Deep disparities persist in the level of giving and other forms of support for white-led nonprofits versus those led by Black people, Indigenous people, and people of color despite widespread commitments by foundations and other donors to distribute funding more equitably, according to a new national survey of 1,168 charity leaders.
For example, 75 percent of Black-led organizations and 82 percent of all BIPOC-led organizations received foundation funding in 2021, compared with 86 percent of white-led organizations, according to a survey released today by the Nonprofit Finance Fund. Likewise, 58 percent of BIPOC-led organizations received corporate donations in 2021, compared with 71 percent of white-led groups.
The challenges for BIPOC-led nonprofits extends to other facets of donor support as well. Twenty-six percent of BIPOC-led nonprofits received at least half of their fiscal 2021 support as unrestricted funding, compared with 41 percent of white-led nonprofits.
Libertad Guerra, executive director of the Clemente, a nonprofit in New York focused on protecting and promoting Puerto Rican and Latinx culture, said nonprofits led by people of color entered the pandemic already hampered by disproportionately low funding. Despite the improvements made amid the pandemic and the racial-justice movement, equity remains a challenge, Guerra said.
Staffing Problems
The study also found that nonprofits over all continue to struggle to hire and retain workers and to meet their salary demands. Fifty-five percent said their top staffing challenge was the ability to attract and retain enough employees, and 36 percent cited staff burnout as a top challenge.
Guerra noted that staffing challenges are particularly acute at organizations like the Clemente, where only about 30 percent of its work can be done remotely. “We’re competing for talent with organizations that can offer more remote work opportunities,” Guerra said.
Trust-Based Philanthropy
The study urges donors to remain committed to what’s become known as trust-based philanthropy through more transparent and less complicated application and reporting requirements and expanded use of unrestricted funding.
Trella Walker, interim CEO of the Nonprofit Finance Fund, said the pandemic-era move toward more general operating support and other facets of trust-based philanthropy were clearly a success, so it’s frustrating that nonprofits feel they have to defend those changes from backsliding as the pandemic wanes.
“General operating support helps, period,” Walker said. “So do we have to keep talking about it?”
The online survey about the impact of the pandemic and calls for racial justice was conducted from January 19 to March 4, with 1,168 charities across the country responding. The survey covered organizations of all sizes, although most had $100,000 to $20 million in annual expenses. The survey notes that there likely is some “response bias” due to the self-selected nature of the respondents and that surveys typical feature people who “have stronger opinions on a given subject matter than the general population.”
Other findings:
- 82 percent of BIPOC-led nonprofits cited long-term sustainability as a top need, compared with 69 percent of white-led organizations.
- 16 percent of BIPOC-led organizations had investment income, compared with 33 percent of white-led organizations.
- 24 percent of the nonprofits in the study said they “were impacted a great deal by instances of politically or racially motivated violence and threats.” The figure was 45 percent for Black-led nonprofits and 46 percent for those led by Asian Americans and Pacific Islanders.
- 81 percent of BIPOC-led organizations saw an increase in demand for services, compared with 67 percent at white-led groups.
- 83 percent of BIPOC-led organizations focus on people with lower incomes, compared with 62 percent of white-led groups.
- 36 percent of all nonprofits surveyed received more than half of their gifts in the form of unrestricted funds, and 57 percent said that foundations have been more flexible in their funding since March of 2020.
- 76 percent of white-led organizations received Paycheck Protection Program loans, compared with 58 percent of Black-led nonprofits. The disparity is due to two factors. First, 77 percent of White-led nonprofits applied for PPP loans, compared with 64 percent of Black-led organizations. Also, among those that applied for loans, 99 percent of White-led organizations were approved, compared with 90 percent of Black-led organizations.
- 49 percent of respondents from Black-led organizations said they were affected “a great deal” by events surrounding the murder of George Floyd, compared with 23 percent of white-led organizations.
- 81 percent of BIPOC-led nonprofits reported an increase in demand for services during the pandemic, compared with 67 percent of white-led nonprofits.
- 59 percent of BIPOC-led organizations have publicly advocated for racial equity in the communities they serve, compared with 41 percent of white-led organizations.
