As we near the end of the calendar year, many in the MCF community are likely reflecting on how they can help communities in need. We asked MCF’s philanthropy advisors for their thoughts on how donors can make charitable contributions with meaningful impact. Here are a few of their suggestions:
Give to communities that are closest to pain
Last year societies around the world reckoned with racial justice and grappled with COVID-19. This year, communities are continuing to suffer from the aftershocks of COVID-19; reeling from the effects of climate change; experiencing acute financial problems despite government-led financial assistance; witnessing increased political polarization and hate crimes; and facing growing wealth gaps and heightened disparities in health, education, homeownership, and more.
According to a national poll conducted by NPR, the Robert Wood Johnson Foundation, and the Harvard T.H. Chan School of Public Health, two-thirds of parents say their kids have fallen behind in school; one in five households say someone in the home has been unable to get medical care for a serious condition; and thirty-eight percent of household across the nation report facing serious financial problems in the past few months. Unfortunately, communities of color are most affected. For example, the percentage of households facing serious financial problems rose to 50% among Latino, Black, and Native American households, compared to 29% of white households. This racial disparity is mirrored in many other socio-economic factors with Black and Brown families bearing an uneven burden of the pandemic’s impact.
To make the most impact, donors may benefit from analyzing their philanthropic giving areas with an explicit equity overlay and supporting grassroots community efforts. For example, if you are interested in supporting small business owners, MCF advisors recommend that you review the data to see which populations are most affected by loss of business and then try to find nonprofit organizations that are explicitly supporting those communities that are closest to the pain. If we turn to data, last year Americans saw a 41% drop in active Black-business owners, compared to a 17% drop among White-owners, 26% drop in Asian owners, and 32% drop in Latinx owners. Organizations like Black Girl Ventures and Grameen America have risen to the challenge and are providing training, support, and capital to Black and Brown female entrepreneurs across the country so they can start and sustain small businesses.
For more information, view MCF’s new offering, The Lens, which allows MCF donors to add an increased level of intention to their philanthropy by using a race and/or gender equity framework.
Give to nonprofit leaders who represent the communities they serve
As mentioned above, there are deep disparities in health, economic well-being, access to political power, quality education, and safe and healthy environments that are inextricably linked to race and systemic racism. Thus, when developing solutions, it is important to center equity in philanthropic strategy. As part of the strategy, we believe that supporting organizations led by people of color and with staffing structures that reflect the communities they serve is an important piece of the puzzle because BIPOC leaders often bring strategies that intimately understand the racialized experiences of communities of color.
However, many recent research publications have highlighted that there are deep disparities in revenues and unrestricted assets between white-led and Black-led organizations. According to Bridgespan and Echoing Green, “the revenues of Black-led organizations are 45% smaller than those of the white-led organizations, and the unrestricted net assets of the Black-led organizations are a whopping 91% smaller than the white-led organizations.” The Stanford Social Innovation Review recently shared that “of the total number of big bets for social change documented between 2010 and 2014, only 11% went to organizations led by people of color.” Finally, according to the National Committee for Responsive Philanthropy, only 1% of foundation funding was designated specifically for Black communities despite the statistics about where disparities exist.
Donors can meaningfully address disparities facing communities around the world by conscientiously identifying and supporting grassroot organizations and nonprofits that are BIPOC-led and serving. For more information, ask your philanthropic advisor for guidance on Black and Brown-led organizations or review existing repositories of BIPOC-led organizations like ASCEND: BLO (Bay Area) or Give Black (National).
Give multi-year, unrestricted funding
Organizations are often founded to meet a need in the community, and these needs are often complex and intricately connected with a wide variety of social variables. In order to effectively design interventions to make an impact on the social issue at hand, nonprofits need resources, time, and trust. Just like businesses, they also must employ skilled staff, use updated technology, and maintain transparent accounting and reporting tools.
Contributions that provide unrestricted or general operating support give organizations the ability to self-determine the best way to use resources. Flexible funding allows organizations to allocate resources where they are needed the most, which ultimately makes room for efficacy, innovation, and growth. Multi-year funding also allows nonprofits to plan for the long-term rather than just one year at a time which gives organizations the breathing room they need to plan and pursue long-term strategic impact without worrying about securing the next round of funding.
A key example that highlights the power of multi-year, unrestricted funding occurred during the onset of COVID-19. Those organizations with strong multi-year, unrestricted funding in place were able to respond to the crisis with dexterity and speed. Because they were not restricted by donations that were allocated for specific programs or initiatives, they were able to quickly pivot funds from specific programs (e.g., in-person education workshops) to relief efforts (e.g. food and housing stipends to families that had lost their jobs), ultimately effectively and efficiently meeting the need of the community.
Reference
Cowley, S. (2021, October 12). Racial bias skewed small-business relief lending, study says. The New York Times. https://www.nytimes.com/2021/10/11/business/ppp-loans-covid-racial-bias.html?campaign_id=9&emc=edit_nn_20211012&instance_id=42622&nl=the-morning®i_id=129823636&segment_id=71397&te=1&user_id=f4f246543e484481e7bdcd40167432a3
Doresey, C., Kim, P, Daniels, C., Sakaue, L., & Savage, B. (2020, May 4). Overcoming the racial bias in philanthropic funding. Stanford Social Innovation Review. https://ssir.org/articles/entry/overcoming_the_racial_bias_in_philanthropic_funding
Simmons-Duffin, S. & Neel, J. (2021, October 12) NPR Poll: The delta surge pushed Americans further behind in all walks of life. National public Radio. https://www.npr.org/sections/health-shots/2021/10/12/1044475441/npr-poll-the-delta-surge-pushed-americans-further-behind-in-all-walks-of-life