White text on teal background: MONEY AS MEDICINE; headshot of Edgar Villanueva

Edgar Villanueva on Closing the Racial Wealth Gap

We sat down with the author of “Decolonizing Wealth” to learn about the role money can play in the long process of healing and recovery from a national history of racial injustice.

Edgar Villanueva used to struggle with what seemed like contradictions in his identity. He is a Southerner and a Native American — an enrolled member of the Lumbee Tribe of North Carolina. He is also a Christian who practices Indigenous rituals and traditions. His Spanish last name was given to him by his Filipino stepfather, a name passed down after Spain colonized the Philippines.

Over time, though, Villanueva has learned that all these things can be true at the same time, and, by embracing what he calls a "both/and" mindset, he can fully connect with different parts of the cultures and communities that make him who he is.

That mindset has also helped him, as an Indigenous person, come to terms with the realities of the work he does in philanthropy. While the field is intended to help people, Villanueva has found that, in many ways, it marginalizes Black people, Indigenous people and people of color, and perpetuates inequities they have faced throughout the history of the United States.

"We have a race wealth gap that is a vast problem, which cannot be solved through random acts of charity and good works," Villanueva said. "We need something that is fundamentally transformative."

Villanueva is working to be part of that transformative force.

Acknowledging History

In the most basic terms, philanthropy involves wealthy people giving away money to people who need help. Trying to "fix" philanthropy requires tracing wealth and the systems for growing wealth back to their sources.

"Charity work is structured to really just treat the symptoms and not the underlying problems," Villanueva said. "We need to ask where the money came from. The origin of wealth in this country is extraction (of natural resources), slavery and genocide. The slave trade became the blueprint for our economic systems in the U.S. When we think about fixing philanthropy, our solutions are very forward-looking. We have to have a plan that also looks back and understands where we went wrong."

Diverse Decision Makers, Diverse Beneficiaries

After we understand where the money came from, we need to look at who controls where the money goes.

"By far, the people who get to decide where the money goes are white men," Villanueva said. "When we see more diversity around positions of leadership, we see more giving to people of color."

Villanueva said less than 10% of philanthropic funding goes to communities of color, the very people who have been disadvantaged and exploited since colonizers began arriving in America 500 years ago, and with whose labor and land colonizers' wealth was built.

Controlling the decisions about funding goes beyond how much money people and organizations receive. It extends to setting expectations for how it will be used, and how the recipients will show progress toward goals.

"The people who give money (typically) do it with strings attached," Villanueva said. "It's forced assimilation with their way of thinking."

Villanueva suggests that a better way would be to let the recipients of the funds tell the funders how the money would be most helpful: "The money can be given in a way that honors and respects the self determination of the people who need it."

Money as Medicine

In his book, Villanueva counters the idea that money is the root of all evil. He writes: "It's just a stand-in for the materials we used, the services granted, the responsibility shouldered. Money is a tool to reflect the obligations people develop to each other as they interact... And in fact, the Bible doesn't say money's the root of all evil. It says the love of money is the root of all evil — in other words, when we let it be more important than life, relationships, and humanity."

In our conversation, he said the misuse and abuse of money is about power: "It's about how we've used it historically to divide, oppress and separate. When money is used in that way, it causes harm."

If we reframe our thinking, money can also be used to repair the damage and heal the pain endured by people of color throughout U.S. history.

"We can't undo the harm that has been done for 400 to 500 years," Villanueva said. "We can use money in a way that addresses history. I see money as sacred. Anything can be medicine if it helps restore balance — if we are moving money to where the hurt is."

Mission-Aligned Investments

One of the ways philanthropic organizations grow wealth is through a return on their investments. He explained a legal requirement that philanthropic foundations pay out at least 5% of their total assets each year. They typically invest the other 95%.

He writes in his book: "It makes zero sense that a foundation that aims to stop global warming with the 5% it pays out would simultaneously invest its assets in fossil fuel industries, right? Yet this kind of contraction occurs all the time."

Villanueva believes that in order to provide net value, those investments must align with the organization's mission and values, even if it means a lower rate of financial return.

"I'm okay with accepting that not doing harm is a return on investment," he said. "We have to be sure we're using both of our hands for good."

From Scarcity to Healing

Villanueva attributes the ability for a few people to amass great wealth while others struggle to the history of colonization in the U.S.

"Colonization was all about taking and hoarding resources and destroying anything that got in the path of that," Villanueva said. "It was about control and domination and power. That mindset has been passed down through the generations. It's really a far Western world view, and it's very different than the Indigenous world view that we are all connected."

A consequence of generations of hoarding wealth and resources is a fear that there won't be enough or that it will run out — a scarcity mindset.

"That mindset is harming all of us," Villanueva said. "It's eroding the fabric of our society and overlooking that we really need each other to thrive."

Villanueva said he spends a lot of his professional time talking with white people about giving away their money. But he's clear that it's not about trying to take money away from them, and that the people who receive the money aren't the only ones who benefit. He reminds people that helping others is about helping themselves, too.

"Something I say to folks who have wealth or resources who are in positions to make decisions about money is, 'I'm inviting you into a circle of healing and liberation. I'm offering you a lifeline to your own humanity.' It's really about imagining the joy and liberation of taking leadership to help this country, to experience the healing that will make us better people, family members, leaders and communities. White people need healing, too."