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REASONS YOU ARE MISSING OUT ON THE NEXT BIG THING
The Moral & Business Case for Early, Robust, and Consistent Investment in QTPOC-led Social Impact Organizations
2020 shattered the illusion that we lived in a post-racial society. For communities of color, it provided constant, in-your-face examples of what we have been dealing with for generations. The racial reckoning, political uprising, financial downturns, and global pandemic added fuel to the fire, and many nonprofits were already feeling the burn as a result of being under-resourced, understaffed, and stretched beyond capacity to meet the growing needs of their communities. QTPOC (Queer and Trans People of Color)-led nonprofits turned to their philanthropic partners— corporations, foundations, government entities and individuals—to find the support they needed to stay afloat during the tsunami of hardships they continued to experience. Philanthropy pledged to solve the problem in big ways, and although they made substantial investments across all sectors, they continued to implement the same old way of doing philanthropy that created many of the problems nonprofits faced to begin with rather than transgressing beyond to more nimble, trust-based and culturally competent grantmaking. Lack of financial investment in community-driven solutions, organizational capacity-building and strategic fundraising from philanthropy forced nonprofits to make difficult decisions such as asking staff to forego pay or laying them off, closing critical community programs and/or shutting down altogether. If we are to see real change come from the lessons learned, we must face the truth that our philanthropic systems have kept community-based solutions by and for people of color from being funded in meaningful and sustainable ways. We know that staff and boards that are representative of the communities they serve are smarter, more efficient, and capable of creating new solutions to our biggest problems. We must create space, provide the skills, and offer resources to people of color, queer and trans people, disabled people, immigrants and refugees, and so many others, so that all of our communities benefit from the ripple effect of inclusion and belonging. The next big thing — idea, program, or organization — will come from investing in leaders from the very communities that have known how to solve the problems all along. Now they just need the investment to do it. Foundations play a critical role in creative inclusive philanthropic spaces by engaging their staff at all levels to connect with the communities they serve and build relationships beyond grant applications to truly see the power of our communities. The philanthropic sector has the opportunity to act not as gatekeepers but as gate openers. Foundations should enable resources to reach organizations by turning the conventional philanthropic logic about risk on its head, funding promising start-ups and people of color-led work. We need foundations to advocate for general support and multi-year funding, and to move money quickly and strategically in critical moments by leveraging relationships with grassroots, community-driven organizations led by and for people of color.
In this report, we will highlight:
4 7 10
The case for what appreciating diversity can bring to the table The ramifications of decisions being made in a silo The real cost of upholding power structures
16 18
The result of inclusive excellence in personnel
22 26
The new way forward for community investment
The effects of COVID-19 on the philanthropic sector
Resources available to aid in one’s equity journey
The Case for What
APPRECIATING DIVERSITY
Can Bring to the Table
It’s time to go beyond the surface-level effects of diversity. There is substantial research that shows the benefits of diversity across institutions, but for said diversity to actually be effective, a point must be reached where our actions speak louder than our words. Beyond just including QTPOC in the C-suite or at the trustee level, structural change and support across all levels of our philanthropic system are necessary for diversity to yield positive results.
Impact of Diverse Teams on Creativity, Innovation, and Economic Growth
1
“Diversity increases creativity and innovation, promotes higher quality decisions, and enhances economic growth because it spurs deeper information processing and complex thinking.”
Maximizing the Gains and Minimizing the Pains of Diversity: A Policy Perspective | Association for Psychological Science | 2015
2
“Diverse leaders were more likely to create an environment where new, creative ideas were considered. And diverse teams, they found, were more likely to have some common experiences with their end user. With this advantage, teams created better products.”
3
“Diversity doesn’t work without psychological safety. People only contributed unique ideas to the group when they felt comfortable enough to speak up and present
When Gender Diversity Makes Firms More Productive | Harvard Business Review | 2019
4
“Increasing diversity does not increase effectiveness on its own; what matters is how an organization harnesses diversity and whether it’s willing to challenge current inequitable power structures.”
