As a Black foundation leader, shifting resources and power to organizations of color is not just personal: it’s strategic. For decades, these grassroots organizations have been sustaining democracy, advancing racial equity through advocacy and organizing. Despite their incredible accomplishments in every corner of the country, they remain grossly underfunded.

The perennial scramble to secure funding — not just for new programs and campaigns, but sometimes to simply keep the lights on — is a drain on their time, resources, and energy. This is a structural problem that philanthropy cannot solve through traditional grant cycles. This moment calls for a transformative approach.

What if we moved past incremental grantmaking or annual gift-giving and committed to a qualitative shift? What if we built or collaborated on endowments for advocacy organizations?

Such a move is a game-changing opportunity for our fellow foundations and donors seeking to have lasting impact. At Schott, we’ve been not just thinking about how philanthropy can utilize investment in endowments to advance racial equity and justice — we’re acting. As such, we launched our own collaborative endowment fund for three national racial justice alliances: the Racial Justice in Education Endowment (RJEE) Collaborative Fund. Here are some of the lessons we’ve learned so far and what we’re hearing from colleagues in the field.

Endowments are part of a philanthropic racial equity strategy.

CEP’s new research reveals that foundations and donors have contributed to endowments for museums, universities and hospitals at a much higher rate than to grassroots or advocacy organizations. Today, there are growing calls for the use of endowments as a tool to advance racial equity. But we have a long way to go: according to a study by Bridgespan, endowments for nonprofit organizations led by people of color are nearly four times smaller than those of white-led organizations, and their average percentage of revenue is less than half. Therefore, the singular act of endowing a BIPOC-led organization promotes racial equity by addressing this disparity.

Endowments are the next phase of trust-based philanthropy.

The phrase “progress occurs at the speed of trust” holds true in philanthropic endeavors. Philanthropy and wealth management professionals live in a universe where we understand assets and investment, yet getting the social impact and return from our investments requires us to move towards a more trust-based model of philanthropy.

Endowments create diversity in portfolios.

Since endowments are a familiar concept to wealth advisors and philanthropy executives, we can apply the same standards to our philanthropic portfolio that we apply to our investment portfolio. That is, establishing a balanced portfolio of asset classes to ensure stability and higher returns.

Read the full article about building assets for racial equity by John Jackson at The Center for Effective Philanthropy.