In recent months, many foundations and corporations have committed to advancing racial equity, which included supporting organizations led by or serving people of color. The new administration has also signaled a willingness to support these organizations through its executive order on racial equity.

These commitments could bring much-needed capital to systematically underresourced organizations that are, in many cases, on the front lines of racial equity work. If part of the task of advancing racial equity depends on investing in the work of these organizations, we need better data to measure investments in those organizations. But more fundamentally, we need to be able to identify them.

Funders use three primary frameworks to identify organizations led by or serving people of color. The first framework identifies organizations on the basis of the people who lead and set the strategy, the second builds on the assumption that organizations located in communities of color are serving those communities and focuses on location as a result, and the third identifies organizations based on the orientation of their mission toward positively affecting communities of color or focusing on advancing equity.

No matter how funders identify these organizations, serious data gaps prohibit the field from tracking progress on corporate, philanthropic, and federal investments. These gaps need to be addressed to better support and hold accountable the people making investments and to take steps toward closing the nonprofit racial funding gap.

Read the full article about racial funding gaps in nonprofits by Shena Ashley and Claire Boyd at Urban Institute.