MacArthur Foundation’s Redlining Practices Help Decimate Black Chicago

MacArthur Awards One-Tenth of 1% of its Grants to Black Organizations in Chicago

Redlining is the practice of denying capital or critical services to targeted communities based on race or ethnic makeup.  Redlining in banking is illegal.  Redlining in insurance is illegal.  Redlining in real estate is illegal.  Redlining in healthcare is illegal.  Redlining in education is illegal.  There is no place in 21^st century America for redlining.  MacArthur Foundation’s Chicago grant-making practices redline Black and Latino communities, which at the very least is immoral and might be illegal.

MacArthur Foundation’s 2015 giving pattern in Chicago, whether intentional or unintentional, essentially redlined Chicago’s Black community.  Right now, as the streets of Chicago drip with the blood of Black children dying from violence, 80 to 90 percent of young Black men in some communities remain jobless and not in school. Black people have been forced out of Chicago neighborhoods with alarming speed in astronomically high numbers and Black children in Chicago’s public schools continue to receive a substandard, third-world-quality education.  Despite these continuing life-limiting situations, MacArthur Foundation made virtually NO grants in the Black community last year!

MacArthur foundation is mandated by U.S. tax law and foundation code to grant and pay out 5% of its $6.5 billion in assets annually, which amounted to about $325 million in program year 2015.  Of the up-to-$325 million MacArthur could have awarded last year in grants (including operating costs), organizations in Chicago received about $56 million.  Chicago’s population is about 33% Black, so I expected that at least one-third of that $56 million granted (about $18 million) would have gone to Black organizations in Chicago.  However, the total amount granted to Black organizations in 2015 was only about $375,000.  (And with nearly 30% of Chicago’s population, Latino organizations received just under $160,000.)

Now the MacArthur Foundation wants to amass and control another $100 million through its newly proposed Benefit Chicago program to “loan” to whichever organizations it chooses.  Unfortunately, last year, it only awarded about one-tenth of 1% of its total grant monies to Black organizations whose primary focus was to serve Black children, Black families and Black communities in Chicago.  Why should anyone believe that this for-profit loan program would be any different?

By awarding only one-tenth of 1% of its grant-making portfolio to Black communities in Chicago, the foundation perpetuates and exacerbates the dire conditions of struggling Black communities primarily on the city’s south and west sides.  WHEN young men are gainfully employed, communities adequately developed, families and parents undergirded and supported, and education invested in wisely, life-quality in struggling Black communities would be immensely improved.  MacArthur’s lack of essential grant-making to Black Chicago has literally forced thousands of Black people out of Chicago by denying them services that high-functioning nonprofits could have provided! About 200,000 Black people have left Chicago since the year 2000, more people than the population in the next largest city in Illinois, Aurora (198,000).

The MacArthur Foundation gave 77% of its 2015 Chicago grant money to organizations downtown! Out of the $56 million granted to Chicago in 2015, the South side only received $4.4 million while the West side received a mere $1.9 million. As Black and Latino communities suffer, more than 60% of the money MacArthur granted on the South Side in 2015 went to the University of Chicago! In fact, MacArthur foundation gave almost 8 times more money to the University of Chicago—an institution with a $7.55 billion endowment—than it gave to all the Black organizations in Chicago combined.  MacArthur’s grant-making helps drive Black people out of Chicago!

Redlining is illegal and evil!  MacArthur is redlining Black Chicago.  The people managing MacArthur Foundation should quickly meet with Black community organizations to correct and realign its giving practices with the severe needs in Black communities and devote an adequate pool of funding to jumpstart significant grant-making in those underserved Chicago communities.  MacArthur must do a better job of bringing value and leadership to the most important issues facing Chicagoans.  Otherwise, isn’t MacArthur’s newly proposed $100 million Benefit Chicago program really just another Benefit “White” Chicago program.

Phillip Jackson

Founder and Executive Director

The Black Star Project

3509 South King Drive

Chicago, Illinois 60653

773.285.9600

May 14, 2016