This presentation examines funding biases of nonprofits across race, class, gender and faith. Research shows that while 52.4% of those in poverty in the USA are people of color, only 16.5% of nonprofits are led by people of color, and only 3% of foundation funding goes toward organizations that are led by people of color.
The CMO Survey - Highlights and Insights Report - Spring 2024
Nonprofit Funding Bias And Foundation Diversity
1. Nonprofit Funding Bias and
Diversity in Foundations
Andrew Sears
Executive Director
TechMission
2. Funding Bias: Non-Whites Make Up 52.4%
Of Poverty But Non-White Led Nonprofits
Only Receive 3% of Funding
http://www.slideshare.net/rosettathurman/race-matters-in-nonprofits-promoting-diversity-in-our-profession and
http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf
4. Nonprofit Leadership Does Not
Reflect Racial Community It Serves
Source: http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf
5. Nonprofit Statistics And Race
1.4 million registered nonprofits in USA
◦ 1,169,000 White-led nonprofits
◦ 138,600 Black-led nonprofits
◦ 50,400 Latino-led nonprofits
◦ 12,600 nonprofits led by other races
Source: Number of nonprofits from Independent Sector;
racial breakdown extrapolated based on survey results at:
http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf
6. Most Nonprofits: Have A Different
Class Culture Than Clients
White Black Latino Asian
Upper
Leadership Leadership Leadership Leadership
Middle
Lower Clients
7. Nonprofit Leadership Does Not
Reflect Class Community It Serves
Data shows subjective estimates from the author based on educational levels and class assimilation rates of nonprofit leadership.
94% of leadership have at least a bachelor’s degree with an estimated class assimilation rate of 90-95% based on living location &
culture
8. Funding and Gender
From: http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf
10. Why Does Only 3% Of Foundation
Funding Go To Nonprofits Led By People
Of Color?
11. Bias Source No. 1: Limited Funding of
Faith-Based Nonprofits
Religious Restriction = Racial Bias: How It
Works
◦ About 2/3 of Black-led nonprofits are in churches or
other faith-based organizations
◦ About 2/3 of White-led nonprofits are secular
◦ Not funding faith-based organizations makes White-
led nonprofits twice as likely to get funded
◦ Some believe that the literacy tests for voting in the
1950’s have been replaced with religious tests for
funding today
Statistics are explained in the attached spreadsheet at:
www.urbanministry.org/fundingbias
12. Bias Source No. 2: Cultural Bias
Race
◦ 97% of foundation funding goes toward White-
led nonprofits
Class
◦ Estimated 95% of nonprofit leadership is
culturally middle class
Gender
◦ While 58% of nonprofit executives are women,
the median nonprofit income led by a man has
twice the income of a nonprofit led by a woman
Sources: http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf &
http://greenlining.org/publications/pdf/339
The class statistic is explained on a previous slide
13. Learning From Research: Cultural Bias
On SAT Test
Research has shown the SAT test
statistically to have a bias:
◦ If you are White or Asian on average you will
have a 150-200 point increase
◦ On average, you score 30 points higher per
$10,000 of family income
Why?
◦ Test follows White, middle class values
◦ Legacy of past discrimination
Source: http://www.maec.org/natstats.html &
http://www.educationanddemocracy.org/testing_facts.pdf
14. Cultural Bias In Funding: Different
Value Systems
Dominant Culture Non-Dominant Culture
(middle & upper class) (lower class)
Values Big Organizations Cost effectiveness
Almost no weight given to Is leadership close to the
the leadership being close community?
to the community ◦ Race of leadership
(staff/board)
◦ Class background of
leadership
◦ Neighborhood they live in
Analytical & Quantitative Holistic
◦ Nonprofit “SAT scores” ◦ Has a life been changed
Purely Objective Criteria Subjective
Secular Focused Faith-Based & Secular
15. Common Class Value
Tensions In Organizations
Lower Class Value Middle/Upper Class Value
Low Cost High Quality
Low Cost Speed
Relational Structured/Orderly
Relational Efficient
Spontaneous Detached/Objective
Subjective Objective
Intense Reserved
Hierarchical Egalitarian Appearance
Trauma Is Common Trauma Is Avoided
Many Small Organizations Big Organizations
Many Volunteers/Time’s Staff Time Is Expensive
Cheap Any Middle/Upper Class
Any Lower Class Culture/ Values
Culture/Values
17. Policy Recommendation No. 1:
Diversity Profiles
“If you can't measure it, you can't manage it.” Peter Drucker
Foundations and the government should require all funding
recipients to complete diversity reporting forms as part of
applications
All funders should publicly list their own diversity reporting
form with the cumulative results of who they have funded
Diversity reports should carry similar weight as financial and
other outcome reports and should be listed in foundations’
annual reports
◦ Diversity profiles and reports become an approximate measure for many
of the subjective elements that are hard to measure in other outcomes
18. Policy Recommendation No. 2:
Change Funding Criteria
Need funding criteria that values diversity
Examples
◦ 20% of Grant Application Weight: Is leadership close to the
community as reflected in their diversity profile and strategy?
