Last year, the Z. Smith Reynolds Foundation shifted the focus of its grantmaking in the Community Economic Development portfolio toward narrowing the racial and gender wealth gaps in North Carolina through the support of equitable and sustainable economic development efforts that create pathways to build, retain and transfer wealth to the next generation.
As an early step in this new commitment, the Foundation commissioned the Corporation for Enterprise Development (CFED) to create profiles for Charlotte, Durham and Winston-Salem to better understand the wealth gap in North Carolina, some of its contributing factors, and what specific communities are doing to financially educate, protect and empower residents to build a more prosperous future. CFED looked at how these three cities stacked up in terms of asset poverty; in other words, how much of a financial cushion a household has to weather a crisis such as a job loss or a medical emergency. A household is considered asset poor if it has insufficient net worth to support itself at the federal poverty level for three months in the absence of income.
Based on CFED's findings:
36% of Charlotte households live in asset poverty; 50% of households of color in Charlotte are asset poor.
35% of Durham households live in asset poverty; 48.8% of households of color in Durham County are asset poor.
39% of Winston-Salem households live in asset poverty; 53.5% of households of color in Winston-Salem are asset poor.
This runs parallel to CFED's recent release of it 2014 Assets & Opportunities national scorecard. The scorecard examines assets, poverty and the financial security of families in all 50 states.
North Carolina ranks 46th in the country in terms of CFED's overall assessment.
CFED also reported that 52% of North Carolina households live in liquid asset poverty. Liquid asset poverty is a measure of the liquid savings households have to cover basic expenses for three months if they experience a sudden job loss, a medical emergency or another financial crisis leading to a loss of stable income.
Interestingly, North Carolina ranks 11th in the U.S. in terms of its adoption of policies to address building and protecting assets in five issue areas including: financial assets and income; businesses and jobs; housing and homeownership; health care; and education.
So what does this mean if North Carolina ranks 46th in regards to our overall protection and accumulation of assets, but we come out much stronger on the policy side? Perhaps we do not have the infrastructure in place to help residents in North Carolina create more pathways to financial security or a deep disconnect exists between the policies we have in place and the solutions we are implementing. This is a conversation we need to continue in order to foster the economic well-being of the people of this state and change our ranking from 46th to a number much lower.
Download a PDF of North Carolina's profile: http://scorecard.assetsandopportunity.org/2014/report/state-profile