Wednesday, July 24, 2024


May 5, 2021 by  
Filed under Community

England Marie

Struggle of the Climb: Funding Disparities for Leaders of Color

What do we really know about the nonprofit world? Funding disparities and inequities, exacerbated by the impact of COVID-19, have been festering for years — as significantly less funding has found its way to minority-led and Black-led nonprofits that are uniquely positioned to solve these complex social problems.

Here’s the bottom line: Nonprofits led by people of color win less grant money with more strings attached.

Two minority-led nonprofits here in Las Vegas — JET Foundation (a local nonprofit that advocates for the underserved community) and Dreamsickle Kids Foundation (a leading sickle cell organization) — shared their experiences in this area. They provided insight into how being minority-led nonprofits impact their capacity and competitiveness for funding, as they offer the same or more services and have to prove worthiness of support from other nonprofits, organizations, community partners and sponsors.

Realizing the challenges and opposition they face, these nonprofits decided to join forces and collaborated and curated Aspiration Center LV: a state-of-the-art facility that offers 22 programs and services to get our community members from situational crisis to independence and stability.

Research shows that white-led nonprofits had budgets that were 24 percent larger than nonprofits led by people of color. It also found that nonprofits led by Black women received less money than those led by Black men or white women. For nonprofits that focus on some of the same issues, the gaps were even larger. Among nonprofits focused on improving life outcomes for Black men, revenue at organizations with Black leaders was 45 percent lower than nonprofits led by whites.

“In some ways, this is not surprising. Leaders of color in the sector have been talking about this for decades,” says Dr. Jeffrey Thompkins, Nevada chapter president of the National Nonprofit Minority Association.

Even when nonprofits with leaders of color won grants, differences remained. The funding gaps and financial struggles faced by leaders of color are clear indications that funders don’t trust leaders of color to spend money wisely.

“Unrestricted assets are the cushion — the breathing room that gives organizations the ability to pivot, to be entrepreneurial, to be more sustainable. All of that wiggle room and cushion that white led nonprofits have that Black-led nonprofits automatically don’t, and that is so profound,” said Thompkins.

Organizations like the JET Foundation and Dreamsickle Kids are underfunded and for that reason they have smaller staffs, smaller budgets, and little to no operating reserves. “We call it philanthropic redlining,” said Thompkins.

A study of organizations led by African Americans found that in December 2020, 60 percent of the 66 groups it surveyed had budgets of $500,000 or less. And just 23 percent had reserves of three months or more. That is particularly concerning in the midst of a pandemic and financial crisis, when groups face increased demands for services and a loss of funding. With low reserves and restrictions on much of their money, many organizations will not survive past the pandemic.

Many foundations have discussed equity and diversity training for staff — but progress has been slow, and foundation staff remain largely white. Ninety-two percent of foundation presidents are white, as are nearly 70 percent of program officers. Diversifying grant funding for minority-led nonprofits can be an effective way to reduce the racial funding gap. Expanding opportunities and diversifying funding between nonprofits and minority-led nonprofits will build better trust and relationships with people or color who are doing the work on the ground.

Those closest to the problem are those closest to the solution.

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

Comment moderation is in use. Please do not submit your comment twice -- it will appear shortly.