To Build Black Wealth, This Regional Regrantor's Initiative Is Directly Funding Individuals
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Nexus COmmunity Partners Staff and Open Road Fund Advisory Committee Members. Photo: Digiemade media
In March 2021, the Bush Foundation announced plans to disburse $100 million to two “community trust funds” to increase the wealth of Black and Native American communities in Minnesota, North and South Dakota, and the 23 Native nations within those areas. As my colleague Dawn Wolfe noted at the time, it was among the largest racial equity funding initiatives in the country, and especially notable since it came from a regional foundation. It also mirrored funders' growing interest in direct cash payments as a way to move people out of poverty.
Seventeen organizations applied for the initiative, and in December 2021, the foundation announced the two recipient “steward organizations” — Nexus Community Partners, a St. Paul, Minnesota-based, Black-led organization committed to creating pathways to equity for communities of color, and the Indigenous-led NDN Collective in Rapid City, South Dakota. Equipped with $50 million apiece, the organizations were tasked with devising wealth-building programs for Black and Indigenous individuals, respectively.
As Nexus Community Partners’ senior director of community wealth-building, Danielle Mkali was deeply attuned to both the challenge at hand — in 2021, the median income of white households in Minnesota was $35,000 more than that of Black households — and funders’ halting efforts to close wealth gaps across the country. “I feel like there ought to be so much more energy around this kind of experimentation in the philanthropic space,” she told me. “But in most cases, that’s not what you see happening.”
Last June, after 18 months of development, Nexus announced the result of its Bush Foundation-funded experimentation — the Open Road Fund, a $50 million, wealth-building community resource for descendants of the Atlantic slave trade living in Minnesota and the Dakotas. Over the following eight years, Nexus would disburse $50,000 to at least 100 individuals annually, each of whom would be asked to create their own wealth-building plan. As 2023 came to a close, it gave $50,000 to each of its first 100 awardees.
Grantmakers aiming to close the racial wealth gap often direct support to organizations addressing distinct issues like systemic community underinvestment, encouraging home ownership or creating opportunities for Black students to enter high-paying STEM fields. Attuned to the transformative potential of direct cash payments, the Bush Foundation adopted an issue-agnostic approach, stipulating that Nexus and the NDN Collective directly fund individuals and empower them to define what wealth-building means for their communities.
With the Open Road Fund poised to open its 2024 application window on Juneteenth (June 19), Mkali has come to appreciate the Bush Foundation’s unconventional guidance. “In community, people often say, ‘Why not just give it [money] directly to people and let them develop their own strategies?” she said. “And in this case, we’re saying that we trust people to do that.”
An expansive definition of Black wealth
Mkali spent 2022 and the first quarter of 2023 building out what became the Open Road Fund in collaboration with its advisory committee, Bush Foundation reps and community members.
Guided by takeaways from this process, she and her team devised a two-phased approach. In the first phase, the fund solicits applications and randomly selects finalists. In phase two, finalists deemed eligible by the fund’s selection committee develop a wealth-building plan across five categories — financial wellbeing, economic power, education, housing, and health and healing. “The plan,” Mkali said, “becomes their agreement with us.”
Plans can include multiple categories. For example, an individual could propose using a portion of the $50,000 toward starting a business (“economic power”) and paying down debt (“financial wellbeing”). Finalists submit plans and once approved, Nexus disburses the funds.
Mkali and her team also wanted to ensure that communities in Minnesota and the Dakotas knew about the fund’s 2023 launch. To this end, Nexus partnered with Oakland, California-based Yates Creative on a marketing strategy, paid for local media placements and sent applications to public libraries. The efforts paid off — over 11,000 individuals submitted applications last year.
Nexus selected the 2023 finalists through a random process using a proprietary computer program. Half of them hailed from the Twin Cities metro area and the other half were from Greater Minnesota and the Dakotas. (As a policy, the fund does not publicly name the finalists.) Finalists began submitting their wealth-building plans in December 2023.
Mkali characterized many of the strategies proposed by last year’s finalists as “mainstream.” Individuals are using money to establish family trusts, build retirement funds and buy homes. But some finalists’ conceptions of Black wealth-building may not immediately comport with conventional wisdom. One grantee, citing the “health and healing” category, will use some of the money to fund a cultural lineage tour with her family. “They’re going to start by going down South to the port where they believed their ancestors came through, and then travel to Ghana,” Mkali said.
