A Multistate Approach to Combating Systemic Debt
Insights from What Grantees Want Funders to Know
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.