Cynthia R. Greenlee on the racial disparities that exist in philanthropy.
One carefully crunched statistic jumped out at Dr. Cheryl Dorsey as she and collaborators analyzed data from social entrepreneurs funded by the global nonprofit she leads, Echoing Green.
In a report Echoing Green released in May last year with The Bridgespan Group consulting firm, Black-led organizations working with Black men and boys had 91% less unrestricted net assets than their white counterparts. Zooming out to include all Black-led groups, the picture didn’t look much better. Ventures helmed by Black people took in 76% less unrestricted dollars than those directed by white peers.
“It was like a knife in the heart,” says Dorsey, a former physician and Echoing Green alumna. Through its fellowship for social innovators, Echoing Green gives funds, leadership training, and other support to people developing ambitious ideas to effect transformational social change. Its theory: create space for experimentation and invest early, often when other funders might balk at “untested” concepts or “unknown” entities.
As it turns out, initiatives led by Black innovators seem to fall disproportionately within many philanthropists’ “untested” and “unknown” categories. Dorsey has become accustomed to hearing Echoing Green fellows of color realize that they’re competing on an entirely different playing field than white peers.
“It matters who you know and who you can get to,” she says. “A lot of these folks do not have access to these networks and people with money. You go to a conference, and you find out that there’s a conference within a conference that nobody told you about. People are having drinks at the end of the day, where they’re making deals. And we’re not invited.” Familiarity breeds funding.
Social innovation is an expansive win-win proposition, and I don’t have to lose for you to win.
Those information gaps and lack of proximity translate into concrete disadvantage. But this racial funding disparity should come as no surprise. The Association of Black Foundation Executives was founded in 1971, the first affinity group in philanthropy, by leaders frustrated by the lack of representation in the Council on Foundations, among other issues. Decades later, a 2015 survey from the council found that only 8% of philanthropic leaders were from racial and ethnic minorities.
In his 2018 book Decolonizing Wealth, Edgar Villanueva, senior vice president for programs and advocacy at the Boston-based Schott Foundation for Public Education, searingly described the world of giving from his perspective as insider-outsider: “It is (we are) a sleepwalking sector, white zombies spewing the money of dead white people in the name of charity and benevolence … It is (we are) racism in institutional form.”
More actors inside philanthropy are acknowledging their field’s diversity and inclusion problems. Among recent moves, the Ford Foundation announced in 2015 it would shift its grant-making to tackling inequality. Today, efforts such as the Philanthropic Initiative for Racial Equity abound.
Such efforts have garnered pushback. Elise Westhoff, Philanthropy Roundtable president and CEO, wrote in an April 2021 USA Today editorial: philanthropists are “being asked to view all problems through the lens of particular identity groups, while ignoring others in the country who are suffering.” What she viewed as polarization, Dorsey doesn’t see in binary or negative terms. A race-conscious philanthropy that’s more attuned to communities long relegated to the field’s sidelines can only be a boon, she says.
Why does it seem to be so difficult for funders to move capital more equitably to communities and institutions that disproportionately need it?
“That’s the $64,000 question. Philanthropists are privileged and tend to replicate that privilege in boardrooms and beyond,” says Dorsey. “You can presume they have power, position and authority.” Good intentions don’t always bear fruit because there’s a disconnect between decision-makers and beneficiaries, typically considered two discrete constituencies.
In this extended American racial reckoning, Dorsey adds: “Funders are saying we’re going to be flexible and give more to communities of color. The early data shows that the rhetoric always overtakes reality.”
The gulf between intent and impact is baked into the system, says Vanessa Daniel, founder and executive director of the Groundswell Fund. Several years ago, Groundswell changed its funding priorities to focus on and fund Black women, transgender people of color, and efforts in the U.S. South.
“First, we have to look at the fact that the entire large-scale philanthropic sector with a big ‘P’ exists because of racialized capitalism,” Daniel says. “If not for those forces, the type of accumulation of wealth by a few that is dependent on the scarcity of the many would not exist.”
But as she wrote in a November New York Times editorial, ostensibly “color-blind” funding policies and preferences are anything but race-neutral and merit-based. If they were, she argued, the work of women of color would net more than the less than 1% of foundation funding it earned collectively in 2016.
Instead, organizations led by women of color find themselves deemed “too small to be effective.” Yet their strategies — such as bailouts of Black parents who remain incarcerated because they lack the cash to get released pre-trial — are often adopted by larger white organizations that have established reputations, hotlines to funders, and staff to write the grants that seal the deal. They innovate with fewer resources, but rarely get the spoils.
Stephanie McLemore Bray, the Seattle Foundation’s chief engagement officer, says the missing ingredient is trust. When she was CEO of a United Way in northern California, she approached a friendly corporate funder to pilot a minimum basic-income program that would give consistent payments to low-income residents.
The response: “‘You can’t just give them money. How will you know whether they are going to do, you know, the right thing with it?’”
Inequality shows up in bureaucracy. It’s a matter of how monies are disbursed, who’s considered a high-risk investment, and what evaluation strings are attached. Projects or nonprofits led by people of color are often beginning at a different start line, in lower-wealth communities, and with fewer staff and assets. They may need more unrestricted money to pay salaries and replace that old copy machine. It also means that they should be funded differently — for example, fewer short-term or project-based grants — and their progress should be judged differently.
Such flexibility is often absent in funder decision-making, which Dorsey characterizes as a “fairly mechanistic, clinical and academic approach that doesn’t necessarily or fully value the deep relational complexity of social change work.”
If grantees had a say in the indicators by which they’re judged, for example, a community health clinic’s reach might be measured by how many “touches” it had with households over an extended period, valuing sustained contact over total number of clients served.
Knottier questions await. Foundations often administer donor-advised funds whose politics and priorities they don’t control. Can a foundation that commits to decreasing police violence or racial health disparities also route money to police fraternal orders? It’s also difficult to assess how lack of philanthropic support or divestment has harmed specific nonprofits or communities. If a funder examines its grant-making and sees a failure to adequately support Native communities, should it double-down to remedy that — and how? There is no template for correctives and little discussion about repair (much less reparations).
Groundswell’s Daniel says that engineering philanthropic and broader social transformation will ultimately take mass transfers of wealth. While that sounds daunting, she points to existing and evolving models for philanthropic institutions to share power and money across differences of race, class, region,
and gender. “The Pink House Foundation is an excellent example — a white family foundation that just decided to turn over much of their wealth to a set of public foundations and movement/POC-led intermediaries to distribute.”
She recalls that after the 2016 election, a funder withdrew its money because Groundswell used the term “white supremacy” in a report. But the said funder reversed course after repeated police killings of Black people and people of color drew increasing attention. “They came back after the uprisings,” she says.
Complicated though the challenges are, Echoing Green’s Dorsey thinks there’s language to create a better philanthropy for a better world.
“Social innovation is an expansive win-win proposition, and I don’t have to lose for you to win.”
In her mind and work, a race-informed analysis shows that inequality costs infinitely more — economically, socially, and morally — than the material wealth it generates.