Getting Serious About Diversity: Enough Already with the Business Case | Harvard Business Review | 2020
When Gender Diversity Makes Firms More Productive | Harvard Business Review | 2019
5
“Unconscious bias toward people who are of the same race… influences who you hire…. You subconsciously look for points of similarity in everyone you meet because similarities make you feel safer.”
Why You Mistakenly Hire People Who Look Like You | Forbes | 2018
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“Many mainstream American organizations have profited from and reinforced white dominance. Understanding this context is vital to seeing organizations for what they really are: not meritocracies, but long-standing social structures built and managed to prioritize whiteness.”
Why So Many Organizations Stay White | Harvard Business Review| 2019
7
“Being one’s true self, disclosing elements of one’s personal life and forming social connections are easier within one’s own group than they are across a demographic boundary such as racial background. Simply hiring members of a minority group won’t ensure that they feel comfortable or equipped to build the relationships necessary for advancement.”
9
“Fundraising is a field in which donors, board members, and executive directors’ comfort with the fundraising relationship is essential for success; when people of color are viewed (consciously or subconsciously) as outsiders, it is harder for them to bring in the expected resources. ‘Donors see themselves or their children in our white colleagues’ observed one formerly university-based fundraiser of color. ‘They can’t see that in us.’”
The Lived Experience of Fundraisers of Color | The Cause Effective | 2019
Diversity and Authenticity | Harvard Business Review | 2018
8
“Talented, ambitious, and qualified people of color are ready to lead, but they are thwarted by assumptions about race, the idea of ‘cultural fit,’ and preconceived notions of what a leader looks like — the structural barriers that exist at nonprofits.”
It’s Biased That Hobbles People of Color Not a Lack of Leadership Pipeline | Chronicle of Philanthropy | 2017
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The Ramifications of
DECISIONS BEING MADE IN A SILO
If it’s broke, fix it. It’s time to center those communities that are impacted by the decisions being made. Generations of philanthropic systems that center the worldview of donors who are often white, cisgendered, ablebodied, and more educated in favor of those in need have created ripples through the nonprofit landscape that directly impact funding for communities of color. This effectively destroys the thought leadership of POC movement leaders as advisors within structures where white people have the ultimate decision-making power.
The Impact of “Mainstream Thinking” in Boards & Staff in Philanthropy
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“Foundations will never change until foundation boards internalize diversity and inclusion. Efforts targeted at staff diversity will go nowhere because the power and authority to determine the future of these organizations rests with our boards.“ - Darren Walker, president of the Ford Foundation
In Philanthropy, Race Is Still a Factor in Who Gets What, Study Shows | New York Times | 2020
11
More than 90% of foundation presidents and more than 80% of full-time staff members are white.
In Philanthropy, Race Is Still a Factor in Who Gets What, Study Shows | New York Times | 2020
12
“More than 16% of nonprofits that primarily focus on serving people of color have allwhite boards.“
Findings on US Donation Trends, 2015-2020: Nonprofit Trends and Impacts 2021 | Urban Institute | 2021
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While nearly 1 in 4 people have a disability, more than 75% of nonprofit boards do not have any people with disabilities represented on them.
Foundations and Nonprofits Do Little to Include People With Disabilities, New Study Says | The Chronicle of Philanthropy | 2019
14
“In general, three-quarters of white people have entirely white social networks.” If substantive change is to take place, networks must be diversified to incorporate skills and gifts of QTPOC talent that can contribute to a better world.
In Philanthropy, Race Is Still a Factor in Who Gets What, Study Shows | New York Times | 2020
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“Almost half (49%) of all chief executives said that they did not have the right board members to ‘establish trust with the communities they serve.’”
Leading With Intent - 2021 National Index of NonProfit Boards | BoardSource | 2021
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More than 80% of nonprofit boards reported that they are either all-white (0% POC) or majority white (1-39% POC).
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“Foundation boards remain overwhelmingly white—and we see a relationship between a board’s racial diversity and a foundation’s likelihood to undertake a number of practices, including supporting organizations most affected by the crises of 2020. Yet, few foundation leaders… mention increasing the racial diversity of their board as a priority.”
Foundations Respond to Crisis: Towards Equity? | Center For Effective Philanthropy | 2021
Reviewing The State of Diversity, Equity, and Inclusion on Nonprofit Boards | BoardSource | 2021
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About 20% of executive directors are people of color, and 62% are women.
