Giving Compass' Take:

• The authors discuss how big bets for nonprofits that serve people of color can help make philanthropic funding practices more equitable. 

• How can you support equity in funding practices in your community? 

• Read about the anatomy of big bets in philanthropy. 

The concept of “big bets” has been on the minds of foundations and philanthropists over the past few years. These large investments may be deemed risky, but, as gambling goes, the bigger the risk, the higher the reward.

Equity, too, has been earning more attention from philanthropy recently, even though the majority of funding still goes to white-led organizations. Only about 10 percent of philanthropic dollars go to organizations that are led by and serve communities of color, and it’s been that way for the past two decades, according to reports from Race Forward and the Greenlining Institute. The grants that do go to nonprofits by and for communities of color—which are usually smaller, grassroots organizations—tend to be more restricted and time-bound to just one or two years.

As we grapple with issues of race, equity, diversity, and inclusion, we must acknowledge that philanthropic funding practices are traditionally inequitable, often perpetuating the very injustices we aim to redress. But, with targeted investments based on intentional, equitable, and trust-based partnerships, larger grants have the potential to serve a pivotal role in addressing many of the challenges facing marginalized communities.

In 2014, the Bill & Melinda Gates Foundation decided to invest in a startup organization, Rainier Valley Corps (RVC), which has the explicit mission of being led by and serving communities of color while creating a pipeline for leaders of color.

The partnership between RVC and the Gates Foundation is an ongoing case study of what can happen when philanthropy decides to invest in equity by taking a chance on organizations led by the people who are most affected by injustice. Here are our recommendations to foundations and nonprofits ready to take on this opportunity:

  1. Focus on relationships.
  2. Constantly communicate.
  3. Be flexible on timelines and milestones.
  4. Take risks, accept failure.
  5. Capture lessons learned.

As our communities face unprecedented challenges in a troubling social and political landscape, the ways that foundations and nonprofits partner have to evolve. If we are to effectively address systemic social issues, we must create equitable partnerships with the communities that have firsthand experience with injustice, and thus have the most expertise on how to address it.

Read the full article about equitable big bets by David Bley & Vu Le  at Stanford Social Innovation Review