Why I’m Giving to BIPOC-led Nonprofits This Year

The racial wealth gap has been well documented, as has the disparity between small business funding for white vs. BIPOC business owners from venture capital to the pandemic relief Paycheck Protection Program data, so it comes as no surprise that nonprofits led by people of color receive less funding, have smaller assets and revenue (despite relatively equal years of operating history), than their white-led counterparts.

Disclaimer: For anyone doing this work day in and out, particularly people of color, these conversations can feel redundant at best, but more likely frustrating. If you’re well versed on this topic and don’t need convincing that racial inequity exists in philanthropy, and virtually every aspect of society, feel free to skip on ahead to the “What Can We Do About It” section

The Data

Americans donated $450mm in 2019, more than ever before, but just 4% of total grants and contributions went to organizations led by a Black, Indigenous or Latino/a/x leader.

The National Center for Responsive Philanthropy found combined funding to Black communities makes up 1% of all community foundation funding, even though the combined Black population is 15%.

A study by Bridgespan and Echoing Green in 2020 found revenues of Black-led organizations were 24 percent smaller than the revenues of their white-led counterparts, and the unrestricted net assets of the Black-led organizations were 76 percent smaller than their white-led counterparts.

Last year my organization Co.act Detroit, in partnership Data Driven Detroit, Michigan Nonprofit Association and the Knight Foundation supported a Detroit Nonprofit Leadership Census which found that in a city with 78.3% of residents who are Black, 66.5% of the city’s nonprofits have executive directors who are Black, Indigenous or are people of color. As I shared in this article, while national studies have been done it’s really important that we now have this data available locally to take action around.

This census data also shows Detroit nonprofits led by people of color statistically have less staff and revenue on average than white-led organizations. The survey found that organizations with leaders of color have assets between $471 and $1.8 million, while most white-led organizations have assets between $63,228 and $3.6 million. To close the racial funding gap this underscores the importance of investing in smaller, grassroots community organizations. By the nature of these funding inequities, smaller organizations often do not have access to a professional grant-writer, which creates a barrier with how traditional grant opportunities are evaluated and awarded.

Philanthropic leader Dr. Maria S. Johnson captures the human experience and context behind these numbers in her piece on how Black Women Face Multiple Forms of Racism in Philanthropy. To some, these experiences may seem anecdotal, but through my work convening regional nonprofit leaders of color over the past year through Co.act’s various programs the sentiment is shared and echoed unanimously.

Why Might This Be Happening

In “Letting Go, How Philanthropists and Impact Investors Can Do the Most Good by Giving Up Control,” co-authors Meg Massey and Ben Wrobel explain the relationship between philanthropy and funding nonprofits led by people of color through the “like funds like” phenomenon:

· Philanthropy boards are more than 60% male, and 72% are white, as are 8 in 10 employees at impact investment funds.

· These numbers are reflected in the lack of diversity in who receives funding.

· Black people represent 8% of foundation CEOs in the US and 8% of grant funding ends up going to nonprofits with a Black leader.

· Transgender people represent 2% of board members and staff at American foundations and transgender advocacy receives less than a penny of every dollar granted.

· Fewer than a quarter of foundations in the US have a board member with a disability. A recent study found that aid projects targeting disability inclusion represent less than 1% of international aid, equivalent to less than one dollar per person with disabilities.

· There are similar mirror-image numbers for the Native American community (fewer than 40 Native people in the US serve in key leadership roles at private foundations), Latinx community and more.

What Are The Implications

Beyond the visible inequity reflected in the numbers, in a majority minority city like Detroit (90% of Detroit’s population as of 2019 is Black, Indigenous or People of Color), leaders of color are more reflective of the communities nonprofits aim to serve. Christina Lewis, co-founder of Give Blck sums up eloquently in this post,

“When money doesn’t reach projects run by people of color, that means money doesn’t reach the people with the most experience and the most knowledge of the communities they are trying to serve.”

What Can We Do About It?

As Director of Programs for a nonprofit grantmaking and capacity building intermediary, there are many ways I’m working to advance racial equity in Southeast Michigan’s nonprofit sector.

Beyond my 9–5 (has any nonprofit professional ever worked just 9–5?) I strive to live my values authentically in every aspect of my life. That’s why this year my partner and I decided we’re dedicating one night a month, when we’d normally go out to a fancy dinner for date night, to cooking an affordable but yummy meal and donating the money we would have spent going out to a nonprofit led by a person of color.

How I’m Giving:

1. It’s important to note the difference between diversity and representation. Doing due diligence to learn about an organization’s founder, leadership and staff and whether they reflect the communities they’re serving not just in race but in residency and lived experiences. Most organizations have a webpage with their staff profiles listed. For even smaller organizations without the budget for a website you can check Facebook or other social media, which is also a great way to see their work in the community. While I caution against relying on personal networks too much to avoid the cycle of “funding who you know,” I’m fortunate to have a diverse network of social change-makers and friends which has also been a great source to get introduced to new organizations in their local neighborhoods and areas across Detroit I may not frequent regularly.

2. “Nothing for us without us.” Beyond demographics, how are organizations embedding the voices of those they’re serving in decision-making? How are their programs driven by community priorities and needs?

3. Addressing bias to smaller, community-led organizations that may be operating more informally. Put simply, give to small-budget organizations. You can verify any nonprofit’s annual budget publicly on the IRS website by looking at their 990 or 990 postcard (the nonprofit equivalent of filing your personal tax returns). As noted above, organizations with smaller budgets often can’t afford a grant writer, which perpetuates their disadvantage to accessing philanthropic and government dollars despite the reality that many are providing critical services to the communities they serve.

4. Unrestricted giving. If you want to take it a step further, give to the smallest grassroots organizations who may not have 501c3 status. This especially makes sense if your giving strategy doesn’t involve donating in exchange for tax breaks. Itemizing tax deductions most often makes sense for higher-income earners who have a larger number of expenses to deduct like mortgage interest; if this doesn’t sound like you, you aren’t getting any tax benefit from donating to a 501c3 versus your neighborhood’s block club. I recognize it requires a radical shift in thinking to trust people with money, as reflected in our country’s response to universal health care and basic income, but speaking from personal experience if you followed 1 and 2, your $50 or even $25 donation can go a really long way for the resident leader who’s feeding families on her block or buying kids in their neighborhood back to school supplies.

If you’re interested in following this initiative throughout the year — because supporting Black, Indigenous and People of Color transcends any given history month if you’re serious about racial equity — find me on IG @kylasc.

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Kyla Carlsen

Kyla Carlsen

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