Findings on US Donation Trends, 2015-2020: Nonprofit Trends and Impacts 2021 | Urban Institute | 2021
18
The research found that “transgender, genderqueer, and gender non-conforming people account for 2% of people on the staff or board of participating foundations.” This percentage dropped to 1.6% if the foundation’s focus was not social-justice or LGBTQ issues.
98%
1.6%, 2% Transgender, genderqueer, and gender non-conforming
The Philatropic Closet - LGBTQ People in Philatrophy | Funders for LGBTQ Issues | 2020
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The Real Cost of Upholding
POWER STRUCTURES
How can one expect philanthropy to change anything if all the decisions happen behind locked doors? Philanthropy is giving for the public good and improvement of quality of life. When that giving does not center the people whose lives it’s trying to improve, the result is a growing gap in funding that favors the status quo, mirrors inequality in our society, costs millions to queer and trans communities of color and doesn’t allow foundations to truly realize their priorities, which means communities fail to reach their full promise. It becomes harder for all of us to live enriched lives across lines of difference, including a chance to build collective power and invest in the assets of directly impacted communities. How we do the work matters. Meaningful attempts to incorporate an intersectional grantmaking approach must be etched into our processes, including the disruption of current philanthropic trends that support solutions to address historical and systemic inequities and center the experiences of community members who occupy layers of historically targeted identities.
The Cost of Exclusion by Philanthropic Decision-making
20
Across Echoing Green’s 2019 applicant pool alone, in the United States there is a $20 million racial funding gap between Black-led and white-led early-stage organizations.
22
A study found that from 2012 to 2015 groups led by Black women received less money than those led by Black men or white women.
Nonprofits Led by People of Color Win Less Grant Money With More Strings | The Chronicle of Philanthropy | 2020
23 Racial Equity in Philanthropy | Echoing Green & The Bridgespan Group | 2020
21
Only 1% of the grantmaking from 25 community foundations studied in the National Committee for Responsive Philanthropy report was specifically designated for Black communities. The combined Black population of these 25 cities is 15%.
Black Funding Denied | National Committee for Responsive Philanthropy | 2020
“Just one out of five organizations (20 percent) represented in our survey ask their grantees or members to include people with disabilities in their work. Funders can make a big impact by encouraging or requiring that organizations intentionally include the 1-in-5 people who live with some form of disability, by making their work accessible and by helping them budget accordingly.”
Disability in Philanthropy & Nonprofits: A Study on the Inclusion and Exclusion of the 1-in-5 People Who Live with a Disability and What You Can Do to Make Things Better| RespectAbility | 2019
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“Among groups focused on improving life outcomes of Black men, revenue at organizations with Black leaders was 45 percent lower than at groups led by white people.“
Nonprofits Led by People of Color Win Less Grant Money With More Strings | The Chronicle of Philanthropy | 2020
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“But for the third consecutive year, the percentage of funding for LGBTQ organizations decreased relative to the funding for non-LGBTQ organizations. Non-LGBTQ groups include the ACLU, HIV/AIDS service providers, universities and groups that carry out research or intersectional advocacy.”
What New Data Reveals About the Long, Steady Rise of LGBTQ Giving | Inside Philatrophy | 2020
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“The unrestricted net assets of Black-led organizations are 76 percent smaller than their white-led counterparts.”
29
Disability in Philanthropy & Nonprofits: A Study on the Inclusion and Exclusion of the 1-in-5 People Who Live with a Disability and What You Can Do to Make Things Better| RespectAbility | 2019
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$$ Racial Equity in Philanthropy | Echoing Green & The Bridgespan Group | 2020
27
The population of Latinos in the United States has risen over the past decade to 16%, and yet the share of philanthropic dollars going to Latino issues has remained at about 1%.
“More so than the inherent complexity of the issue or potential legal risks, lack of training to make it successful, or any other unrelated but urgent concerns facing foundations and nonprofits – bias against people with disabilities was cited as the top reason why they are not better integrated into our organizations.”
