The Supreme Court's recent decision to restrict affirmative action has reshaped how institutions across sectors address equity. While this ruling challenges traditional approaches, it also opens the door to innovative, data-driven solutions that address systemic inequities without relying on race-based criteria. Research and recent events suggest that these types of reversals can harm efforts to increase representation for certain groups. However, I don't accept that this outcome is inevitable.
This pivotal moment invites us to design better, more inclusive programs that reflect the complexity of barriers restricting an inclusive economy. As McKnight Foundation's President Tonya Allen highlighted last spring, these changes are not the end of progress but an opportunity to reimagine how we achieve it. By grounding our efforts in systemic inequities rather than individual characteristics, we can craft programs that not only comply with new legal constraints but also surpass the impact of previous models.
Direct service organizations and social enterprises have long grappled with this challenge—even before court rulings—by testing innovative delivery models to counter funding constraints, inconsistent long-term client results, and diminishing program effectiveness over time.
Over time, two key questions emerge for almost all direct service organization leaders:
How can we improve outcomes beyond just serving more people?
How do we address inequalities in access and outcomes for populations facing systemic barriers—obstacles created by institutions and decisions beyond their control?
Drawing from my experience with these questions, I see clear parallels between that work and my current challenge of shaping an inclusive economy for those historically excluded. The insights gained from scaling an RCT-tested program model now inform practical strategies to build wealth—while working within today's legal and cultural framework, without placing artificial limits on anyone's economic potential.
Re-Engineering Equity
About 10 years ago, I left academia to help build the learning and impact function of one of the country's largest reentry services firms. While the organization had already achieved consistent, replicable recidivism and employment outcomes, my colleagues and I faced a crucial challenge: how could we expand our program's impact beyond initial job placement to help participants achieve stable, growth-potential careers? We discovered that simply identifying struggling participants and providing them additional support proved ineffective when measuring outcomes beyond basic program completion.
Adopt Sector-Specific Strategies
Like many organizations rethinking how to address systemic inequities without relying solely on race, we found that the factors that inhibit access vary significantly by sector—particularly when attempting to counteract the layered disadvantage faced by historically marginalized groups. One of our most effective enhancements was adapting our core model to match workforce pathway participants' skills with market demand. While some strategies proved more successful than others, moving beyond a one-size-fits-all approach by tailoring support systems and cultivating specific external partnerships yielded positive results. First-time minority entrepreneurs, in particular, often face challenges accessing capital and seeking partnerships for technical expertise. Programs that align technical support with funding pathways can mitigate these challenges while remaining race-neutral by creating mutually beneficial relationships by sector and/or regional leadership.
Utilize Localized and Alternative Data
When traditional inferential statistical analysis proved insufficient for making actionable steps, we reset our approach. We implemented Bayesian models to assess how participant characteristics—including individual traits and enrollment location—aligned with specific service pathways. Our data revealed that a consistent percentage of participants across three years were unlikely to succeed in the core program, even with enhancements. Rather than focusing solely on this challenging segment, we developed a comprehensive approach offering a range of recommended services and resources tailored to maximize the likelihood of long-term success for all participants. This strategy required understanding how historical inequities manifest today and developing criteria that reflect systemic disadvantage rather than individual characteristics. The result was precise, impactful program design informed by localized data on industry growth and small business ecosystems. The broader insight was our ability to expand the dataset used to craft solutions for all participants, with a rich understanding of both the individual and the geographies in which we operated.
Embed Flexibility in Financial Products
At the height of the pandemic, the organization launched a program providing participants with three monthly cash transfers immediately after their release. This cash assistance reduced external barriers, enabling participants to engage in skill development and work with staff to address individual needs. More broadly, this flexible financial support stabilized participants' lives, allowing them to focus on long-term goals.
Living Cities and its members are working to provide more flexible capital to local experts, particularly to drive entrepreneurship and homeownership for credit-worthy individuals who remain excluded by traditional risk assessment methods and funding networks. For example, new financial products and risk assessment methods that allow people to draw equity from their homes could enable purchases and business expansion in historically disinvested neighborhoods—an approach gaining broader acceptance. These programs could use geographic or income-based eligibility criteria, avoiding race-specific selection. Similarly, revenue-based financing models—where repayment is tied to business income—mirror the flexibility of cash transfers and give entrepreneurs the breathing room to scale their businesses without traditional loan constraints.
Adapting Lessons for the Future
The lessons from direct service agencies' innovations demonstrate the power of addressing systemic barriers through data-driven strategies and local expertise. By adapting these principles, we can create viable solutions that enhance economic mobility for those historically excluded. While I won't be blindly optimistic or ignore the social dynamics behind these new barriers, I believe we can advance equity by leveraging tools, insights, and best practices from multiple fields.