The Racial Funding Gap

The funding gap between black-led organizations and white-led organizations is clear and systematic in nature. According to a Bridgespan analysis, the unrestricted net assets of black-led organizations are 76% smaller than their white-led counterparts, and their average percentage of revenue was less than half. The inequality in unrestricted assets is alarming as funding often coincides with trust.

Barriers for Black-led Organizations

There are many factors involved in the reality of unequitable philanthropy. It’s important to understand the role and significance of race when it comes to how philanthropists identify leaders and find solutions in the problems they are trying to solve. According to an Echoing Green and Bridgespan Group analysis, there are four key barriers for minority-led nonprofit organizations.

Getting connected to potential funders: Leaders of color have inequitable access to social networks that would enable connections to the philanthropic community. This is especially harmful as the world of philanthropy is based on connections.

Building rapport with potential funders: Interpersonal bias can manifest as mistrust and microaggressions, which inhibits relationship building. This form of unconscious bias can complicate relationships with leaders of color because of dynamics with race.

Securing support for the organization: Grant makers often lack understanding of culturally relevant approaches, leading them to over rely on strategies with which they are familiar with. However, specific forms of evaluation may not be accessible to organizations that face challenges getting adequate financing and other support. It takes funding to build capacity and to measure effectiveness.

Sustaining relationships with current funders: The grant renewal process can be especially difficult for leaders of color if the relationships with the funder is not maintained. This also indicates that mistrust may still be present. If this is the case, the funding may stop.

In order for change to take place, awareness has to initiate action. Black-led organizations are up against deeply ingrained racist systems. We must increase sufficient funding to Black-led organizations. In order for this to be sustainable, these organizations need to have resources that they need to make a difference. We should ensure these organizations have the financial means to endure. Equitable and inclusive philanthropy includes directing support to Black-led organizations.

How to Support in Your Local Community

Let’s Erase the Stigma, led by Kathy Sublett, is a nonprofit organization committed to navigating individuals through the shame attached to a stigma such as criminal history, chemical dependency, bad credit, and/or a negative medical diagnosis. With services tailored to provide resources to educate, empower, and encourage personal growth, the goal is to motivate individuals to look beyond their mistakes. The organization represents the belief that each day is an opportunity to learn and grow.

“If you make a mistake, fix it and move on”

Kathy’s experiences motivated her to start her own nonprofit organization. The services and resources of the organization are intended to help individuals get a chance at life by addressing and combating the shame attached to their stigmas. The nonprofit organization is designed to support people living in marginalized areas within the community by helping them gain access to resources.

Long-Term Giving Plans

Black-led organizations are working to make a meaningful difference. An endowment is not just a gift of money; it’s also a transfer of power. Endowments strongly influence the expansion of philanthropic support that a small nonprofit can absorb in the future. Endowments allow for an organization to obtain money that can used to make a difference and it sets up the organization for long-run success.

If you’re able to give regularly and are called to a passion in this field (or others), you may be interested in hearing about the advantages of a donor advised fund.

When you establish a Donor Advised Fund (DAF) at the Winona Community Foundation, you make an irrevocable gift to the Foundation and receive an immediate tax deduction for the gift. In exchange, you retain the right to name the fund, recommend grants from the fund, and to name successor advisors. Your fund’s assets are co-mingled and invested with those of the Foundation where it benefits. Your DAF can be endowed or spendable. Although many people will establish a DAF during their lifetime, many will do so through a gift in their will or estate.

The Winona Community Foundation offers a range of charitable options and funds for individuals, families, businesses, and nonprofits to accomplish their philanthropic goals. As your trusted partner, resource, and steward for community philanthropy, the Winona Community Foundation is committed to helping every individual give back in a way that is both meaningful to them and to the causes they care about.