Black-led nonprofits didn’t see the lasting funding boosts promised after 2020’s racial reckoning

NEW YORK (AP) — The racial reckoning that followed George Floyd ‘s murder in 2020 carried hopes of new support for disproportionately underfunded, Black-led nonprofits. American companies stepped up donations to historically Black colleges and universities. Major climate funders pledged to give more toward minority groups. Large donors sought to narrow the racial wealth gap.

But new research released Tuesday shows that such financial gains for many Black-led nonprofits were short-lived, if they happened at all. A subset of large, Black-led nonprofits saw only temporary funding increases between 2020 and 2022, according to the analysis by nonprofit research service Candid and Black philanthropy group ABFE. Smaller organizations saw no significant change.

The pattern of disinvestment put many community groups at a greater disadvantage when President Donald Trump’s policies curtailed funding for diversity, equity and inclusion. The nonprofit sector’s struggles deepened as the administration threatened a range of social service programs, left future grants uncertain by cutting agency staff and chilled racial justice funding through anti-DEI executive orders.

Black Voters Matter co-founder Cliff Albright noted these community nonprofits are the same ones now tasked with helping more and more low-income families deal with spiking healthcare costs and rising food prices.

“We’re literally being asked to do more with less resources,” Albright told The Associated Press.

Small, Black-led nonprofits tended to have to rely on new rather than continuing funders, losing out on transformational relationships that sustain their longer-term goals and cushion them through challenging periods. These small organizations — those with annual expenses of $1 million or less — got just over one-third of their funding from continuing supporters, according to the report.

The dynamic rang true for a South Side Chicago group serving a predominantly Black neighborhood among the city’s most impoverished. Asiaha Butler, the CEO of the Resident Association of Greater Englewood, cofounded the nonprofit more than 15 years ago to empower her neighbors to combat their area’s negative narratives.

That mission had a handful of consistent backers. But summer 2020 brought more than two dozen new funders.

“All of a sudden, we were desirable for people to fund,” recalled Butler, adding the “spurt” became a “curse” as the quick infusion of capital tapered off.

“We started seeing this revenue and thinking we’re gaining really great relationships with funders,” she said. “And, really, those priorities shifted quickly.”

Lacking relationships

Foundations lacked relationships with Black organizations of any scale prior to 2020, according to ABFE CEO Susan Taylor Batten.

Black philanthropy professionals say that distance created a scramble when protestors demanded businesses and philanthropies address systemic racism.

Kia Croom, whose fundraising firm works with nonprofits in Black communities, said her clients received more funding than ever from corporations. Some hired additional development staff to meet the demand — and then underwent layoffs when funds disappeared.

“It was just a very transactional gift at best,” she said.

Positive Results Center CEO Kandee Lewis oversees a Los Angeles nonprofit assisting survivors of domestic violence and other harms. It was wonderful, she said, to receive checks from new supporters. But oftentimes, the support turned out to be a one-time donation rather than the beginning of a relationship.

Lewis felt the funding came only because her group was Black-led — not because funders understood its work.

“They were so busy trying to figure out who was who that they didn’t really take time to get to know people,” she said.

Limited networks

Jaleesa Hall knows philanthropy is a relationship game.

She heads Raising A Village Foundation, which aims to advance educational equity through tutoring programs. She didn’t have many high net worth members in her network when she founded the Washington, D.C. nonprofit more than six years ago.

That circle made it difficult to catch the attention of foundations, which she said “haven’t really cracked” how to find potential grantees outside of their existing web of connections.

“Small, Black-led nonprofits simply aren’t in those rooms to begin with,” Hall said.

Most of their foundation grant dollars came from first-time funders, according to the report.

Cathleen Clerkin, the associate vice president of research at Candid, said the nonprofits’ work is made even more challenging by the “song and dance” necessary to secure long-term investment every year.

“They’re just constantly going on first dates with new funders and hoping that somebody will invest in them and understand them,” she said.

Small nonprofit leaders are so focused on day-to-day upkeep and financial viability that they don’t have time to attend networking opportunities or money to fly out for national convenings.

T’Pring Westbrook, a nonresident fellow at the Urban Institute’s Center on Nonprofits and Philanthropy, co-founded a consulting group that works with small nonprofits. The problem isn’t that foundations don’t want to support marginalized communities, she said, but that they do so through “trend funding.”

“Maybe during Black History Month there will be a funding campaign,” she said. “But the thing about a campaign is a campaign doesn’t build sustainability.”

Restrictive practices

Small nonprofits say they face additional barriers, regardless of race, including grant eligibility requirements. And limited staff may prevent qualifying organizations from keeping up with foundations’ required weekly or monthly reports on the status of projects they’ve funded.

“It ends up feeling like a burden,” Hall explained. “The juice isn’t worth the squeeze.”

Philanthropy has seen a sector-wide shift towards trust-based models that offer general operating support and multi-year grants, acknowledging nonprofits’ expertise on how to best fulfill their missions. But Batten, the ABFE leader, said Black-led nonprofits generally have not reaped the benefits of those best practices.

The report showed Black-led nonprofits had significantly fewer continuing funders than their non-Black counterparts. Only one-third received general operating support, compared to just over half of other nonprofits.

“We are still seeing remnants of bad practice when it comes to investing in Black communities,” Batten said. “There’s just no way for a foundation to move its mission for communities in this country, let alone Black nonprofits to move theirs, if we do not evolve this sector.”

‘Pulling teeth’ in Chicago

Butler, the Chicago neighborhood association leader, hears excuses now from supporters who gave at the height of the 2020 racial justice movement: “Priorities have shifted,” they tell her, or there are “new strategic goals.”

“Little buzz words that just say perhaps this nonprofit — grassroots, Black-led, very focused on the Black population — is probably just not in peoples’ cards to continue to support,” she said.

That downturn delayed a nearly $7 million capital project building off their economic justice work after the post-George Floyd civil unrest. An 8,800-square-foot (817 square-meter) building would include a dine-in restaurant and another Black-owned business. One tenant would provide workforce development trainings. Her goal is to strengthen Englewood’s economic and social fabric through a thriving Black business district.

By 2023, she had secured a $1 million grant — her nonprofit’s largest — to start the project. But she compared her search for additional funding to “pulling teeth.” Past philanthropic partners withheld support. Their prospects weren’t good.

She’s turning to public funding. The City of Chicago provided a $2.5 million grant and Butler said another $1.5 million state award is pending.

“Things shifted and so we didn’t want to start soliciting for a capital campaign,” she said. “The timing was off.”

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