Practical Steps to More Equitable and Inclusive Corporate Grantmaking
Written By: Brady Press
For years, systemic fundraising barriers for Black, Indigenous and people of color (BIPOC) nonprofit leaders and insufficient philanthropic funding towards racial equity—less than 1% of overall US foundation funding—has been evident, but change from the philanthropic community has been limited, and primarily driven by private foundations.[i] However, as the racial justice movement gained momentum last year, so did corporate attention to this issue, with companies providing 79% of all trackable funding pledged or awarded for racial equity in the US in 2020, up from just 6% from 2011-2019.[ii]
With an increasing corporate focus on diversity, equity and inclusion (DEI), we are seeing more and more companies begin to look beyond these initial donations and recognize the need to apply a racial equity lens to all their corporate giving. As a corporate citizenship practitioner, how can you extend this commitment to your company’s grantmaking efforts? See below for some implementable actions to consider at each step of the grantmaking process—from identifying and selecting new grantees to funding their work.
What to Fund – Identifying Potential Grantees
- Give to BIPOC-led organizations. BIPOC-led organizations, particularly Black-led organizations, face well-documented disparities in funding. For example, when looking at its own applicant pool, Echoing Green—an early-stage funder—saw that the revenues of Black-led organizations were on average 24% smaller than those of white-led organizations, and 76% smaller in terms of unrestricted net assets.[iii] Other communities of color have reported similar disparities. With 90% of nonprofit CEO and board seats filled by white people, nonprofit leadership itself needs to be more diverse. But as funders, companies must recognize the problem is systemic and be intentional about funding leaders and communities with the lived experience of racial oppression, as to ensure funding does not further compound inequities.[iv]
- Open the grant process and broaden networks. Many companies do not accept unsolicited proposals, which limits funding to organizations within a grantmaker’s network. To broaden and diversify your applicant pool: reach out directly to BIPOC-led organizations; consider asking current grantees about their networks (if your grantees are diverse); and join identity-based philanthropy affinity groups. Also consider engaging Employee Resource Groups (ERGs) in identifying and selecting new grantees, as 3M and Nike have done:
- 3M Foundation worked with its African American Network and a diverse set of additional community-minded employees to identify and support grantees through its Social Justice Fund.
- Through its Until We All Win Community Investment Program, Nike has worked with members of each of its eight Employee Networks since 2019 to collectively award $4 million per year to organizations leveling the playing field for underrepresented communities, including organizations serving people with disabilities, BIPOC communities, LGBTQIA+, Veterans and women and girls.
- Fund work explicitly described as racial justice work. Racial justice work aims to build the power of marginalized communities and transform systems—key steps to achieving racial equity. It may help to partner with donor intermediaries with a history of funding racial justice work at the grassroots level, such as the Black-Led Movement Fund, AAPI Civic Engagement Fund or Groundswell Fund, which supports reproductive and social justice for Black, Indigenous and Transgender women.
- Boston Scientific used the intermediary approach by pledging to support The New Commonwealth Racial Equity and Social Justice Fund held at The Boston Foundation, formed by Massachusetts-based Black and Brown executives.
- Give both locally and nationally (in the various countries in which your company operates). While funding organizations doing racial justice work at the national level is impactful, make a point to also give to smaller, grassroots organizations working in your local communities. These organizations are often best equipped to handle issues specific to your community, and receive less funding than larger, well-known organizations.
How to Engage – Working with Potential Grantees
- Increase accessibility by simplifying the grant application. Lengthy grant applications or applications that require specific data may unintentionally hinder smaller organizations from applying due to lack of time and resources; this disproportionately affects BIPOC-led organizations, as they tend to be smaller. But be careful not to assume what simplifying means – something as minor as enforcing a strict word/character limit to keep applications short could ultimately be more time consuming for grant seekers if they need to extensively adapt existing program language to fit. Talk with your grantees, current and prospective, to gain a true understanding of what a simpler grant application means to them.
- Remove common barriers for smaller organizations in the financial analysis process. BIPOC-led organizations tend to have smaller budgets and fewer reserves than white-led organizations. In a survey of Black-led social change organizations, 60% had budgets of $500K or less and just 23% had reserves of 3-months or more.[v] There are many examples of how to make financial analysis more inclusive, including (but not limited to): asking organizations how they would manage an unexpected cost rather than only looking at reserves; not relying on “seals of approval,” i.e., funding from other companies; and not making funding contingent on securing a match.
How to Fund – Funding New Grantees
- Give multi-year, unrestricted/general operating support. Many companies loosened funding restrictions in light of COVID-19 – a trend that should continue as companies seek to be more equitable and inclusive in their grantmaking. Rather than focusing on short-term social change, funders should consider the role they can play in strengthening an organization’s overall capacity and financials, thereby increasing their sustainability and resilience. Unrestricted funds are especially important for grassroots and advocacy organizations, as they allow for flexibility when responding to changing needs.
As you begin reassessing your grantmaking processes, remember that equitable grantmaking starts internally. Are you addressing how your own implicit biases may have impacted your current grant programs? Are diverse voices informing your grantmaking efforts? Change starts internally and will not happen overnight; the goal is to recognize the issues impeding diverse, equitable and inclusive giving, and work to address them within your programming.
We’d Love to Hear from You
Please reach out to us! We’d love to hear steps you’re taking to make your grantmaking more equitable and inclusive, or challenges you are facing. Send any questions, comments and/or examples to [email protected] or message me on LinkedIn.
[i] “What does Candid’s grants data say about funding for racial equity in the United States?,” Candid, 2020
[ii] “What does Candid’s grants data say about funding for racial equity in the United States?,” Candid, 2020
[iii] “Racial Equity in Philanthropy: Disparities in Funding for Leaders of Color Leave Impact on the Table,” by Cheryl Dorsey, Jeff Bradach, and Peter Kim, Echoing Green and The Bridgespan Group, 2020
[iv] “Leading with Intent: 2017 National Index of Nonprofit Board Practices,” BoardSource, 2017
[v] “The Case for Funding Black-led Social Change. Redlining By Another Name: What the Data Says to Move Rhetoric to Action,” Emergent Pathways, LLC prepared for ABFE: A Philanthropic Partnership for Black Communities, December 2019
Brady is an Associate Director in Changing Our World’s Corporate Social Engagement practice, where she works hand in hand with companies to design and implement strategic corporate social responsibility (CSR) programs. Brady brings experience in communications, corporate-nonprofit partnerships, employee engagement, volunteerism and corporate giving programs. She is passionate about helping companies lead with authenticity and achieve meaningful social impact.