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Discrimination in Funding Black-Led
Public Charities: How Philanthropists
Can Make a Difference

Donations are critical to Black-led public charities like Freeman Initiative. Funding is needed to fight wrongs, effectuate change, and fulfil our mission. Accordingly, every one of our donors is precious to us as we cannot exist without your support because there is a fundamental funding gap when it comes to philanthropy. It is a funding gap that becomes bigger when the social justice organization is nonprofit and Black woman-led like Freeman Initiative. Our work is made much harder and our impact is much smaller since we don’t receive philanthropic funding on par with white and male-led organizations. Hence, philanthropy in American needs a social change of its own.

Philanthropy is the process of transferring private wealth toward advancement of social goals. It is donor giving at the highest level and transformation is needed here to fund more Black public charities. Systemic racism in America has of course affected how donors are giving and more notably, to whom they are giving. Most philanthropists and influential organizations have no giving goals directed at equity, racial inclusion, or diversity, so year after year, they continue to contribute to the marginalization and disparity of funding of Black-led organizations. Systemic racism and white supremacy have long determined the circumstances surrounding wealth generation in the United States and have continued to govern who is able to accumulate significant assets—and who is not.

Racial inequities are the result of structural racism that is embedded in our historical, political, cultural, social, and economic systems and institutions. The effects compound and produce predictable and vastly adverse outcomes for Black people and other communities of color in the United States in areas such as health, wealth, career, education, infrastructure, and civic participation. Achieving population-level improvements in these areas of social well-being—the stated goals of many philanthropists—will require us to undo systems of racial injustice in the United States.  -Batten et al, 2020

The best way for philanthropists to start significantly improving our collective social well-being is by giving with equity goals in mind. Equity is fair access to resources and opportunities. Providing equity counters the vast injustices and unfairness in our communities by recognizing that more or different resources are required by some groups than others to achieve the same outcome. “The funding gap between Black-led organizations and white-led organizations is clear—and alarming. One study of more than 140 nonprofits found that white-led groups had budgets that were 24% larger than those led by people of color. Groups led by Black women received less money than those run by white women and Black men. And the unrestricted net assets (donations that can be used for any purpose) of Black-led groups were a whopping 76% smaller than those of white-led groups.” (Wade, 2020). Research shows that this funding gap is driven by racial biases – whether intentional or not – and most family foundations do not employ diversity, equity, and inclusion strategies and goals when distributing their funding. Without purposeful dismantling of these racial disparities, changes will not reach the many communities and organizations in need.  

Additionally, because of these entrenched discrepancies, Black-led organizations must allocate more time and energy to generating funding, which leads to less time and resources toward fighting for the causes and people they aim to help and uplift. This leads to less overall impact, and it becomes an endless cycle as this decreased impact directly affects the likelihood of future donations. Systemic barriers and explicit discrimination in employment; education; homeownership; and access to credit, capital, and financial services have all inhibited Black Americans from building wealth and have led to generationally compounding socioeconomic disparities. Even with years of investment and focus in these areas, gaps in equity of opportunity continue to exist in education, earnings, and health.

Black leaders uniquely understand the pain their community is experiencing, what the needs are, and how to address them. Funding Black leaders and communities with the lived experience of racial oppression is the most direct path to ensuring solutions will truly address the challenges experienced. Further, committing to funding Black-led racial justice work is a form of power redistribution that upholds principles of self-determination, and ensures that funding does not further compound inequities. -Batten et al, 2020

Despite the recent focus on diversity, equity, and inclusion, the numbers remain wildly out of balance. The philanthropic sector must recognize that of the billions of dollars being given, only a very small percentage of that money is going to communities and leaders of color—and even less to Black-led public charities like Freeman Initiative. For change to take place, this awareness must trigger deliberate action.

Diversifying sourcing pools helps to create a more racially diverse portfolio of grantees. Maintaining focus on the dismantling of unconscious bias and treating your grantees of color as partners will help empower their causes. (Savage et al., 2020). Purposeful solutions must be sought out and implemented because without them, and without measured consideration being given to the equity in funding, philanthropists will inadvertently continue to contribute to the inequities and racism in our society unless that is their true intent.

References:

Batten, Susan Taylor; Edward M. Jones, Leslie MacKrell, Jerry Petit-Frere. (2020). Guiding a Giving Response to Anti-Black Injustice. ABFE and The Bridgespan Group. 08/25/2020 https://www.bridgespan.org/insights/library/philanthropy/guiding-a-giving-response-to-anti-black-injustice (last accessed on February 5, 2022).

Savage, B., Dorsey, C., Kim, P., Daniels, C., & Sakaue, L. (2020). Overcoming the Racial Bias in Philanthropic Funding. Stanford Social Innovation Review. https://doi.org/10.48558/7WB9-K440

Wade, Vangela M. 2020. The Funding Gap Between Black- And White-Led Organizations Is Clear—And Alarming. September 28, 2020. https://racetolead.org/the-funding-gap-between-black-and-white-led-organizations-is-clear-and-alarming/