In the broader nonprofit sector, a capital chasm — sometimes called the “missing middle” — exists between early-stage organizations and those ready to scale their proven models. That chasm is felt acutely by Black-led organizations. Despite making up around 10% of nonprofit leadership in the U.S., Black and Latine nonprofit leaders only receive 4% of philanthropic funding. Additional data show that early-stage Black-led nonprofits have 24% smaller overall revenues when compared to white-led nonprofits with similar missions.  

Misconceptions about risk, limited access to traditional funder networks, structural racism, implicit bias, and a lack of trust across identities are some of the reasons why this capital gap exists. But, three organizations are working to remedy the problem. 

In May, Ballmer Group, Echoing Green, and New Profit announced $40 million in seed funding that will support a five-year initiative to build leadership and sustainability of Black-led organizations focused on economic mobility. More than 100 Black-led organizations will receive both capital and operational support to help spur innovative solutions and provide Black leaders with the tools that they need to scale and achieve their missions over the long term.  

In this Q&A, the three organizations share more about the initiative and provide guidance for donors who are interested in joining this effort.

Q. How will this collaborative effort shift the narrative on funding Black-led nonprofits?  

This approach recognizes that Black leadership is essential for building an economy that works for all. In general, diverse leadership teams achieve better outcomes, and those with lived experience with the communities they serve can create more impactful and sustainable solutions. 

The support provided by the Ballmer Group allows Echoing Green and New Profit to help advance the impact of the visionary Black leaders joining with their communities to build new systems of opportunity in America. By supporting these leaders and lifting their innovative solutions and incredible impact, we can shift the narrative and start to tell a whole new story. 

Q. Echoing Green and New Profit will select and support nonprofits in the early-to-mid growth phases. What issues are these organizations focused on? 

These organizations are focused on improving economic mobility. They are reshaping opportunity and reducing systemic inequities through innovations and impact models. They are led by proximate social entrepreneurs guided by the assets, expertise, and ideas of the communities they serve. These leaders are focused on several issue areas, including pathways to income generation, the social drivers of employment outcomes such as access to affordable childcare, and the creation of financial health and wealth. Creating an economy where everyone thrives requires thinking more expansively than simply getting a good job. 

New Profit and Echoing Green look for social entrepreneurs with a deep commitment to and experience with the communities they serve. This initiative’s work is rooted in understanding the historical and current systemic barriers to opportunity. And New Profit looks for leaders with systems mindsets; it’s looking not only to create direct impact but also to shift the systems that are creating that imbalance in the first place. For Echoing Green, the systems change leaders selected for its fellowships stay connected and committed to creating opportunity in their communities long after launching their enterprises.

Q. What can other donors do to piggyback on this collaboration between New Profit, Echoing Green, and Ballmer Group? 

The intermediary model allows philanthropists to pool and deploy large amounts of capital without needing to build the operational infrastructure, pattern recognition, and deep networks necessary to surface and select high-potential, high-impact organizations — all of which Echoing Green and New Profit have developed, tested, and refined over several decades. 

Echoing Green and New Profit help develop the capacity of leaders and organizations, building solid foundations for these nonprofits to scale and expand their impact. Echoing Green provides early investment and follow-on funding with ongoing assistance in fundraising, strategic planning, board development, and operational practices. New Profit offers single- and multi-year unrestricted grants that come with peer learning communities and deep advisory support to catalyze innovation and build the leadership capacity of entrepreneurs who aspire to national impact.  

Q. How can individual donors better address funding gaps faced by Black-led organizations in the long term? 

The most straightforward answer is to start or increase the amount of funding for Black-led organizations. 

But it goes beyond the dollar amount—it’s also the type. Individual donors should consider the requirements they put on their dollars and whether those improve outcomes or restrict impact. On average, early-stage Black-led nonprofits have 76% smaller unrestricted net assets than similar, white-led nonprofits, an indicator of continued bias and lack of trust in Black leaders.  

Individual donors can consider providing unrestricted funding that allows organizations to allocate resources where they are most needed. This type of funding enables Black-led organizations to cover operational costs, invest in infrastructure, and build organizational capacity.  

Donors interested in joining this initiative can contact Lizzie Perlmutter at elizabeth_perlmutter@newprofit.org to learn more.