In America, race underscores nearly every social, economic, and legislative policy we have in place.

And while recent events have resulted in increased (white) awareness of racial injustices, for the Black community, these events have only highlighted the experiences and aggressions, both micro and macro, faced on a daily basis. Data from The Groundwater Approach indicates that Black people are 2.3x more likely to experience infant death, and are 2.7x more likely to be searched on a traffic stop. Black business owners are 5.2x more likely to be denied a loan.

There’s no sector of life in America that is not informed in part by our complex, unique, and devastating history with race—and that includes the nonprofit and philanthropy sectors.

Last month, Echoing Green and The Bridgespan Group collaborated on a study¹ to explore philanthropy’s shortcomings on racial equity. Specifically, the report highlighted disparities in funding faced by nonprofits led by people of color as compared with organizations with white leadership.

The results were staggering. Revenues of Black-led organizations are 24% smaller than those of white-led organizations. The unrestricted net assets of Black-led organizations are a whopping 76% smaller than in white-led nonprofits.

If goal of philanthropy is to help make the world a better place, the authors write, it’s essential to understand that many societal issues are informed by racial disparities. Per the report, “What is often missing from philanthropy’s discussions about achieving results is how much successfully changing the world depends on bringing an intentional, explicit, and sustained focus to addressing racial disparities across the problems we are trying to solve.”

The authors note that there are two major factors holding back philanthropic efforts to advance social change—both rooted in race. They include:

1. Understanding how race underscores the major problems philanthropists are attempting to alleviate

2. Understanding how significant a role race plays in how philanthropists identify leaders and find solutions

Race, they write, is one of the most reliable predictors of life outcomes. As it turns out, it’s also one of the most reliable predictors of whether an organization receives grant money, how much money they do receive, and ultimately, how much revenue they are able to generate.

From the report summary:

“Disparities by the race of the leader repeatedly persist even when taking into account factors like issue area and education levels. For example, among organizations in Echoing Green’s Black Male Achievement fellowship…the revenues of the Black-led organizations are 45% smaller than those of the white-led organizations, and the unrestricted net assets of the Black-led organizations are 91% smaller than the white-led organizations—despite focusing on the same work.”

This is something that Black-led organizations, like the grassroots and arts organizations who are part of MMI’s Grantmaking and Capacity Building program, already understand on a deep level.

“Most Black-led organizations have had to “make do” for years,” says Rychetta Watkins, Director of Grantmaking and Capacity Building at Memphis Music Initiative. “Despite having a strong track record for engaging youth and attracting loyal audiences, they’re often considered less legitimate and therefore receive less funding than their ‘mainstream’ counterparts.”

This $20 million fundraising gap that exists between Black- and white-led organizations does not exist in a vacuum. The authors cite several underlying obstacles that prevent leaders of color from receiving the funding they need. These include: access to networking and social platforms, the ability to build rapport with funders due to baked-in biases and microaggressions, the inability of funders to consider appropriate and culturally relevant strategies and evaluative strategies, and the challenge of re-applying to grants when the funder has a white-centric view of progress metrics.

Color-blind grantmaking, even when grounded in a well-meaning attempt at equity, simply does not work. Donors who are passionate about effecting radical social change “must think more intentionally and proactively about race and racial equity.”

But moving from awareness to action is a task that requires a mindset shift and a commitment to structural change at the highest levels of the organization. The authors write that in their own philanthropy work, they monitor and continually improve their process for selecting fellows, and continue to confront implicit bias in their work wherever it appears.

More specifically, the authors offer three action steps that others in the philanthropy and nonprofit sectors can take to close this gap:

1. Get proximate: Actively build knowledge of, connection to, and mutual trust with communities most impacted by the social change issues you seek to address, through intentional learning and investment.

2. Get reflective: Collect, analyze, and reflect on data disaggregated by race for your portfolio in order to unearth and assess assumptions and biases that are limiting your philanthropy. Then make necessary shifts to your organizational culture, process, and investment norms.

3. Get accountable: Set racial equity goals to build power among community members and leaders proximate to the problems you seek to address. Share these goals with others who can hold you accountable.

“Above all,” adds Watkins, “approach organizational leaders as partners first. Then ask how best to support their work—and believe their answers.”

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  1. Dorsey, C et al., “Racial Equity and Philanthropy: Disparities in Funding for Leaders of Color Leave Impact on the Table,” Bridgespan.org.  Published online May 4, 2020.