How is Prosperity Now working to address wealth inequality?

Written by: Troy Price

Date: February 20, 2018

Editor’s note: This post is part of an ongoing series of posts featuring NCRP nonprofit members.

Prosperity Now logoThe classic American dream comes with a lot of promises. Things like going to college, owning a home and saving for retirement. All this and more is available to those who buckle down, work hard and save as they go.

Most of us know this “dream” is really a fantasy for millions of people in America. The unequal distribution of wealth in this country keeps those with the most access to financial resources on top, and those shut off doomed to barely get by. The top one percent of Americans holds 39 percent of the nation’s wealth, while the bottom 90 percent only holds 23 percent.

Prosperity Now has been shouting about this injustice for almost 40 years. The organization, formerly known as the Corporation for Enterprise Development, has been picking up steam as wealth inequality has exploded into an issue of national importance. Between its 2017 rebrand and a host of tried-and-true wealth-building projects targeting low income Americans and people of color, Prosperity Now is a full-blown economic justice powerhouse.

But the power lies in using many of the same tools and strategies that have worked for decades, which isn’t something philanthropy seems too keen on funding. Instead of parceling out grants for new projects every few years, what if foundations supported projects that not only have a long track record of success but also continue to work today?

They might not be new and sexy, but things like the coordination and support of a 1,600-member community tax preparation network can transform the financial security of a household. Located in community centers, schools and libraries across the country, this network of volunteers helps low income families file their taxes and apply for money-savers like the Earned Income Tax Credit and Child Tax Credit, all for free.

Prosperity Now mobilized this group of preparers to restore funding for the Volunteer Income Tax Assistance program in the most recent Congress – a significant feat. Americans earning under $54,000, disabled Americans and limited English speakers all benefit from the service. To ensure volunteers are maximizing their time with these groups, Prosperity Now has a host of toolkits and guides advising preparers on everything from broaching the savings conversation to navigating software changes.

That’s not to say there aren’t new ventures too. Just this month, Prosperity Now released its latest Scorecard, a comprehensive look at American financial wellbeing across the country that’s easily sortable by topic. Two recent publications, The Ever Growing Gap and The Road to Zero Wealth, demonstrated how it would take centuries to equalize wealth disparities between white Americans and Americans of color without concerted policy actions. The Racial Wealth Divide project invests in the expansion of policies to reduce this divide and in the capacity-building of organizations of color to lead this effort.

Partnering with other nonprofits has always been an area of particular focus. Whether in health care, affordable housing, education or social services, Prosperity Now has made inroads to integrate financial services into the work these groups are already doing as a means to increase impact and financial security.

One large housing organization adopted a children’s savings account program after serving one generation of families, only to have a second and then a third eventually appear at their door no more financially stable than their grandparents. Aside from children’s savings accounts, Prosperity Now also has highly interactive guidebooks on integrating financial capability and one-on-one financial coaching.

When you believe the main thing distinguishing the wealthy from the poor is not ability but opportunity, you find ways to meet people where they are. That’s why Prosperity Now is also trying to build relationships with corporate social responsibility leaders – to work with institutions that serve significant portions of low income Americans, particularly those of color.

The case for doing so is relatively simple: Building the financial security of low income workers is good for business. Henry Ford famously paid his employees competitive wages not because of altruism, but because he wanted someone to buy his cars. The argument remains the same today.

That said, philanthropy still comprises roughly two-thirds of Prosperity Now’s funding. The rest is government contracts with the Consumer Financial Protection Bureau, Health and Human Services and the Treasury Department, but contract renewal isn’t guaranteed. Foundations and individual donors are the ones who drive the resources for Prosperity Now’s work.

Currently, only one out of Prosperity Now’s 70-odd grants provides three years of flexible funding. As much effort as it has put into securing financial viability for those who need it most, Prosperity Now is owed long term security of its own. We know what they do works. We know what they advocate could transform. So, what are we waiting for?

Troy Price is NCRP’s membership and fundraising intern. Follow @NCRP on Twitter.