Research suggests that U.S. foundations trust Black-led organizations enough to give them money, but not enough to give them control. A recent analysis by Bridgespan and Echoing Green looked at a set of comparable grant-funded organizations and found that the unrestricted net assets of the Black-led organizations were 76 percent lower than the white-led organizations. As the authors note, “The stark disparity in unrestricted assets is particularly startling as such funding often represents a proxy for trust.”
This failure of trust sits at the intersection of two live debates in philanthropy. c (GOS).
Foundation leaders can choose to do both. Long-term GOS could empower organizations in communities of color and better position them to address racial equity. If we are not careful, however, these two important efforts could work at cross purposes.
The challenge is a subtle one and has to do with how grantmaking is tracked. The field’s understanding of the distribution of philanthropic dollars by beneficiary group — including race — is limited by the available data. To address this, some have called for foundations to explicitly call out which population group they hope to benefit with each grant. Unfortunately, this push for clarity could create an accidental disincentive for providing GOS grants. Here’s how.
Foundations might choose to highlight their commitment to racial equity by giving project grants that focus on specific communities, instead of GOS grants to organizations that serve multiple communities. Or, more subtly, funders may change how they document their unrestricted support. If, for example, a funder adds language to a GOS grant agreement letter that doesn’t apply to the nonprofit as a whole, the grant can become, in legal terms, a project grant.
This may seem like a tenuous connection. But new evidence reminds us that subtle forces drive foundation decisions about grant type. A recent report from the Center for Effective Philanthropy (CEP) shows that foundation leaders overwhelmingly recognize the strategic and moral logic for providing more multiyear GOS. And yet, practice appears to lag far behind belief. Why? The report’s authors were unable to find any compelling answers in the data. “Given the lack of a common barrier, or even a strong rationale for not providing multiyear GOS … it is frankly difficult to comprehend the lack of change in practice over time,” they write.
Read the full article about trust, race, and grants data by Jacob Harold at The Center for Effective Philanthropy.