In 2018, domestic funding for LGBTQ communities of color reached a total of $33.3 million. That was an increase of nearly $9 million. More than $5 million was designated for queer people of color in general. Black communities received $2 million, and $1.9 million went to Latinx communities, while funding for Asian American Pacific Islander (AAPI) communities fell by 27 percent.
2018 Tracking Report LGBTQ Grantmaking by US Foundations | Funders for LGBTQ Issues | 2020
31
Domestic funding for queer and trans communities of color is 16% of total giving, which equals $33M versus $209M, the total investment in LGBTQ issues in 2018.
2018 Tracking Report LGBTQ Grantmaking by US Foundations | Funders for LGBTQ Issues | 2020
Foundation Funding for Hispanics/Latinos in the United States and for Latin America | Foundation Center | 2011
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“Of all philanthropic funding by large U.S. foundations, only 0.4% on average is directed to Native communities.”
Investing in Native Communities | Native Philanthropy Candid | 2021
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Capacity-building and training is 12% of US foundation LGBTQ grantmaking.
35
78%
12%
Capacity-building and training
2018 Tracking Report LGBTQ Grantmaking by US Foundations | Funders for LGBTQ Issues | 2020
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Leadership development is 3% of US foundation LGBTQ grantmaking.
97%
3%
Leadership development
2018 Tracking Report LGBTQ Grantmaking by US Foundations | Funders for LGBTQ Issues | 2020
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“It is our contention that LGBTQ lives, when considered alongside questions of data, require us to radically reimagine how we conceive of data itself, especially as it relates to and attempts to represent marginalized identities. This is especially true in an era of algorithms and big data, when data increasingly shapes power, access, governance, and culture in the realm of the digital and beyond, raising the stakes of these questions about whose identities are or are not ‘counted.‘“
From 2010 to 2014, total giving in the U.S grew by 22% from $22 billion to $28 billion, yet giving to communities of color stagnated at $2 billion or 7.4% of total giving. If funding for communities of color had increased at the same rate during the same time, it would have meant an additional $2.38 billion in investments, which would have only represented 8.2% of giving.
What Does Philanthropy Need to Know to Prioritize Racial Equity | Philanthropic Initiative for Racial Equity | 2017 |
36
Grants that served people with disabilities between 2008 and 2018 totaled about $22 billion, or about 3.5% of the $623 billion foundations gave during that time frame. If narrowed to areas that specifically prioritized people with disabilities, this percentage drops to 0.75%.
Philanthropy Often Overlooks Disability Rights. Can a Coalition of Major Funders Close the Gap? | Inside Philanthropy | 2019
37
“In fact, research shows that, ‘the wealth gap between Blacks and others continues to widen; experts predict that Black families‘ median wealth will decrease to $0 by 2050, while that of white families will exceed $100,000.’” $100,000
$0 White families
Black families
Toward a Racially Just Workplace | Harvard Business Review | 2018
Data for queer lives: How LGBTQ gender and sexuality identities challenge norms of demographics | SAGE Journals | 2020
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From 2011 to 2019, racial equity funding amounted to $3.3 billion from institutional funders. In 2020 alone, that number increased 22% to $4.2 billion— more than the previous nine years combined. This signals opportunity, but also caution in making sure this momentum is sustained for years to come.
41
What does Candid’s grants data say about funding for racial equity in the United States? | Candid | 2020
39
“Before 2020, 6% of grants awarded for racial equity came from corporate foundations or corporate giving programs.” Through July of 2020, “these corporate funders accounted for 79% of the dollars” Candid had tracked.
What does Candid’s grants data say about funding for racial equity in the United States? | Candid | 2020
40
In 1999, Boston College researchers, John Havens and Paul Schervish, estimated that from 1998 to 2052 some $6 trillion of a $41-trillion intergenerational wealth transfer would make its way to charitable foundations in the US. As of 2020, the percent of philanthropic funds going towards communities of color has increased from 1 to 2%. Therefore, the number that communities of color missed out on and will miss out on if philanthropy remains the same or increases only nominally is anywhere between $666 billion and $3.2 trillion.
