Giving and racial equity: A starting point

Black canvas with multicolored hand prints.

The challenges in our society have never been more urgent, particularly those related to the lack of racial equity and economic mobility. Access, opportunity and fair outcomes are not equally available to all in the United States. As donors, we see these issues and want to make a difference but often don’t know how to start. This guide offers four steps to help you incorporate racial equity goals into your giving strategy.

As with all philanthropy, giving through a racial equity lens is nuanced and can be challenging. The journey is iterative and nonlinear, but when done well, giving can positively affect both the community and you as a donor.

Step 1 – Listen to and learn from communities you serve

Effective philanthropy requires an active and ongoing dialogue among donors, nonprofits and community stakeholders. When looking to create racial justice outcomes, philanthropists must seek out and prioritize the voices of those who are most directly affected by inequity.

Leverage information from a broad range of sources, including local, identity-based and other publications. When reaching out directly to community members, leaders, organizers and practitioners, be respectful of their time. Don’t rely on them to educate you about race-related issues. Be aware that many will not be comfortable sharing personal stories. Consider compensating these individuals and groups when seeking their specialized and valuable expertise to inform your giving strategy.

Charitable giving benefits from the inclusion of diverse viewpoints and experiences. You should consider:

Including current and former grantees, community members and people of diverse backgrounds and ways of thinking in your grant selection process.
Allowing them to influence or set funding priorities, sourcing grant applicants and serve as voting members of grants committees or your foundation board.
Providing assets to giving circles or organizations run by local leaders expressly for the purpose of re-granting in their communities.

Step 2 – Challenge your due diligence process

As you assess your giving through a racial equity lens, analyze and evaluate your grantee due diligence process considering these priorities.

Leadership and mission
Studies show that less funding is directed to nonprofits who are led by and serve Black, Latinx, Asian American and Pacific Islander, and Native American individuals. And those grant dollars generally come with more restrictions.¹ This is true for both emerging and established nonprofits.

^{45^%}

less revenue at Black-led nonprofits compared to White-led organizations, even when focusing on the same issues.²

^{0.2^%}

of foundation grants target Asian Americans and Pacific Islanders despite being the fastest growing racial group in the country.⁴

^{1.3^%}

of all philanthropic dollars goes to Latinx communities yet Latinx represent 18% of the U.S. population.³

^{0.23^%}

of philanthropic funds are awarded to Native-led organizations although Native Americans make up 2% of the U.S. population. ⁵

Analyze your giving in recent years – as well as your proposed donations this year – to determine which nonprofits you support are led by and benefit those who you intend to serve.

Grantee budget size
As you look at your grants portfolio, are you funding a mix of established and emerging organizations? There is a benefit to supporting organizations with deep capacity and demonstrated impact, as well as those that are developing and implementing innovative programs with limited resources. When striking this balance, keep in mind the correlation previously noted between an organization being led by an ethnically diverse leader and lower levels of funding.

Consider how you’re sourcing new nonprofits to support. If you’re not receiving applications from emerging organizations and/or organizations led by ethnically diverse leaders, repeat Step 1. If you’re actively reaching out to the communities you intend to support but are still funding primarily larger organizations, it may be that your process is too burdensome. Remove any unnecessary logistical, technical or technological barriers to requesting funding. Consider phone calls or site visits instead of applications for organizations that may not have the resources to apply.

Another option is to accept applications previously submitted to other funders. Challenge yourself to consider whether an application is necessary. You may be able to access all of the information you need to make an informed decision from IRS filings or other readily available public information.

Organizational sustainability
Many donors assess an organization’s capacity to receive and effectively deploy additional funding on the basis of prior grants or personal connections. Again, many organizations led by and serving people subject to racial inequity often are undercapitalized, which makes them more vulnerable to closure in hard times. Think about whether your giving decisions perpetuate this cycle of inequity in giving. If you focus on capital or project-based funding, keep in mind that general operating support can be especially helpful to all organizations as they strive to be agile in response to evolving community needs.

Tolerance for uncertainty
The journey toward bold social change may be circuitous or contain dead ends. Organizations that focus on racial justice are often required to adapt to rapidly changing conditions. That may lead to a range of outcomes that are unanticipated or may differ from those initially envisioned. Your willingness to deploy philanthropy as risk capital will pay dividends, possibly in ways you may not expect and on a timeline you can’t predict.

The implicit associations we harbor in our subconscious cause us to have feelings and attitudes about other people based on characteristics such as race, ethnicity, age, and appearance. These associations develop over the course of a lifetime beginning at a very early age through exposure to direct and indirect messages⁶

Step 3 – Ongoing Evaluation and Education

Consider your indicators of progress and success. Are you hoping to diversify your list of grantees? Are you seeking to create a committee comprised of community voices? Are you looking for a change in composition of your board or staff?

These and other incremental changes can be planned for and adopted over a period of time. Racial equity issues call for urgent and timely responses but also require an understanding that there are short, medium and long-term milestones. Opportunities to fund projects that will have clear outcomes in the short term are important. But if you’re seeking systems-level transformation, it’s important to remember that meaningful change may require sustained commitment over decades rather than months or years. It takes patience and dedication to develop long lasting solutions.

Step 4 – Self-reflect

An essential step, perhaps the most important, is understanding and managing your own biases. This is critical whether you plan to give on your own, with your family, or are making collaborative decisions with fellow board or staff members. The many facets that comprise who you are — your identity and perspective — can have a profound impact on how you approach racial equity issue.

Implicit bias is the unconscious use of racial and other stereotypes. These biases often are so entrenched that they influence our opinions and actions even when we aspire to be unbiased.

To identify your own implicit biases and begin to counteract them, take Harvard’s Implicit Association Test.

We know that overcoming deeply ingrained views can be uncomfortable and requires honesty, vigilance, and ongoing education. When we understand ourselves better by engaging in truthful self-reflection, we are better equipped to achieve racial equity goals with our giving.

Take action

Contact your advisor to discuss your giving priorities

To learn more, use these resources:

¹ https://www.bridgespan.org/bridgespan/Images/articles/racial-equity-and-philanthropy/racial-equity-and-philanthropy.pdf

² https://www.nationalcollaborative.org/kirwan-institutes-state-science-implicit-bias-review-2015/

³ https://candid.org/about/press-room/releases/new-dashboard-documents-the-landscape-of-foundation-funding-in-the-latinx-community

⁴ https://aapip.org/resources/seeking-to-soar-foundation-funding-for-asian-american-and-pacific-islander-communities

⁵ https://philanthropynewsdigest.org/news/native-american-causes-underfunded-due-to-misconceptions-study-finds

⁶ https://www.nationalcollaborative.org/kirwan-institutes-state-science-implicit-bias-review-2015/

Institutional Investments & Philanthropic Solutions (also referred to as “Philanthropic Solutions" or “II&PS") is part of Bank of America Private Bank, a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp."). Trust, fiduciary, and investment management services are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A. and its agents.