Major philanthropy, we are now told, is one of many American institutions either fundamentally tainted by or indifferent to racism. Critics charge that grant making that does not specifically address by name the ills of systemic racism fails to help communities of color.
One of the most influential voices making this argument is activist and author Edgar Villanueva. His often-cited 2018 book Decolonizing Wealth (a second, expanded edition of which was just released) criticizes philanthropy and the American economic system for perpetuating what he sees as structural racism. As he puts it: “Many institutions that have amassed wealth have done so on the backs of people of color and Indigenous people.” Villanueva also argues that these fortunes are not adequately distributed to communities of color due to a lack of racial diversity on foundation boards and staff.
Certainly advocacy has its place in ameliorating the ill effects of racism. But the notion that this can only be accomplished by supporting groups and causes that specifically claim to address racism is far too narrow. A close examination of the data shows why.
Villanueva bases his argument on research that purports to show that only about 8 percent of grant making in the United States goes to communities of color. His widely reported discussion of this data, and the aftermath of the police killing of George Floyd, have helped unleash a wave of giving to advocacy groups that claim to combat systemic racism. From 2011 to 2019, donations to racial equity totaled $3.3 billion but increased to at least $4.2 billion in 2020 alone, according to Candid.
In reality, the data cited by Villanueva tells a different story — one in which the narrative that philanthropy has historically fallen short of serving communities of color is much less clear. Candid notes that its data on giving to communities of color comes from the Philanthropic Initiative for Racial Equity, which takes a narrow perspective on what sort of philanthropic investments benefit Black people and other minority groups.
Additionally, the group deploys a questionable methodology in examining grants of more than $10,000 from a select group — the 1,000 largest U.S. foundations. For example, it codes grants based on criteria provided by Candid that use relevant keywords like ”systemic racism” in grant descriptions, recipient organization names, or related coding, such as a grant with a population code for “African American” and a subject code for “ethnic and minority rights.”
This approach excludes organizations and programs that should be counted but aren’t because of the language used to describe them. A grant for direct services in a community of color, such as for a library in a low-income community, health clinic, parent-teacher group, scholarship fund, or even a charter school, would not qualify unless it mentioned those specific code words, which implicitly favor advocacy over direct service. What’s more, many such programs are not supported by the larger foundations that were the focus of the study.
Who Gets Left Out?
Among the nonprofits that would be overlooked is an effective, volunteer-based educational group called the New Jersey Orators, which is led by a woman of color and has trained thousands of Black young people in the art of public speaking, preparing them for professional success. Another group that wouldn’t make the cut is New York’s Health for Youths, which is also led by a woman of color. It builds and stocks Little Free Libraries in public housing projects, encouraging reading and social trust.
When parsing which philanthropic initiatives benefit select populations, does it really make sense to leave out efforts that benefit all Americans and often help communities of color more than others? For instance, the Bill & Melinda Gates Foundation’s support for mRNA research was critical to developing vaccines against Covid-19, which has disproportionately harmed communities of color.
Villanueva also asserts that “who actually gets to control, allocate, manage, and spend” foundation grants is at least as important as their purpose. In an opinion piece in these pages, he called for “a radical shift in what our white leaders see as acceptable, who is esteemed as experts, and how success or worthiness is defined in funding circles.”
The idea that philanthropists have been historically impervious to the injustices facing Americans of color would have come as a surprise to the late Julius Rosenwald, the white Sears, Roebuck and Company leader who, with encouragement from Booker T. Washington, funded some 5,000 schools for Black children in the Jim Crow South in the early 1900s. It would also likely be news to Stanley Druckenmiller, the white hedge-fund executive who provided the key seed money for the Harlem Children’s Zone, which has supported education and other opportunities for children dealing with the challenges of poverty.
There simply is no evidence that only those of a given background can best guide effective philanthropy aimed at aiding and uplifting disadvantaged people.
Those truly interested in improving the lives of struggling Americans, including people of color, shouldn’t dismiss philanthropic efforts that address day-to-day hardships and remove barriers to opportunity. Such programs lay the groundwork for long-term upward mobility in a way that advocacy may not. There is also a risk that focusing on the obstacles posed by systemic racism could discourage ambition — preventing people from embracing their own ability to change the course of their lives and their communities.