For Mkali, this strategy underscored the community’s expansive definition of Black wealth. “Doing our engagement round, we’d ask, ‘What does wealth-building mean to us?’” she said. “And over and over, folks said that our wealth was our health and wellbeing.”
The fund also provides individuals with an array of support services to see that their plans come to fruition. Once the plans are approved, every grantee attends an orientation and goes on to meet with Nexus reps twice a year. If awardees need to alter their plans, they are asked to communicate these changes to the fund’s staff. Individuals can also access community education sessions led by Black financial experts. “We want to make sure people are aware of the experts in our region that can support them as they’re building wealth,” Mkali said.
Tackling unique challenges
As one would expect, Mkali and her team navigated a variety of challenges and opportunities after the Bush Foundation entrusted them with disbursing $50 million directly to individuals.
Nexus staff conducted extensive due diligence to ensure that the infusion didn’t tip the organization to private foundation status, scaled up its grantmaking software to manage the deluge of applications and addressed pushback from some community members who argued the fund should be open to Black individuals who weren’t descendants of the Atlantic slave trade.
As for present-day considerations, Mkali told me that she and her peers at the NDN Collective, which launched its corresponding Collective Abundance Fund last May, are concerned that an individual who receives a large cash grant may lose their public benefits since the money could put them over income limits set by the federal, state or local agency providing the financial assistance.
“Since public benefits can come from different entities, we’ve been making blanket statements [to finalists] like, ‘You should have a plan in place if your public benefits are disrupted,” Mkali said. Moving forward, she anticipates Nexus will have a voice in shaping policy so individuals’ public benefits aren’t jeopardized if they receive a large cash grant.
Mkali’s concerns about preserving Nexus’ public charity status and efficiently managing applications will resonate with leaders whose organizations received an abnormally large gift. On the other hand, I suspect far fewer program managers can relate to other facets of Nexus’ work, such as asking applicants if they are “a descendant of African people who endured the Transatlantic Slave Trade to North America, Central America, South America or the Caribbean.”
Mkali and her team spent a great deal of time thinking about how to address this incredibly sensitive issue. Unfortunately, no amount of preparation could prevent some applicants from coming to terms with “a lot of different feelings that maybe they hadn’t ever confronted before.”
Cognizant that these weren’t isolated incidents, Nexus will provide applicants for 2024’s round with access to mental health providers should they need assistance in grappling with the more fraught aspects of their ancestry. “We’re hoping we can try to heal some of the historic traumas in this region and that the grant can play some small part in that,” Mkali said.
“Learning how to make decisions together”
2024’s application process will feature a few additional alterations. The phase one application “will be a little bit clearer and a little bit shorter,” Mkali said, and unlike 2023, the fund will ask applicants to submit a form of identification and require finalists to submit two letters of support. (Click here for the fund’s extensive FAQ page.)
With June 19 quickly approaching, Mkali is bracing for a substantial increase over last year’s 11,000 applications. “I wouldn’t be surprised if it’s double this year,” she said. As noted, the fund initially awarded 100 grants in 2023, but one grantee subsequently dropped out. As a result, Nexus will fund 101 individuals at $50,000 each in 2024, so the number of individuals supported averages 100 per year.
Nexus is also working with research group Research in Action to evaluate the fund’s impact. In late April, Nexus published its first deliverable, “Open Road Fund Year 1: Mini-Report,” which, among other things, found that the fund’s support enabled awardees to “obtain stability” and inspired them to give back to their communities.
This report is but the tip of the iceberg, as Research in Action plans to track a group of 50 awardees over the next eight years. “We’re hoping that our work can show what it means to be more expansive, community-led and encourage others to experiment,” Mkali said.
This aspiration is a reminder that even the most boundary-pushing experiment has to have an underlying strategy, which, in Nexus' case, was the Bush Foundation’s directive to give cash to individuals and empower community members to define wealth. Throw in Nexus’ thoughtful planning and execution, and its Open Road Fund stands in contrast to other wealth-building efforts, which, while well-intentioned and strategically sound, tend to take a more prescriptive and top-down approach.
“We’re trying to create more abundance in our community and engage more Black folks around learning how to make decisions together,” Mkali said. “And because of their experience, community members will have incredible solutions for closing those wealth gaps that go beyond what even the most innovative funders can achieve.”
