3 Things small funders can do to turn racial equity rhetoric into reality

Small foundations can influence their communities in ways large foundations can’t.

Written by: Ryan Schlegel

Date: February 04, 2020

It’s easy to forget, in a sector where Gateses, Fords, Lillys and Hewletts dominate the discourse, that most institutional philanthropies are small, leanly staffed, little-known foundations.

In any given year, roughly a quarter of all U.S. grantmaking comes from the 90%+ of foundations whose annual giving is less than $10 million.

Recent research from Exponent Philanthropy suggests those small foundations believe racial equity is relevant to their work.

At the same time, the data also show that they are overwhelmingly staffed and led by white people.

Exponent’s 2019 Foundation Operations and Management Report survey, which is available to Exponent members and was generously shared with NCRP, found that:

  • 75% of respondent foundations have white-only boards of directors.
  • 78% have white-only staffs.
  • 89% have white CEOs.

These findings are striking in light of the fact that the U.S. as whole is about 40% people of color. The Census Bureau estimates that this year more than half of U.S. children will be non-white.

The contrast between the nation’s demographics and the demographics of small foundations, then, appear to reflect – or even amplify – the racialized nature of the inequitable distribution of wealth and power.

Exponent survey respondent foundations aren’t oblivious to the role that systemic racism plays in the challenges they seek to address through their funding.

Almost 75% of foundations answered that racial equity was at least somewhat relevant to their missions, and more than 33% said that it was very relevant.

Philanthropy lives in a bubble, but isn’t immune to culture change.

It seems likely that the embrace of racial equity is a result of the public awareness and discourse on the issue created by the Movement for Black Lives, the pro-immigrant movement and other movements that center people of color (alongside, of course, the ongoing work of philanthropic sector racial equity advocates like ABFE, Philanthropic Racial Equity and Grantmakers for Effective Organizations).

Unfortunately, that embrace doesn’t appear to have shifted from words to action for many of the surveyed foundations.

Fully 75% said they had made no grants for advocacy or public policy work in the last year, despite NCRP research that shows that grantmaking for advocacy and other social justice strategies is a high-leverage strategy for affecting the kind of structural change necessary to achieve racial equity.

Funders may face operational barriers such as the fact that many small foundations have all-white boards because they have relied only on family to help lead.

But that’s not the only way to run an effective philanthropy. Some of the country’s leading family foundations have found great success adding non-family members to their boards of directors.

As the country and the philanthropic sector moves into a new decade, here are 3 first steps small foundations can take to turn racial equity rhetoric and resolutions into reality:

1. Create an equity baseline using the Power Moves assessment to evaluate your foundation through an equity lens.

NCRP has distilled years of social justice evaluation research into a thorough but easy-to-use self-evaluative framework.

Power Moves is a complete self-assessment toolkit to determine how well you are building, sharing and wielding power and identify ways to transform your programs and operations for lasting, equitable impact.

You may find opportunities for changes in your grantmaking such as funding more people-of-color led organizations, but also in your operations for example by adding non-family members to boards.

It’s especially well-suited to small foundations who may lack the in-house evaluative expertise many large funders possess.

2. Adopt the “Rooney Rule” to hire with racial equity in mind.

It may be time for a philanthropic version of the “Rooney Rule,” requiring that at least 1 person of color is interviewed for each open position, for recruiting new staff.

Organizational psychology research has shown that diverse staff leads to better business outcomes, and there’s every reason to think the same is true for philanthropic outcomes.

The pipelines for excellent Black, Hispanic, Native and other non-white philanthropic leaders exist. Consider the ways your current hiring practices may not be reaching those pipelines and knock down the barriers to better recruitment and more impact.

3. Use the opportunity this year to make an advocacy test grant.

This year is a pivotal year for the future of our communities and our country, with the census and elections from the top of the ballot down to the bottom.

There are plenty of ways that 501(c)3 organizations can engage in important issue advocacy around the policies and processes (such as the census) that will influence the health, wealth and general well-being of Americans for years to come.

More than perhaps anything else you could fund this year, advocacy is a high-leverage investment in our future.

Consider making a test grant for advocacy in your community around the issues you care about. If any of your current grantees already do advocacy work, speak with them to help guide you.

Small funders have an opportunity to impact their local communities in ways that large national funders simply can’t.

With an increased focus on turning racial equity intent into impact, America’s small foundations can create change from the ground up by making a New Year’s resolution to turn their rhetoric into reality.

Ryan Schlegel is NCRP’s director of research. Follow @r_j_schlegel and @NCRP on Twitter.