Small Black-Led Nonprofits Are Less Likely To Receive Sustained Funding Support Following The 2020 Racial Reckoning, Report Says

A new report has revealed inconsistencies in funding support for small Black-led nonprofits.

Candid, a nonprofit organization, and ABFE, a membership-based philanthropic organization advocating for Black communities, released a report that sheds light on the dynamics between Black-led nonprofits and new and continued funders.

The report titled “From Transaction to Transformation: Three Ways Foundations Can Invest in Black-Led Nonprofits for Lasting Change,” considers grant data from 2016–2023 for more than 3,500 nonprofits along with interviews with Black nonprofit leaders and foundation representatives.

The results showed that Black-led nonprofits received 60% of funding from continuing investors, with the remaining 40% coming from new investors. For small Black-led nonprofits, the report found that new funders accounted for 64% of funding, while the remaining 36% came from continuing funders.

Furthermore, new funders for small Black-led nonprofits represented 70-75% of foundation funding from 2018 to 2021, amidst the COVID-19 pandemic and the murder of George Floyd. While there was more support from new funders — with most grants coming from them — there was also less sustained support year over year from continued funders. Additionally, half of small Black-led nonprofits reported having only one funder at a time and fewer new and continuing funders annually than large Black-led and other nonprofits.

“Essentially, small Black-led nonprofits needed to start over at the beginning of each year, building new funder relationships. Moreover, given that small Black-led nonprofits saw no significant funding increase from 2016 to 2023, this finding suggests that neither new nor continuing funders provided increased financial support to small Black-led nonprofits following George Floyd’s murder,” the report said.

Small Black-led nonprofits averaged two new and two continuing funders annually, while large Black-led nonprofits averaged five new and four continuing funders. Compared with large nonprofits, large Black-led nonprofits had fewer ongoing funders annually, which the report suggests hindered their ability to strengthen their networks and connect with potential funders.

Relationships Make A Big Impact

Relationships are vital to the lifeline of Black-led nonprofits, ensuring sustained funding beyond initial investments. The report surveyed 24 leaders from Black-led nonprofits, who shared six barriers that hinder relationships with funders. The three underlying themes were underinvestment in connection, underinvestment in relationship building, and underinvestment in trust. Within those themes, further challenges emerged, including failing to respect nonprofit expertise, discriminatory double standards, exclusion from funder networks, superficial relationships, and a lack of sustained capacity-building support.

“I don’t want to just get the grant. I want to sustain the grant. I want to get the grant next year, and the year after that and more grants. I want to be able to do that with excellence, but if I don’t get the support I need, that is just not going to happen,” one leader said in the report.

Susan Taylor Batten, president and chief executive officer of ABFE, said in a press release:

“Black-led nonprofit leaders are being asked to meet rising community needs while navigating an increasingly hostile environment toward race-explicit work, often without the flexible, sustained funding needed to build staff, strengthen infrastructure, or plan for the long term. This cycle of short-lived transactional investments keeps organizations doing the crucial work in communities in constant survival mode rather than scaling the solutions our communities need.”

In contrast, these leaders also offered six traits that lead to healthy funder partnerships. Among those listed was championing a nonprofit’s work, eliminating barriers, communicating openly, fostering connections, considering Black representation, and demonstrating commitment.

“When funders want to support your work and they truly believe in what you’re doing, they work very diligently and explicitly to eliminate barriers,” one leader said in the report. “They take barriers out of the way, so that there is nothing standing between you and the resource that [they’re] trying to make available to you.”

While financial support is helpful, the report also suggests that social capital and engagement are also valuable resources. For example, connecting Black-led nonprofits to other nonprofit leaders and being curious about their work and discerning on helpful introductions that can lead to opportunities.

Batten hopes the findings in the report will lead to interest from the Black philanthropic community to support Black-led nonprofits.

The post Small Black-Led Nonprofits Are Less Likely To Receive Sustained Funding Support Following The 2020 Racial Reckoning, Report Says appeared first on AfroTech.

The post Small Black-Led Nonprofits Are Less Likely To Receive Sustained Funding Support Following The 2020 Racial Reckoning, Report Says appeared first on AfroTech.