What’s Next: Citi’s Approach to Addressing the Racial Wealth Gap in the U.S.

April 02, 2024
Edward Skyler, Head of Enterprise Services and Public Affairs

In 2020, Citi and the Citi Foundation launched Action for Racial Equity (ARE), a three-year, $1 billion commitment to pursue a range of business and philanthropic initiatives designed to help close the racial wealth gap in the United States. Our ARE commitment was sparked by a painful moment of crisis in 2020, and we recognized that positive gains in closing the gap can drive positive economic benefits for the national economy more broadly.  

From the beginning, we knew progress on closing the racial wealth gap would require a shift from a short term, time-bound commitment to a longer-term outlook. A third-party assessment of our efforts confirmed this belief and helped focus the work ahead of us.  

While we’ve met and exceeded our initial three-year, $1 billion commitment, we know our work to help close the racial wealth gap is not over. Refreshed insights from Citi GPS show that racial inequalities across business ownership, wages and homeownership continue. Citi is doing its part to maintain momentum in three key ways:  

1) Continuing Business Integration  
We are committing to ongoing support for specialized business units and initiatives to better serve diverse institutions, consumers and communities including:    

  • Our Diverse Financial Institutions Group will continue its industry-leading role in helping to provide access to capital and revenue generating opportunities for Minority Depository Institutions (MDIs) and diverse broker-dealers while leveraging the firm’s expertise to support capacity building.  
  • Citi will continue to identify opportunities to engage with diverse asset managers, identifying firms that may be included on Citi's asset management platforms or in Citi bond issuances.
  • Our Financial Inclusion & Racial Equity team will continue working across business lines to embed inclusion as we simplify banking services, expand access to banking and credit solutions and create curated tools and guidance to help build pathways to wealth.  
  • We will continue efforts to expand the pipeline of diverse suppliers and maintain our position in the Billion Dollar Roundtable (BDR), a list of U.S.-based corporations that voluntarily spend $1 billion or more annually with certified diverse suppliers.

2) Advancing Community Investing Innovation 
Our community investing efforts complement the business integration efforts by incubating new ideas that support financial inclusion and help close the racial wealth gap such as:    

  • The Citi Foundation is funding a new effort with the Financial Health Network to examine innovative ways to promote financial health in the U.S. and is renewing its $50 million community finance initiative.  
  • The Citi Impact Fund uses Citi’s balance sheet to invest in and support “double-bottom-line” companies that solve critical issues for underserved communities, including solutions that provide greater financial resilience. As part of the Impact Fund’s broad sourcing of investments, it seeks to build a pipeline of investment opportunities inclusive of historically undercapitalized founders. The fund also leverages Citi’s business capabilities and expertise to provide post-investment support including banking solutions, networking, visibility, and the potential for pilot strategic integrations to help fuel the growth and success of portfolio companies.
  • We are also continuing to make the Citi Start Saving® platform available to qualified public sector entities including the cities of San Francisco and Los Angeles, and nonprofit organizations like Operation HOPE and Grameen America, to efficiently manage savings programs featuring incentives that help advance and scale financial inclusion for low-income participants.   

3) Deepening Collaboration & Learning 
We recognize the importance of collaborating across sectors and with external partners who are equally as invested in finding solutions that promote economic opportunity.  Accordingly, we will continue sharing our experience and engage in ongoing dialogue with a range of stakeholders to advance mutual learning:  

  • We are engaged in the Office of the Comptroller of the Currency’s Project REACh (Roundtable for Economic Access and Change), which brings together leaders from the banking industry, national civil rights organizations, business and technology to identify and reduce barriers that prevent many communities from economic mobility.   
  • Citi is also continuing our work as a member of the Economic Opportunity Coalition, which aims to align public, private and social sector investments to accelerate economic opportunity in underserved communities.
  • We are continuing our sponsorship of the Fifteen Percent Pledge, an organization which encourages retailers and consumers to further their support of Black-owned businesses. 

This multi-faceted approach reflects the best of what we’ve learned over the years and represents the type of bank we want to be today and in the future: one that leverages the full weight of its resources and expertise to help level the playing field for underserved communities. The progress of the last three years has inspired us for what’s ahead and we look forward to helping build communities that we can all be proud of, defined by equal access and opportunity for all. 

For updates on our progress, click here.

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