Tools & Resources

Racial Equity: Foundational Concepts

If you're early in your journey of exploring the links between racial equity and impact investing, a useful place to start is by understanding core concepts behind racial equity and how it differs from concepts such as diversity and inclusion. To help you get started, we've compiled a brief list of frequently used terms, synthesized from the resources of leading educators listed below. To learn more, please see their sites, which include a broader set of important and related terms. If you have any additional resources to recommend, please reach out to us and we'll add them to the list.


  • Not all organizations have the exact same definitions. We recommend that you read multiple sources and visit the sites of experts in racial equity to understand the core meaning behind the terms.
  • MIE is still learning and relies on the valuable training and skills of educators that have spent years studying and teaching others about racial equity. Examples of resources that we have drawn from include: Community Resource Exchange, Race ForwardThe People’s Institute for Survival and Beyond (PISAB), and Racial Equity Tools. See a complete list at the bottom of this page.
  • In addition to doing your own reading, organizations often note that it's critical to engage in training and group education. Visit this page for a list of  trainings that others have recommended to MIE. 
  • Visit our Racial Equity Library for a growing list of resources on this topic as it relates to impact investing.

Key Terms

  • Diversity, in the context of discussions on people and values, is a celebration of all the ways in which people are different from one another. It sees difference as an important and valuable trait in groups — institutions, communities, and more. Although not all organizations apply the term diversity in the same way, the broad definition includes many, many characteristics of difference, including: race, ethnicity, gender, age, national origin, religion, disability, sexual orientation, socioeconomic status, education, marital status, language, and physical appearance. It also includes celebrating differences in opinions, perspectives, and values.
  • Equality tends to describe a state in which everyone receives the same things in order to enjoy full, healthy lives. The idea of equality seeks to promote fairness, but it presumes that everyone comes from the same starting point when it comes to access to resources and barriers to success.
  • Equity is a term used to describe a state in which all people would receive the resources they uniquely need to have the same chance at success. Similar to 'equality,' equity seeks to promote fairness, but it acknowledges that not everyone starts with the same resources or experiences the same barriers to success. 
  • Inclusion is usually used to describe the act of bringing people or groups who are in some way excluded to the decision-making table, in an authentic and meaningful way. A commitment to inclusion means that excluded groups are actively brought into processes in a way that results in shared power.
  • Racial equity is a state in which people of all racial and ethnic backgrounds would receive the resources they need to have a fair chance at success. It acknowledges that people of color, particularly Black Americans, face deeply entrenched barriers to success, due to racism, unconscious biases, and systemic failures. The definition of 'equity' has evolved in use to also acknowledge that the differences in starting points are perpetuated and carried out by systems, institutions, policies, and laws being made even today. According to the Center for Assessment and Policy Development, the term racial equity is "the condition that would be achieved if one's racial identity no longer predicted, in a statistical sense, how one fares."
  • Structural racism is a term used to demonstrate when systems —not singular individuals— advance, perpetuate, and/or protect racism. It refers to processes or decisions that are baked into institutions, policies, and laws. Educators in structural racism uncover for us that many of the policies that we take for granted as fair or equitable are built on racism and associated biases. The term is also used to explain that individual values and behaviors are products and byproducts of the systems and institutions in which we operate and therefore manifest racism in unconscious ways.
  • Unconscious bias, or implicit bias, describes the way in which deep subconscious attitudes shape our decisions —both positively and negatively— without us knowing it. Unlike known preferences or biases, which people can hide or express on purpose, unconscious biases can't be examined or changes simply through self-reflection. They are formed from a very young age and reinforced through recurring messages surrounding us. There are many different kinds of bias, affecting the decisions we make in our personal and professional lives — in our roles as parents, friends, investors, hiring professionals, and more. See below to learn about the overall field of unconscious bias, and click here to explore how bias emerges in investment decision-making.

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