“LGBTQ funding in the South went up by 40% in large part due to the creation of a cohesive southern impact strategy by several of the largest funders of LGBTQ issues. The creation of the strategy was driven by high rates of HIV infections in the South. This influx of funding was mainly aimed at advocacy (due to foundations such as Arcus and Gill) and direct services (due to Gilead and other HIV funders.)”
Ben Francisco Maulbeck, former president of Funders for LGBTQ issues, in reference to 2018 Tracking Report LGBTQ Grantmaking by US Foundations | Funders for LGBTQ Issues | 2020
42
“Between 2011 and 2015, foundations nationwide invested 56 cents per person in the South for every dollar per person they invested nationally, and they provided 30 cents per person for structural change work in the South for every dollar per person nationally.”
As The South Grows: So Grows The Nation | Council For Responsive Philanthropy & Grantmakers for Southern Progress | 2018
$ What does Candid’s grants data say about funding for racial equity in the United States? | Candid | 2020
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Of the total grantmaking for structural change in the South from 2011-2015, 37.6% was for economically disadvantaged people of any race or ethnicity, 12.8% for Black people, 12.5% for immigrants, 11.5% for women and girls, 7% for incarcerated people, 5.2% for Latinx, 2.5% for LGBTQ people, 0.7% for Asian and Pacific Islanders, and 0.5% for Indigenous people.
37.6% 12.8% Economically Black disadvantaged
5.2% Latinx
12.5% Immigrants
2.5% LGBTQ
11.5%
7%
Women Incarcerated people
0.7%
0.5%
Asian and Indigenous Pacific Islander
As The South Grows: So Grows The Nation | Council For Responsive Philanthropy & Grantmakers for Southern Progress | 2018
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The Result of
INCLUSIVE EXCELLENCE IN PERSONNEL
A “leadership pipeline” might be a myth, but a toxic organizational culture is not. Excuses only work for so long. It’s time to stop finding ways to absolve one another of our guilt for the lack of QTPOC individuals in leadership. Whether it’s, “There’s no interest in advancement,” or “The talent pool just isn’t there,” the reality is that the talent is there, the interest is there, and the positive outcomes are there. The main thing missing is the individuals looking outside of their personal and professional network.
Moving Away from Skewing the Leadership Pipeline Towards Those With Power
44
More people of color (56%) aspire to be executive directors than their white counterparts (36%).
47
Race to Lead Revisited | Building Movement Project | 2020
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“No longer can leadership replicate its own image while making statements about diversity and inclusion. The Black Lives Matter movement, and your Black employees, have called for an end to this disingenuous practice.“
BLACK LIVES MATTER
Disability in Philanthropy & Nonprofits: A Study on the Inclusion and Exclusion of the 1-in-5 People Who Live with a Disability and What You Can Do to Make Things Better| RespectAbility | 2019
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How to Modernize Leadership for Racial Inclusion | Forbes | 2020
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“‘Culture fit‘ can create cultures or subcultures in a workplace that people may refer to as an ‘old boys club,’ or a ‘fraternity’ or ‘sorority,’ because they represent a culture you must conform to if you want to be successful in the organization.“
Is Culture Fit Discrimination? | Great Place To Work | 2021
When looking into why people with disabilities are not included in inclusivity efforts within nonprofits, bias against people with disabilities was cited as the top reason by a more than 15% margin.
Both white and POC nonprofit professionals in POC-led organizations have more positive outlooks about remaining with their organization, having a voice, and advancement than in white-led organizations.
Race to Lead Revisited | Building Movement Project | 2020
49
Research has found that even when diversity, equity and inclusion (DEI) is a priority, disability is not.
Disability in Philanthropy & Nonprofits: A Study on the Inclusion and Exclusion of the 1-in-5 People Who Live with a Disability and What You Can Do to Make Things Better| RespectAbility | 2019
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More people of color (49%) reported that their race/ethnicity had a negative impact on their career in 2019 compared to 2016 (35%).
What does Candid’s grants data say about funding for racial equity in the United States? | Candid | 2020
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People of color have greater career aspirations and similar backgrounds to white individuals in the nonprofit sector. With no skills gap present between the two groups, people of color are being held back from leadership roles by unspoken and unconscious biases present within hiring managers.
What does Candid’s grants data say about funding for racial equity in the United States? | Candid | 2020
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Only 22% of foundations indicated they employed at least one staff member that identified as LGBTQ.
