Building Trust Among Communities of Color Critical to Enhancing Market Participation
Creating more inclusive markets is critical to building long-term wealth, particularly for people of color, yet the current solutions to close the racial wealth gap are grossly insufficient. Nasdaq recently held its second Purpose Stakeholder Roundtable, bringing together a range of leading voices on investor and community engagement to explore ways in which to make the markets more accessible across race, ethnicity, gender and class.
Held under the Chatham House Rule, roundtable participants acknowledged that there is a general distrust in the financial system among people of color, deeply rooted in the historical exploitation of Black people in the capital markets and broader financial industry. This is a particularly poignant fact, as we remember the centennial of the Tulsa Race Massacre, when a prosperous Black community in Tulsa, Okla., known as the Black Wall Street, was ravaged in a racist attack in a few short hours. Hundreds of residents were killed, and thousands of homes and businesses burned, not only destroying wealth but erasing years of Black success.
Participants noted that there is a stigma around being poor in the U.S., leading people of color –particularly women of color – to be ashamed of their situation and often unwilling or reluctant to start the conversation on building wealth. Even on the opposite end of the spectrum, when people of color have established wealth, a sense of shame often remains because conversations around wealth have historically focused on white men. To help diminish the shame and rebuild trust, it’s clear that we need greater representation of people of color participating in finance. We have to show that creating long-term wealth is possible for everyone, no matter their background.
To build wealth creation avenues for people of color, participants agreed that financial empowerment and knowledge must be easily accessible, localized and culturally relevant. They also underscored the importance of engaging directly with communities of color, connecting with influential cultural role models, as well as financing and developing the necessary cultural and community ground-up infrastructure. By establishing smaller lending circles and cooperatives, we can help foster confidence and familiarity in investing across a range of possibilities and opportunities, including in the capital markets.
We recognize the urgency to enhance engagement with communities of color, and the Nasdaq Foundation is taking swift action to create meaningful change. As we strive to empower a more diverse group of investors and further diversify entrepreneurship, the Nasdaq Foundation has selected 1863 Ventures as the first grantee of its Quarterly Grant Program. 1863 Ventures, an organization on a mission to accelerate Black and Brown entrepreneurs from high potential to high growth, is committed to creating $100 billion of new wealth and economic power through rigorous leadership training and strategic market access. The Foundation’s $100,000 grant will go toward expanding 1863 Ventures’ 3R's Program to help stabilize Black and Brown businesses through leveraged capital, tactical content and structured coaching.
Through these roundtable discussions and through the ongoing work of the Foundation, we believe we’re on the right path to building more inclusive capital markets. While there is much work to be done, we remain relentless in our pursuit to create more equitable opportunities to ensure that people of all backgrounds can achieve their full potential.
Looking ahead, we’re excited to share a research report that Nasdaq initiated with its partners, the Aspen Institute’s Financial Security Program and Commonwealth. The report will serve as a launching board for the Foundation’s future signature program to further its mission, and we look forward to sharing those insights soon.
Nasdaq's call to advance economic progress for all has never been stronger, nor more urgent than it is today.