The Bush Foundation is granting two community groups in St. Paul and South Dakota a total of $100 million to help close wealth gaps among Native Americans and African Americans.

The St. Paul-based foundation announced this month that it's selected Nexus Community Partners in St. Paul and NDN Collective in Rapid City, S.D., to distribute $50 million each in direct grants to thousands of Native and Black residents in Minnesota, South Dakota and North Dakota over the next several years.

"This is going to have an impact for so many individuals and their families and for their descendants to come," said Jackie Statum Allen, who co-leads the initiative with fellow Bush grantmaking director Eileen Briggs. "I'm so excited to see what it will do for our region."

The Bush Foundation, one of Minnesota's largest foundations, announced earlier this year that it would borrow money for the first time to spend an unprecedented $100 million, double the amount it ordinarily grants each year. It amounts to about 10% of the foundation's assets.

The fund is unique not just in terms of the amount, but where it will go — to individuals, not the nonprofits or organizations that ordinarily get such funding. And it will be driven by communities of color; Statum Allen, who is Black, and Briggs, a Native American, are leading the initiative at Bush, while NDN Collective is Indigenous-led and Nexus Community Partners is Black-led.

"These will be the two largest grants the Bush Foundation has ever made, and I think it's exciting it is being entrusted to steward organizations that are Black- and Indigenous-led and for the purpose of serving Black and Indigenous communities," Statum Allen said.

Nexus and NDN were selected from 17 applicants because of their experience engaging communities, building community trust and distributing grants, she added.

Racial disparities continue to persist in Minnesota between white residents and communities of color, especially Black and Native American residents. The median household income among white Minnesotans is $78,000, compared with $55,000 for Minnesotans of color. About 77% of white Minnesotans own a house compared with 44% of Minnesotans of color, according to 2019 Census data.

"The wealth gap was designed on purpose to keep Black and Indigenous people in poverty and therefore out of the halls of power," Nexus Community Partners and NDN Collective said in a joint statement. "This grant is a step in the right direction. … [But] we hope that other foundations and philanthropists will follow the Bush Foundation's lead and make similar commitments to put the money that was made on our backs and stolen from our lands into our hands."

Clarence Hightower, executive director of the Community Action Partnership of Hennepin County, commended the Bush Foundation's "courageous" move to invest so much in the Black and Native American communities.

But Hightower, who organized a collaborative of 13 African American groups and churches that applied for but failed to receive the Bush funding, criticized the foundation for bypassing organizations that for generations have been on the frontlines of working with the African American community, "leading this fight often without the resources that were needed."

Over the next year, Nexus and NDN will seek input from the community to design the fund applications and set up evaluations, with plans to start distributing the money as soon as late 2022 or early 2023.

Examples of possible grants include down payment assistance for purchasing a home, educational grants, or aid for starting up small businesses. The Bush Foundation has already given $500,000 each to NDN and Nexus to fund the grant design process, such as hiring additional staffers.

Briggs and Statum Allen added in a statement that the new fund will begin "reparative action" to Native and Black communities after generations of unjust policies ranging from redlining neighborhoods to violating treaties.

Bush, which has a $970 million endowment and draws about $80 million in revenue a year, was inspired in its effort by the Ford Foundation in New York City, which announced it was borrowing $1 billion through bonds to dramatically increase the amount of money it distributed.

It's part of a growing trend of foundations boosting funding in new ways, especially to communities of color after the 2020 murder of George Floyd by Minneapolis police set off a racial justice movement worldwide.

Beyond the $100 million for this latest initiative, the Bush Foundation also is giving $50 million through its regular grantmaking programs over the next five years to organizations helping other communities of color in addressing racial wealth gaps.

Shawn Lewis, a consultant who has worked at several local nonprofits and foundations, said Minnesota's largest foundations haven't focused enough on the longstanding Black-led organizations that directly serve communities of color.

"It is unfortunate that it took a death of a Black man to wake the state up about what has been going on" with racial disparities, Lewis said.