2020 Grantmaker Salary and Benefits Report | Council on Foundations | 2020
53
The research found that “the majority of LGBTQ people working in philanthropy are ‘in the closet’ —meaning they have not disclosed their sexual orientation or gender identity” to most work colleagues. “By comparison, the majority of LGBTQ people working in the corporate sector are ‘out.’”
The Philatropic Closet - LGBTQ People in Philatrophy | Funders for LGBTQ Issues | 2020
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THE EFFECTS OF COVID-19
On the Philanthropic Sector
COVID-19 is not an equal opportunity pandemic, and neither is the economic impact. The more data that emerges from 2020 the more we as a society become clear that COVID-19 disproportionately affected communities of color. The way our philanthropic system responded left out QTPOC (Queer and Trans People of Color) communities in a way that only highlights the very same disproportionate wealth distribution in our nation. Information and resources about COVID-19 was slow to become available in communities of color and created a ripple effect that impacted recovery, access to resources, sustainability, and progress towards a better, reimagined future.
The Ripple of COVID-19 across Nonprofits
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“Nearly half (46%) of Black-led organizations reported a loss in grant revenue, with less than a quarter (23%) experiencing an increase.“
57
Three-quarters of BIPOC-led nonprofits observed mental health consequences in the community they serve in response to COVID-19.
On the Frontlines | Building Movement Project | 2020
55
“This pandemic will have long-term impacts and cannot be solved by pre-2020 contribution amounts.“ Funders must trust in grantees “to make the best decisions for their communities as new issues arise by providing flexible and unrestricted grants.”
Philanthropy and COVID-19 Measuring one year of giving | Candid & Center for Disaster Philanthropy
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“For communities of color, the impending long-term impacts of COVID-19 on employment, financial stability, civic engagement, housing, education and health are on the horizon. We need to ensure that our continued community engagement does not inadvertently perpetuate systematic biases or current inequities. That is what our work must do.”
Racism is a Public Health Issue: What George Floyd’s Death Can Teach Funders | Colorado Health Foundation | 2020
On the Frontlines | Building Movement Project | 2020
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Just 9% of foundations reported an increase of funding related to people with disabilities since the pandemic began, despite people with disabilities being disproportionately affected by COVID-19.
Foundations Respond to Crisis. Towards Equity?| Center for Effective Philanthropy | 2020
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“‘I’m really worried about the trauma in our communities. No one’s talking about it. Our state is 85% white, but 70% of the COVID positive cases have been people of color.’” South Dakota POC non-profit leaderaffected by COVID-19.‘“
On the Frontlines | Building Movement Project | 2020
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“What we’re witnessing right now is the ‘normal’ that people of color have maddeningly endured every single day of their lives. The stress you’re feeling from the constraints of the COVID-19 pandemic—the loss, exhaustion, fear and grief—is what people of color shoulder every day. Black, Latinx, Asian American/Pacific Islander, Indigenous, immigrant and refugee communities have continued to persevere despite these shackles for generations.”
Racism is a Public Health Issue: What George Floyd’s Death Can Teach Funders | Colorado Health Foundation | 2020
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“Recent COVID-19 data shows that Black communities in the U.S. are experiencing higher rates of hospitalization and death compared to whites – exacerbated by many of the same health disparities that impact the HIV care continuum.”
Letter to the CDC calling for Racism to be Declared a Public Health Crisis from the Federal AIDS Policy Partnership | San Francisco AIDS Foundation | 2020
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“Black patients are nearly two times as likely as whites to die of the virus, while Black men have the highest rates of COVID-19 deaths.”
