Bridging Gaps with the Cadence Racial Equity Fund

In a world where economic disparity often correlates along racial lines, the need for racial equity is more pressing than ever. This conversation is not only a social imperative but also a business necessity. At its core, the Racial Equity Fund initiated by Cadence in collaboration with RBC Global Asset Management (RBC GAM) seeks to address these disparities by focusing on systemic change. This blog post explores how this fund contributes to reducing racial inequity, why it matters, and how other companies can get involved.

Racial Equity as a Social and Business Imperative

Racial equity is about more than just fairness; it's about creating a society where people have equal access to opportunities and resources, regardless of race. Promoting racial equity isn't merely an ethical decision for businesses—it's a smart business move. Studies show that companies with diverse teams outperform those with homogeneous ones, resulting in better financial growth and product innovation.

In today's interconnected world, consumers increasingly expect brands to take a stand on social issues. Aligning corporate strategies with social justice can enhance brand loyalty and attract a broader customer base. Thus, investing in racial equity can lead to both social progress and economic gain.

Understanding the Racial Wealth and Information Gap

The racial wealth gap is a stark reality. Data shows that the median wealth of white families is substantially higher than that of Black and Latinx families. This disparity hinders economic mobility and perpetuates cycles of poverty. However, the wealth gap is not the only barrier; there's also an information gap that limits access to financial resources and opportunities for people of color.

Many lack the knowledge or connections necessary to secure loans or investments. Bridging this gap requires systemic change and support from both public and private sectors. By creating pathways to access capital and information, we can empower communities to build sustainable wealth and break down barriers to success.

The Role of the Cadence and RBC Partnership

In response to these challenges, Cadence partnered with RBC Global Asset Management (RBC GAM) to launch a racial equity fund to reduce these gaps. This partnership underscores the power of collaboration in tackling complex social issues. The Cadence Racial Equity Fund focuses on investments that promote community development, such as supporting education, housing, and small businesses owned by people of color.

“We value our partnership with Cadence on this initiative aimed at reducing racial disparities in income and wealth within the United States,” said Ron Homer, chief strategist, U.S. Impact Investing at RBC Global Asset Management. “For more than 25 years, the Access Capital Investment Strategy has helped people of color attain the American dream of wealth creation through homeownership and small business development."

Real-World Impact of the Cadence Fund

One way Cadence’s partnership with RBC GAM has aimed to support community development was by supporting a woman- and Black-owned early childhood education center based in Phenix City, Alabama. Dr. Kendyl Tarver dreamed of opening a childcare center in her hometown. Through Cadence’s partnership with RBC GAM, Dr. Tarver was able to found the Kreative Learning Academy (KLA). According to the center’s website, its mission is to “integrate a learner-centered curriculum design with traditional manners and values” while fostering cultural diversity and creating a lifelong interest in learning.

Kreative Learning Academy (KLA) was started during the COVID-19 pandemic in 2021. During this time, Dr. Tarver, like many small business owners, struggled to find employees willing to work in person. “Having a daycare during the pandemic was so stressful.” Dr. Tarver faced many challenges in keeping her business open during this first year, leading her to apply for a small business loan to improve her financial situation and lessen the stress of running the business daily.

The small business loan for Dr. Tarver was made possible through Cadence’s partnership with RBC GAM. Dr. Tarver has a passion for working with children, and after applying and receiving approval for the loan, she was better positioned to financially support and grow her business as she needed in the short term. As the pressure of managing KLA abated, she was able to look to the future and discovered that her vision over the long term was to become an entrepreneur. She appreciates the partnership between RBC GAM and Cadence. RBC GAM is focused on growing this impact investing partnership by helping Community Development Finance Institutions (CDFIs) gain broader access to capital markets to support their capital needs and origination efforts in underserved communities and, ultimately, small business owners like Dr. Tarver.

Seeking Corporate Partners for Broader Impact

For the Cadence Racial Equity Fund to reach its full potential, expanding its network of corporate partners is crucial. By inviting other companies to join or create similar funds, Cadence aims to amplify the impact of these initiatives. Corporate involvement can significantly increase both the scope and effectiveness of efforts to address racial inequities.

Companies that participate can leverage their resources to support underserved communities, driving both social and economic benefits. With a collective effort, the ripple effect of these investments can lead to substantial advancements in racial equity on a global scale.

A Call to Action to Engage

The Cadence Racial Equity Fund is committed to bridging the racial wealth and information gaps through strategic investments and partnerships. Addressing these inequities can pave the way for a more equitable society and unlock economic potential for all.

Whether you're an investor, a business professional, or a community member passionate about social change, you have a role in this movement. Explore opportunities to get involved, support initiatives that resonate with you, and advocate for policies that drive racial equity.

Together, we can significantly impact and contribute to a future where everyone has equal access to opportunities and success. If you're ready to be part of this change, consider supporting the Cadence Racial Equity Fund or initiating similar efforts in your community.

To learn more, please listen to our discussion with Moor Insights & Strategy Hot Desk Podcast host Melody Brue.