Philanthropy in the Deep South: Know Your Funding History & Share The Wealth
By: Vichi Jagannathan, Rural Opportunity Institute Co-Founder | 2019 Camelback Ventures Fellow | 2020 Capital Collaborative Alumni Board Member
I first moved to rural Eastern North Carolina in 2011 as a Teach for America corps member. Up until then, I had only lived in cities and suburbs. My parents, both immigrants from India, always stressed the importance of education so I dutifully attended the best educational institutions I could access including Princeton, Stanford, and Yale. However, my first real American history lesson happened when I arrived in Northampton County to my classroom across from a peanut field.
It felt like a blindfold had been ripped off. I had no idea about the long history of strength, resilience, and wisdom rooted in this region. Eastern North Carolina is home to Princeville, the first town in America incorporated by formerly enslaved African Americans following the Civil War. Dr. Martin Luther King, Jr. delivered his “I Have a Dream Speech” at a high school gym in Rocky Mount, N.C. before delivering it in Washington, D.C. And Janice Bryant Howroyd, the first Black woman to own a billion-dollar corporation, is from Tarboro, NC.
However, Eastern N.C. and the community I taught in also struggle with many health, educational, and economic challenges. Despite all of my esteemed schooling, I was led to believe that slavery and racism were over and that the challenges that rural communities in the Deep South face are due to people’s bad choices. However, my personal experience told a very different story, and an honest look at history validated my sense that my students were not to blame for their struggles.
In reality, many of the challenges my students and their families faced are rooted in generational trauma dating back to slavery. In 1860, Eastern North Carolina had among the highest concentration of enslaved Americans in the country, and the trauma of slavery was further perpetuated in this region by segregation, Jim Crow laws, violence like the Wilmington massacre, and systemic racism. Today, the vestiges of many of those oppressive policies and practices persist within the current institutions and serve to uphold and widen racial disparities across many domains including education, health, and wealth-building.
When I helped found Rural Opportunity Institute (ROI) in 2017, our approach was to start with primary research and understanding the true history of the people in our region before jumping to solutions and action. Through months of community engagement with over 300 residents, we arrived at a mission to support the rural Eastern North Carolina community to interrupt the cycle of generational trauma and design innovative solutions for healing and resilience. Since beginning that process, we have been able to build partnerships with schools, law enforcement, the courts, churches, and social services to shift from punitive to restorative responses to community. These early wins are just the first steps in a long process to rebuild trust between public institutions and the community. And this only happened because we began with the truth and were able to confront and acknowledge the negative parts of our history along with the positive.
While the foundations that we receive funding from frequently laud and reward us for our patience and willingness to engage in the difficult process of uncovering the truth about our region’s history, they do not hold themselves to nearly the same standard. The majority of ROI’s funding comes from North Carolina-based family foundations. We are grateful for the support, but when you dig into the history of the wealth that backs us, it becomes clear that much of it was built from the extraction and exploitation of Black people in Eastern North Carolina. And this extraction and exploitation was a large contributor to the same generational trauma we are now seeking funds to heal from.
Unfortunately, Eastern North Carolina is not the only place caught in this painful cycle. Across the Deep South, we see examples of foundations and philanthropists creating complicated grant applications and reporting requirements in order to dole out small sums of money to communities upon whose backs their wealth was built in the first place. Imagine the trauma of applying for funds from a foundation that bears the name of the people that enslaved your ancestors. And then being forced to center the shortcomings of your community in order to convince them that your request is justified. This may sound extreme but it is often the reality for nonprofits in the Deep South, and it has been the reality for ROI since our founding.
In order to truly move towards justice, philanthropy can adopt the following practices:
Learn the history of where their wealth came from;
Change the giving process to repair the harm that was caused to build that wealth;
For the 90-95% of money not given away, realign those investments to repair harm by divesting from entities that continue to extract from and exploit our communities, and investing in assets that build up the communities most harmed in the past.
These steps may sound impossible, but there are already examples of foundations starting to make progress that we can learn from and take even further. For example, a large portion of ROI’s funding comes from Kate B Reynolds Charitable Trust. Kate B Reynolds, for whom the foundation was named, was married to William Neal Reynolds, a younger brother of RJ Reynolds of tobacco fame. William eventually became chairman of RJ Reynolds Tobacco Co. after his older brother passed away. As has been detailed many times, the history of tobacco in the rural South is inseparable from slavery, sharecropping, and the exploitation of Black people. In addition to labor exploitation, tobacco companies also targeted Black people and communities in their marketing, contributing to addiction and poor health outcomes.
In 1947, Kate B Reynolds allocated $5 million in Reynolds stock to improve the quality of life for people with low incomes. Today, the Kate B Reynolds Charitable Trust has $575 million in assets and gives about 5% every year in grants. I recently attended the 75th anniversary celebration for the Trust, fully expecting to hear another surface-level celebration of the Reynolds family’s generosity. However, what I heard instead was a humble admission by the Trust’s President, Dr. Laura Gerald, that it is time for them to confront their history and work to repair the harm that was caused to generate their wealth. Dr. Gerald, a native of Eastern North Carolina, shared the following steps that the Trust has taken in the last several years:
They hired an independent historian to learn the history of Kate B Reynolds’ wealth, beliefs, and actions and educate their staff and board.
They have increased their commitment to giving in rural communities, and to employing program officers who root in communities and build supportive partnerships with grantees.
They are taking steps toward excluding tobacco producers from the range of companies that they invest in and will work to eliminate direct exposure to tobacco companies by the end of 2022.
They are allocating $100 million of their public equity investments in a dedicated strategy designed to invest more heavily in companies that are economically important in North Carolina. This portion of the portfolio holds 10 times more equity in NC-based companies than the funds it replaces and 13 times more in companies that hire more North Carolinians than their peers.
While we cannot change the history of where wealth came from and who it has harmed, we can take responsibility for what was done and commit to radically changing giving practices moving forward to be equitable and trauma-informed. The steps that Dr. Gerald laid out do not immediately repair all the harm that has been caused to our community and others like it, but they do prove that it is well within the power of foundations and philanthropy to do better.
We have a huge opportunity before us. It is estimated that enslaved Black people generated wealth valued at over $3 billion in 1860, which amounts to over $100 billion today. This wealth was captured by captains of industry like RJ Reynolds who then deployed it in ways that often created even more harm and trauma in Black communities. And to date this trauma has not been atoned for.
At ROI, one of our core values is Radical Imagination - Live in the belief that our wildest dreams can and will come true, and be rooted in the history and realities that have proven this to be true. It’s time for philanthropy to radically imagine what it might look like if all of that extracted wealth had been able to stay in the communities where it was built. We’ve seen the incredible damage that $3 billion can inflict over generations. What would $100 billion dollars of investment back into communities like rural Eastern North Carolina – for the purpose of healing and self-determination – mean for all of the systemic challenges we are wrestling with today? We have an opportunity not just to acknowledge and apologize for past harm that’s been caused, but to re-align the tremendous resources at our disposal towards truth, justice, and healing.
This thought leadership piece and others like it can be found in Camelback Ventures' Giving Compass ‘Racial Equity in Philanthropy' e-magazine collection. Check it out!
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The Capital Collaborative by Camelback Ventures works with White funders and social impact investors who want to deepen their individual and organizational commitment to racial and gender equity in philanthropy — but may not know how. You can learn more about how to get involved by submitting an interest form for the Capital Collaborative’s 2023 cohort or signing up for the newsletter.