A Multistate Approach to Combating Systemic Debt

Insights from What Grantees Want Funders to Know

Posted November 4, 2024
By the Annie E. Casey Foundation
A closeup image of a scissors cutting through a credit card.

What Grantees Want Fun­ders to Know is a new case study from the Asset Fun­ders Net­work. It high­lights lessons from the South­ern Part­ner­ship to Reduce Debt (SPRD), a mul­ti­state effort launched by the Annie E. Casey Foun­da­tion in 2017 to help address debt bur­dens faced by fam­i­lies of col­or in the South. 

What Is Sys­temic Debt?

Sys­temic debt refers to wide­spread debt that dis­pro­por­tion­ate­ly bur­dens cer­tain groups. It often results from inequitable prac­tices like preda­to­ry lend­ing; dis­crim­i­na­to­ry gov­ern­ment poli­cies; or unequal access to finan­cial ser­vices, edu­ca­tion and health care. Address­ing sys­temic debt is cru­cial to reduc­ing eco­nom­ic inequal­i­ty, pro­mot­ing racial jus­tice, stim­u­lat­ing com­mu­ni­ty devel­op­ment, improv­ing pub­lic health and enhanc­ing edu­ca­tion­al oppor­tu­ni­ties. By alle­vi­at­ing debt bur­dens, indi­vid­u­als can invest in their futures, lead­ing to a more pros­per­ous and equi­table society.

Watch a webi­nar on best prac­tices for address­ing sys­temic debt


The Casey-fund­ed study shares lessons for phil­an­thropists. It checks in on debt-reduc­tion work in the South as well as the for­ma­tion of the part­ner­ship and strate­gies that cre­at­ed local pol­i­cy change. The effort, which was imple­ment­ed across six states — Alaba­ma, Geor­gia, North Car­oli­na, South Car­oli­na, Ten­nessee and Texas — con­cludes in 2025.

We are very proud of the advance­ments that our part­ners have achieved through the SPRD,” said Francesca Jean Bap­tiste, senior asso­ciate with the Fam­i­ly and Youth Finan­cial Sta­bil­i­ty unit at the Casey Foun­da­tion. Chang­ing debt-relat­ed poli­cies is tough, but our part­ners have made sig­nif­i­cant progress in reduc­ing bur­den­some debt in par­tic­i­pat­ing states.”

Address­ing Harm­ful Debt in the South

Sys­temic debt is a wide­spread and sig­nif­i­cant chal­lenge that has long-last­ing impacts, par­tic­u­lar­ly on com­mu­ni­ties of col­or, where it cre­ates major obsta­cles for fam­i­lies striv­ing for finan­cial sta­bil­i­ty,” said Karen Mur­rell, a pro­gram offi­cer for spe­cial projects at the Asset Fun­ders Net­work and author of What Grantees Want Fun­ders to Know.

Stu­dent loan debt, med­ical debt, pub­lic sec­tor fines and fees and high-cost, small-dol­lar loans are the most com­mon types of sys­temic debt that dis­pro­por­tion­ate­ly affect com­mu­ni­ties of col­or in the South, accord­ing to the case study.

What Grantees Want Fun­ders to Know takes a clos­er look at key dri­vers of each debt type and the pro­gram­mat­ic and pol­i­cy inter­ven­tions SPRD under­took to pre­vent and elim­i­nate debt. These inter­ven­tions included:

  • advo­cat­ing for pol­i­cy reforms at var­i­ous gov­ern­ment levels;
  • sto­ry­telling to shift nar­ra­tives about debt and peo­ple bur­dened by debt;
  • inter­ven­ing to pre­vent and elim­i­nate debt, includ­ing rais­ing funds, expand­ing health care cov­er­age and waiv­ing debts;
  • edu­cat­ing pol­i­cy­mak­ers on the issues and solu­tions to debt bur­dens; and
  • build­ing diverse coali­tions to advo­cate for pol­i­cy changes tai­lored to the needs of communities.

Local Debt Reduc­tion Suc­cess Stories

Local part­ners — aid­ed by tech­ni­cal assis­tance from nation­al part­ners — made sig­nif­i­cant progress in alle­vi­at­ing bur­den­some debt. The case study spot­lights tri­umphs in sev­er­al states, includ­ing Alaba­ma, Geor­gia and Tennessee.

Alaba­ma Apple­seed Cen­ter for Law and Justice

The cen­ter is edu­cat­ing pol­i­cy­mak­ers and ele­vat­ing per­son­al sto­ries to address debt bur­dens root­ed in pub­lic fines and fees. This work prompt­ed the pas­sage of laws that reduced fines and fees or enhanced how Alaba­ma gov­erns such issues. 

Learn more about the suc­cess of Alaba­ma part­ners with SPRD

Geor­gia Bud­get and Pol­i­cy Institute

The institute’s advo­ca­cy for need-based stu­dent loans led to leg­is­la­tion estab­lish­ing a grant pro­gram that helps stu­dents with finan­cial aid chal­lenges enroll in post­sec­ondary insti­tu­tions. The organization’s advo­ca­cy has since expand­ed to include oth­er types of debt, includ­ing pub­lic-sec­tor fines and fees.

The Ten­nessee Jus­tice Center

The cen­ter has col­lab­o­rat­ed with hos­pi­tals to expand med­ical cov­er­age to unin­sured indi­vid­u­als, ulti­mate­ly elim­i­nat­ing mil­lions in med­ical debt in addi­tion to reduc­ing, and even pre­vent­ing, new med­ical debt.

Lessons for Philanthropy

What Grantees Want Fun­ders to Know lever­ages the expe­ri­ences of local part­ners to offer rec­om­men­da­tions for phil­an­thropic orga­ni­za­tions wish­ing to under­take sim­i­lar advo­ca­cy efforts. Grantees and stake­hold­ers iden­ti­fied ele­ments of their ini­tia­tives — design con­sid­er­a­tions, capac­i­ty-build­ing sup­port, fun­der engage­ment, staffing and gen­er­al rec­om­men­da­tions — and high­light­ed suc­cess­es as well as oppor­tu­ni­ties for improve­ment. Key take­aways include:

  • Pro­vide auton­o­my for local part­ners to select a debt type that best meets the needs and pri­or­i­ties of their communities.
  • Hold in-per­son con­ven­ings to fos­ter con­nec­tions, peer learn­ing and col­lab­o­ra­tion among partners.
  • Cre­ate com­mu­ni­ty advi­so­ry boards to gain com­mu­ni­ty per­spec­tives and insights on ini­tia­tive direction. 

Down­load the case study

Learn more about the South­ern Part­ner­ship to Reduce Debt

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