Michael McAfee, president and CEO of PolicyLink said, “We undertook this work to elevate the capital needs required to win on equity and attract significant investment to equity movement leaders, especially those on the front lines. Understanding how funds are aggregated and deployed is a critical piece of that effort.”
Willa Seldon, Bridgespan partner and co-author of the report, agreed, saying, “For philanthropy to hold itself accountable to making progress towards an equitable nation, we need funders to share how much of their funding is going to racial equity work—including how much is going to structural or systems change efforts, to organizations led by people of color, and in multi-year general support.”
According to data provided by Candid, roughly $11.9 billion in philanthropic capital was pledged for racial equity in 2020—more than the racial equity funding that Candid has tracked for the past nine years combined. However, based on currently reported grant data Candid has collected, only $1.5 billion in funding for racial equity in 2020 can be tracked to recipients.
Additionally, the study points to three key equity funding concerns that would exist even if all the money pledged were to be deployed:
- The money may not be going to the full range of work that is needed to support transformative change. There needs to be an intentional focus to ensure that funding is directed with the long game in mind, toward initiatives that address the root causes of inequity, not just the immediate problem at hand.
- The money is insufficient to address the historic undercapitalization of organizations doing racial equity work, which are largely led by people of color and focused on systems change.
- The money will disappear: Concerns run high that 2020 was an anomaly, with interest in racial equity energized by a perfect storm generated by the murder of George Floyd and others and a global pandemic—a combination that hopefully will not be replicated.
Leaders interviewed as part of the research also cautioned that funders should anticipate and prepare for opposition and backlash to nearly every aspect of equity work. According to Bridgespan Partner and co-author of the work Laura Lanzerotti, “Interviewees also cited donor reluctance to engage in policy advocacy as another challenge, even though it is a critical part of good grantmaking for racial equity.”
“The equity movement has matured,” said McAfee, “The next phase of its maturation is for investors and leaders of the equity movement to be able to sit together and align the capital around the transformative results they want to achieve.” McAfee also said that PolicyLink views conducting this type of analysis as key movement infrastructure, along with convening investors and movement leaders, something he foresees continuing to do annually.
To overcome the hurdles highlighted in the current analysis, LaTosha Brown of Black Voters Matter said, “Philanthropy's accountability has to go beyond that we fund good organizations to do good work, and instead to philanthropy actually seeing itself as a part of the ecosystem…there is a vested interest for all of us to eliminate structural racism and create a nation that is more inclusive and equitable.”
The Bridgespan Group (www.bridgespan.org) is a global nonprofit that collaborates with social change organizations, philanthropists, and impact investors to make the world more equitable and just. Bridgespan’s services include strategy consulting and advising, sourcing and diligence and leadership team support. We take what we learn from this work and build on it with original research, identifying best practices and innovative ideas to share with the social sector. We work from locations in Boston, Johannesburg, Mumbai, New York, and San Francisco.
PolicyLink is a national research and action institute advancing racial and economic equity by Lifting Up What Works®. Our mission is to ensure all people in America—particularly those who face the burdens of structural racism—can participate in a just society, live in a healthy community of opportunity, and prosper in an equitable economy. Our North Star is Equity—the just and fair inclusion into a society in which all of us can participate, prosper, and reach our full potential.