From the start, the apparent unprecedented surge last year in funding for racial justice seemed too good to be true. Candid, a nonprofit research group that tracks annual foundation and corporate grant making, identified 2020 racial-equity pledges totaling $8.8 billion. One McKinsey study estimated more than $200 billion in corporate commitments for racial justice — a staggering figure considering that Giving USA’s estimate of total corporate giving for all causes in 2020 was $16.9 billion.
In fact, these numbers — based largely on institutional pledges made in press releases following last year’s worldwide racial-justice protests — were at best inaccurate and, at worst, dangerous.
In recent months, conservative think tanks and philanthropic groups have seized on the inflated estimates to make the case that racial justice is overfunded. But a report released this week by the organization I direct, the Philanthropic Initiative for Racial Equity, or PRE, uses rigorous data analysis to paint a more accurate picture of racial-equity funding — and expose those attacks as baseless.
Drawing on data from Candid, our report — “Mismatched: Philanthropy’s Response to the Call for Racial Justice" — found that funding for racial equity since 2015 made up just 6 percent of all foundation and corporate giving. It also found that portrayals of a massive funding increase had harmful consequences. They falsely signaled that grassroots racial-justice movements had sufficient resources and fed into racist tropes implying that communities of color — especially Black communities — were getting more than their fair share.
In reality, both the amount and focus of racial-justice funding was nothing like what these reports conveyed. Here’s what we found:
The scale of the funding surge for racial equity was greatly exaggerated. Our analysis identified only $3.4 billion in confirmed grants for racial equity in 2020. That figure is preliminary and will increase as more foundations report grants to Candid, but it’s a tiny fraction of the vast sums previously reported. In 2018, the most recent year for which Candid has complete data, funding for racial equity reached $5.1 billion. Once all the data is in, we suspect the 2020 figure will be higher, but not by an enormous amount.
Previous estimates were inflated in part because many large pledges came from corporations, which often combined external commitments to community grants with internal commitments such as diversifying supply chains. A recent Washington Post analysis mirrored our findings, reporting that only 10 percent of racial-equity commitments from large corporations had taken the form of grants. But those earlier estimates provided ammunition for conservative leaders claiming that progressive orthodoxy is pressuring philanthropic organizations to support racial equity at the expense of other causes.
Most funding went to mainstream racial-equity programs focused on education and jobs, not racial justice. The terms “racial equity” and “racial justice” are sometimes used interchangeably, resulting in foundations applying them to starkly different types of grants, organizations, and strategies. We’ve worked with movement leaders and philanthropic organizations to develop clearer definitions, which allow for more precise and nuanced analysis.
In collaboration with Candid, PRE developed revised parameters for racial-equity grant making to include all grants that benefit communities of color or organizations that serve these populations. While PRE generally uses a more specific definition of racial equity — improving access and opportunity for communities of color — we incorporated this broader definition in our report to reflect how it is typically defined by mainstream philanthropy and corporations.
Additionally, we worked with Candid on a more refined definition for a subset of racial-justice grants focused on building community power to fight for systemic change — a definition commonly used by movement leaders. Consistently over the past decade, racial-equity funding was five to 10 times greater than funding for racial justice.
In 2020, announcements of pledges often used soaring language of solidarity with the protests and commitments to racial justice. This language was misleading. The top recipients of racial-equity funding included social-service providers, scholarship programs, and historically Black colleges and universities — all laudable efforts, but with little connection to 2020’s racial-justice uprisings. None of the front-line organizations that led those protests were among the top recipients for racial-equity funding or racial-justice funding.
Conservatives have accused PRE and other racial-justice advocates of dismissing the value of direct services for communities of color. To the contrary, we recognize that a wide range of strategies, including direct services, education, and advocacy, are necessary in the fight for racial justice and that effective grassroots organizations often combine multiple approaches. Such work was always included in our reporting on giving to communities of color, but our analysis shows that strategies focused on systemic change remain among the most underfunded.
Much racial-equity funding was devoted to white-led organizations. In September 2020, the Wall Street Journal published an article headlined “At Nonprofits Focusing on Blacks, Donations Soared in Wake of George Floyd Protests.” It was typical of media coverage last year, which assumed — with little substantiating data — that the wave of pledges would result in more grants for Black-led organizations focused on racial justice in Black communities. Conservative groups have glommed on to such reports, claiming that donors are penalizing people with “privilege” and implying that it’s more difficult for white leaders to get funding.
Our research shows that, even when it comes to racial equity, white-led groups are often favored over those rooted in communities of color. Based on 2020 grants data so far, only $160 million was focused on racial justice for Black communities — an increase from 2018, but less than 2 percent of the $8.8 billion in pledges originally reported. Moreover, from 2015 to 2018, more than one-third of the top 20 racial-equity grant recipients were organizations founded by white billionaires or large corporations.
This is not to say that white people and even white-led organizations have no place in fighting for racial equity. White allies and multiracial coalitions can be invaluable to advancing racial justice. However, white-led organizations should receive the same rigorous assessment as all grant seekers in determining their ability to achieve intended outcomes. We found that several of the top racial-equity grant recipients were white-led organizations focused on education and charter schools in predominantly Black and Latinx communities. Such top-down strategies frequently run counter to racial-justice movement goals and have produced mixed, or even negative, results.
By contrast, organizations rooted in communities of color are often presumed to lack the expertise and capacity to make a difference. This is typically because philanthropic organizations fail to recognize what qualities produce meaningful results in these communities, such as a demonstrated ability to build coalitions based on trusting and authentic relationships and a commitment to long-term reform. Many organizations of color excel in these areas, even with small budgets and limited resources.
As our report shows, funding for such groups is far from saturated. But the false picture of abundant racial-justice funding in 2020 has fed a fresh round of pernicious conservative arguments that such giving has taken over philanthropy — to the exclusion of other causes. These arguments also assume that racial justice is mutually exclusive of other philanthropic priorities. But understanding racial disparities — and the longstanding systemic racism that drives those disparities — is critical to any effective grant-making strategy.
The organizations and networks that mobilized last year’s historic protests spent years building coalitions, developing their grassroots organizing, and making the case that Black lives matter. The bold donors that supported their work long before 2020 helped ensure the infrastructure was in place to inspire those global demonstrations at a crucial moment in history.
Our analysis found that annual funding for racial-justice grassroots organizing has never exceeded $89 million, even though it is among the most effective strategies donors can support. With minimal budgets, grassroots groups last year got the world to stand up for racial justice. Let’s stop peddling false narratives that they now have all the funds they need. Instead, we should fund them at levels commensurate with the results they have already proven they can achieve.
Ben Francisco Maulbeck, a senior fellow at the Philanthropic Initiative for Racial Equity, contributed to this piece.