Education Usually Improves Health. But Racism Sabotages Benefits For Black Men | NPR | 2021
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The New Way Forward for
COMMUNITY INVESTMENT
What if we shifted the philanthropic narrative? The global pandemic, racial uprising and worldwide activism of 2020 have given our philanthropic system a golden ticket to change. The next big thing is an ecosystem of support for queer and trans people of c olor, or QTPOC, communities that truly centers QTPOC folks. When our systems challenge their old ways of thinking and invest in solutions created and led by and for the people in our communities, meaningful sustainable change will be right around the corner when foundations are able to augment their decision-making and community relationships by meaningfully engaging QTPOC. We must resist the compulsion to “return to normal.”The fissures that COVID-19 exposed made it clear to most that what existed before the pandemic was still a status-quo that did not value QTPOC lives. Because of this, the uneven impacts on communities of color, which include a high percentage of working-class people will be felt for years to come. Philanthropy has the opportunity to reconstruct these systems and invest in possibilities that challenge the oppression and inhumanity that allowed the reality of Black and brown communities to experience a reduction in their life expectancy as a result of a pandemic. Reject the return to normal and embrace the necessary shifts that will edge us closer to a new reality where all communities have access and opportunity to thrive.
Reimagining of Philanthropy
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“‘We are trying to move away from a charity minded model and move into supporting the liberation and transformation of communities (along with health and well-being).‘“
Philanthropy’s Increased Focus On Health Equity Post–COVID-19 | Health Affairs Journal | 2021
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“All of us in the nonprofit ecosystem are party to a charade with terrible consequences—… foundations, governments, and donors force nonprofits to submit proposals that do not include the actual costs of the projects we’re funding…. At Ford, we have been willing participants in this charade. Our policy of 10 percent overhead on project grants in no way allows for covering the actual costs to administer a project. And to be honest, we’ve known it.“ - Darren Walker, president of the Ford Foundation
What Foundations Are Missing About Capacity Building | Harvard Business Review | 2016
For seven consecutive years, the majority of nonprofits reported that they had less than three months of operating reserves on hand, and close to 10% had less than 30 days of cash on hand.
State of the Sector | Nonprofit Finance Board | 2018
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“A vicious cycle fuels the persistent underfunding of overhead. 1) Funders’ unrealistic expectations about how much it costs to run a nonprofit. 2) Nonprofits feel pressure to conform to funders’ unrealistic expectations. 3) Nonprofits respond to this pressure in two ways: They spend too little on overhead, and they underreport their expenditures on tax forms and in fundraising materials. This underspending and underreporting in turn perpetuates funders’ unrealistic expectations. Over time, funders expect grantees to do more and more with less and less—a cycle that slowly starves nonprofits.” Unrealistic expe
to
a in g
nd u
Pressure
nderreportin
s
g
ion
cat
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Why I’m giving up my board seat to make room for someone from an underrepresented community | Fortune | 2020
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co
n fo
rm
Unders
pen
d
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Drowning in Paperwork, Distracted from Purpose | Foundation Center | 2008
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“‘The best organizations don’t want to work for us, and the ones who want to work for us are not the best,’” laments a foundation director about the impact of the organization’s 15 percent cap on indirect costs.”
“If nonprofits committed to understanding their true cost of operations and funders shifted to paying grantees what it takes to get the job done, the starvation cycle would end.”
Pay What It Takes Philanthropy | Stanford Social Innovation Review | 2016
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The Nonprofit Starvation Cycle | Stanford Social Innovation Review | 2009
“Nonprofits don’t really receive grants. They receive ‘net grants’—the total amount of funding minus the true costs of getting and managing the grant. Nonprofits must weigh the possibility of funding against the cost of seeking it.”
“We will not solve this problem by adding a few ‘diversity picks’ to our boards or participating in implicit bias training sessions. I believe we need to fundamentally reform our governing structures and giving practices.” - Tim Disney, chair of the CalArts Board of Trustees and board member at the Southern California Institute of Architecture
“There is growing consensus among donors about the importance of general operating support and capacity-building funding in supporting nonprofits working to improve lives in their communities. This is precisely the kind of funding that strengthens organizations and enables them to invest in growth and innovation.”
Pay What It Takes Philanthropy | Stanford Social Innovation Review | 2016
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General operating support—“which by its very nature is not linked to specific outcomes— represents a vote of confidence from a funder to a grantee, premised on prioritizing support that goes to the whole institution, rather than to distinct projects.”
