisory gap by providing BIPOC individuals with access to seasoned Black and Brown financial professionals—stood out.

In fact, CHIP stood out so much that we realized not only did they not need the programming we offered, but rather than them needing our support, we needed them. The notion of addressing the racial wealth gap by connecting BIPOC women with 1-1 support from financial advisors resonated deeply with us, and our commitment to fostering economic justice.

So, as soon as we could, we signed up as paying customers for CHIP’s services—specifically to provide financial services including financial advisors to the entrepreneurs in our 2023 Accelerator Cohort and the upcoming 2024 Accelerator cohort. 

As I’ve written about previously, I was an entrepreneur before running the Common Future Accelerator. My entrepreneurial journey as an immigrant Latina led me to uncover the many flaws and inequalities that exist in the U.S. economy and entrepreneurial ecosystem, and in large part, it is why I dedicated my career to taking action to change the broken system and support those entrepreneurs so often left behind. It was those lessons learned from my time struggling to fundraise and grow a team as a first-time founder in the tech sector—all while trying to fit in—that led to the design of the Common Future Accelerator. 

It’s also those lessons that drew me to the value proposition of CHIP and made me realize how much future Accelerator participants could benefit from hands-on financial support and education provided by BIPOC individuals, who know firsthand about the challenges and gaps faced by their own communities. 

The National Endowment for Financial Education highlights that financial education is not just about managing money but understanding how to achieve long-term goals. However, according to a study by TIAA, only 28% of African Americans could correctly answer more than half the questions in their standard financial literacy assessment. That number dropped even lower for women and younger individuals. Investopedia found similar results and a clear correlation between lower financial literacy and a greater likelihood that a person would suffer financial stress during the COVID-19 pandemic. 

The racial wealth gap can’t be outright solved by increased income among individuals, but by equipping individuals with financial knowledge and access to increased income streams. That is how we can disrupt systemic barriers and foster generational wealth. According to the National Education Association, “Decreasing racial wealth gaps will take time, but a key factor is ensuring communities of color have access to financial education classes. Having a basic understanding of our financial system, the effects of debt, and how to build wealth, would benefit all students, but especially students of color….Understanding basic economics also prepares [individuals] to be voters with a savvy understanding of how leaders’ decisions affect their pocketbooks.” 

Organizations with financially educated leaders are more likely to survive economic downturns—but beyond that, are able to apply those learnings and build wealth for themselves which is essential for the Black and Brown visionary women and non-binary leaders who are paving the way for economic equity in their communities. Ultimately, this is the gap that CHIP can bridge—empowering the BIPOC women and non-binary leaders 2023 Alumni and those whom we will select as part of our 2024 cohort. We know that individuals who are financially savvy are better equipped to make informed decisions about savings, investments, and debt management.

The Common Future and CHIP partnership stands as a testament to the power of collaboration in addressing pressing social issues. By focusing on the specific needs of BIPOC women and bridging the financial advisory gap, these organizations are taking meaningful steps toward closing the racial wealth gap. As we witness the positive impact of such partnerships, it becomes evident that sustainable change is achievable when visionaries come together with a shared commitment to equity and economic justice.