Use diversity profile form and grant questions
◦ 20% of Grant Application Weight: Is the organization serving
the highest risk community?
Require detailed criteria to distinguish at-risk vs. high risk, etc.
◦ 10% of Grant Application Weight: How closely is the
organization partnered with major indigenously-led
initiatives?
19. Policy Recommendation No. 3:
Affirmative Action In Funding
If the Government gives preference to
minority owned businesses in contracts,
shouldn’t that be a consideration with
nonprofits?
◦ Nonprofits that closely reflect the demographics of
the communities they are serving should be given
preference
Promote strategies to support small
nonprofits
◦ View explosion in number of nonprofits as comparable to
the increase in small businesses and adopt strategies
similar to those promoting small businesses
20. Policy Recommendation No. 4: Fund Studies
on Macroeconomic Social Entrepreneurship
Social entrepreneurship and traditional nonprofit
outcome measures take a microeconomic
perspective focused on individual organizations
Need new measures of effectiveness that provide
a macro perspective
◦ Need macro-tools just as social entrepreneurship
brought microeconomic business tools to nonprofits
21. Examples of Macroeconomic
Research Questions
Perform a study on people who made it out of poverty
asking “What organizations and programs were most
helpful”?
◦ Hypothesis: You might find that Black, Latino and lower class
culture organizations and especially faith-based organizations
provide 75% of life change while receiving 3% of foundation
funding.
How should we allocate funding to meet the need for after-
school programs when demand is more than twice that of
supply?
◦ Hypothesis: 75% of funding goes to middle-class organizations
that have a high cost per student and only serve 25% of the
population, while lower-class culture serves 75% of the
remaining population at a third of the cost.
22. Policy Recommendation No. 5: Adopt Strategies
To Support Smaller Organizations
Promote strategies to support small nonprofits
◦ View explosion in number of nonprofits as comparable to
the increase in small businesses
◦ Funders should adopt strategies similar to those
promoting small businesses
TechMission Strategy
◦ Online Volunteer Matching: ChristianVolunteering.org
◦ AmeriCorps Members to small organizations:
TechMission Corps
◦ Free Grants, Jobs & Training Directories:
UrbanMinistry.org
23. Policy Recommendation No. 6:
Have Diverse Staffing & Board
Track Diversity Profile of Staff and Board
of foundation
Be intentional about having staff that
work most directly with community reflect
the demographics of the community
24. 3 Keys To Achieving Diversity
1. Diversity Measurements 2. Diversity At Every
& Affirmative Action Level Needed for
At Every Level Leadership Pipeline
3. Recognize That Values & Culture Will Be Set
By Those With Power In The Organization
26. Why TechMission Is Addressing
This Issue?
TechMission primarily supports Black- and Latino-led
nonprofits that are close to the community
We have seen how these nonprofits are experiencing
systemic issues with bias in the funding of nonprofits
In a down economy, we are observing an increasing
bias towards big (i.e. White) organizations
Many of our partner sites are struggling to stay
functional
27. Why TechMission Can Speak to
This Issue?
TechMission’s organizational culture reflects lower class
culture
◦ Nearly all of board and senior staff are Black, Latino and/or
come from a low-income background
◦ ED is White from lower class background
◦ TechMission Corps AmeriCorps Members are 62% Black and
Latino with 50% from low-income backgrounds
TechMission has one of the widest spans of connection with
grassroots organizations (over 4,000 registered nonprofits)
◦ UrbanMinistry.org being the Black/Latino counterpart to Idealist.org
and VolunteerMatch.org
Leadership has extensive experience on writing about and
living out reconciliation across race, class and gender
29. What TechMission Can Uniquely
Do To Address This?
Ability to build a highly scalable
organization that has values and staff that
reflect the low-income communities that
we serve
Provide resources to those communities
Why?
◦ Capacity: Scalable resources from National
Service Movement and Technology
◦ Values: Foundation in Black, Latino and low
income churches