Pay What It Takes Philanthropy | Stanford Social Innovation Review | 2016
Pay-What-It-Takes Philanthropy | Stanford Social Innovation Review | 2016
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“‘You can’t have a racial-justice grant-making program if you’re not practicing racial equity in the investment practices of your endowment.’” - Dana Lanze, CEO of the Confluence Philanthropy
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Billions Pledged for Racial Equity Giving Not Necessarily Adding Up to Systemic Change | The Chronicle of Philanthropy | 2021
74
Philanthropy is really centered on this notion of charity and benevolence to its core. There are assumptions of privilege and power wrapped up in that. For us to see progress, it’s not just about trusting the Black leader. It’s not just about having Black folks at the table. It’s about right-sizing those investments accordingly. It’s about us trusting Black folks to tackle Black liberation and Black solutions in a meaningful way. - Tené Traylor, fund advisor for the Kendeda Fund
Free To Fail | The Center For Effective Philanthropy | 2017
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Nonprofit Leaders of Color Speak Out About Struggles and Triumphs | Chronicle of Philanthropy | 2019
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“Ensuring the impact of this year’s pledges will require, ‘active, dedicated, focused pursuit,’ even if the nation’s attention moves on. Everything comes down to: Is the CEO committed and do you have structures in place that are sustainable? Do you have accountability?” - Cyrus Mehri, civil-rights attorney who has won some of the largest race-discrimination cases in the U.S.
Companies Have Promised $35 Billion Toward Racial Equity. Where Is the Money Going? | The Wall Street Journal | 2020
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If foundations put a dollar into nonprofit fundraising, they can produce as much as $10 in new revenue, which is money they can use to fund $10 worth of programs or $10 worth of capacity-building.
What Foundations Are Missing About Capacity Building | Harvard Business Review | 2016
“We need to keep in mind that philanthropy is a collaborative searching activity. Our core business is experimentation and adaptation. It’s imaging, hypothesizing, testing, evaluating, going back to the drawing board, re-hypothesizing and ultimately succeeding. Implicit in this reality is risk. Not operational risk and not undisciplined programmatic risk without grounding in strategies and logic models, but intelligent, conscious risk that excites anticipation more than fear.” - Kevin Jennings, former executive director of Arcus Foundation
“...To dismantle systems of discrimination and subordination, leaders must undergo the same shifts of heart, mind and behavior that they want for the organization as a whole and then translate those personal shifts into real, lasting change in their companies.”
Getting Serious About Diversity: Enough Already with the Business Case | Harvard Business Review | 2020
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“Cultures of curiosity cannot exist alongside cultures of fear. Our teams must be able to talk to us when something goes wrong without fear of retribution, negative performance reviews, and even more simply, without us yelling at them. Winning and innovating never happens without some losing and failing along the way.”
Getting Serious About Diversity: Enough Already with the Business Case | Harvard Business Review | 2020
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“Existing standards of survey design demand reconsideration because of factors such as their reliance on discrete answer possibilities, the reification of cisnormative ideologies that imply that trans women and men are not real women and men, and the implication of identity as static and unchanging.”
Data for queer lives: How LGBTQ gender and sexuality identities challenge norms of demographics | SAGE Journals | 2020
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“Philanthropy needs to respond to the scale of the challenges we are facing. Post-pandemic, our grantees, communities and partner organizations will need to be strong to re-imagine and rebuild systems centered on racial equity. They have the leadership, knowledge and resolve to advance their communities; we want to be a catalytic partner in that process.” - La June Montgomery Tabron, W.K. Kellogg Foundation President and CEO.
Five Major Foundations to Increase Support with over $1.7 Billion to Assist Nonprofit Organizations in Wake of Global Pandemic | Ford Foundation | 2020
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A New Way Forward in Philanthropy Philanthropy must go beyond giving just for recognition or legacy purposes. In order for these investments to have profound meaning, they should uplift those most disempowered by the current system with the tools for sustained impact. This also means taking a serious look at nonprofits doing community-immersed work where each stakeholder is viewed as a genuine partner. Philanthropy that only implements surface-level reforms that do not relinquish power to those most proximal to the system’s deleterious effects is neither sustainable nor relevant. Philanthropy does not lead or engineer change or movements; we must follow and flank the change agents in our communities with strategies that are co-created, vetted and approved by community leaders and afford them substantive decision-making authority within our institutions.