There's no magic bullet that will rapidly narrow then close the racial wealth gap, especially when so many people fail to accept — let alone work toward eliminating — asset and wage disparities.
The asset gap actually far exceeds wage disparities across races. Income inequality, housing policies, limited educational opportunities and a lack of support structures all contribute to the racial wealth gap.
So, can $100 make a difference?
Maybe.
When $100 is deposited in a college student's account on the condition that the student must learn how to confidently navigate investment opportunities on Wall Street and beyond, that $100 has great potential. In fact, it could become a game-changer.
During a recent event held at Ashe' Power House Theater on Oretha Castle Haley Boulevard in New Orleans, Entergy New Orleans, Single Stop and Stackwell Capital announced a program titled "Power of Prosperity" that they will launch at three local HBCUs (Historically Black Colleges and Universities) — Dillard University, Southern University New Orleans and Xavier University of Louisiana.
Dillard University Executive Vice President for Student Success Ceeon D. Quiett Smith (left), Suuthern University of New Orleans Chancellor James Ammons (center) and Xavier University of Louisiana President Reynold Verret (right) share a laugh during an Entergy New Orleans announcement about a "Power of Prosperity" program to help students at the three HBCUs close the racial wealth gap. (November 2023)
Entergy is providing $700,000 to the three HBCUs to support 1,500 of their students. The money won't be spread equally among the three universities, however. Each institution's share depends on how many freshmen and first-generation college transfer students it enrolls.
Students chosen to participate will have accounts with Stackwell, an investment firm that specifically aims to close the racial wealth gap by providing the Black community with investment tools and guidance.
Single Stop, a national nonprofit that connects qualifying persons and families with government resources and benefit programs designed to lift people out of poverty, will provide access to additional potential resources.
Participating students will get financial training and investment market workshops designed for this group of HBCU students.
- Entergy New Orleans CEO Deanna Rodriquez, far left, listens as Southern University of New Orleans Chancellor James Ammons expresses delight with the announcement of a pilot program, "Power of Prosperity," aimed at helping select students at three New Orleans HBCUs close the racial wealth gap. (November 2023)
Like any good program, there are requirements. Participants must be at least 18 years old, a U.S. citizen and an entering freshman or first-year transfer student. Each institution will make sure qualifying students know about this opportunity.
Once students get their $100Â stake, they're free to invest it however they choose. That's where they begin to learn about financial literacy and closing the wealth gap.
The idea is to teach them how their choices affect their current and long-term financial health — and wealth — and how they can help close the racial wealth gap.
The one-year program will launch in January. Only enrolled "Prosperity" students can participate in the three in-person workshops and the four virtual workshops provided by Stackwell.
Participating students will learn what to do to achieve financial wellness, the basics of personal finance and how to invest. Instead of Monopoly money, however, they'll be investing real dollars.
Their own real dollars.
The market goes up and down, so there's risk. But the certainty of a savings account versus the potential of investing can be big.
A $100 savings deposit earning 2% annual interest will earn $2 in one year with no additional contributions. $100 invested in the market and earning a 10% return will grow by $10 with no additional investment.
But, if a qualifying student added $10 per month, a sound investment could grow even faster. If the same student added $100 a month for 40 years, with the same 10% return on investment, that student would have roughly $535,000.
Anyone out there wishing they had stashed $100 a month for 40 years under the direction and guidance of someone with sound financial and market experience?
Now, think about the additional benefit of working with a Single Stop screener who can identify federal and state program eligibility in as little as 15 minutes.
That's the kind of synergy that the Power of Prosperity program hopes will produce tangible results — and a step toward closing those gaps.
Deanna Rodriquez, Entergy New Orleans CEO, diplomatically asked the Dillard, SUNO and Xavier leaders on the Ashé stage if they would be tracking the progress of the students, clearly indicating that "yes" would be the right answer.
This is a pilot program for Entergy, but the company hopes to see it spread to other institutions in the communities that the utility serves.
If the program catches on, our community will gain up to 1,500 Black students who are significantly wiser and on their way to being significantly wealthier — a benefit for the entire community and a step toward closing the asset gap.
Hopefully, other companies will follow Entergy's lead in recognizing that financially sophisticated college graduates with growing wealth are far better customers and employees than young people uncertain how far they can stretch their next paycheck.
