Investing in Black leaders and organizations is a powerful opportunity for impact. Over and over again, such leaders have been able to achieve significant results with a fraction of the resources of their white counterparts. Case in point: The 1954 Project is radically redesigning how philanthropy connects with Black leaders in education, not only by upending chronic underinvestment, but also by reinventing how investments are made.

This case study provides an overview of the ways The 1954 Project has invested in Black leaders as it explores how philanthropy can evolve to overcome race-based barriers to capital. The 1954 Project is early on its path, yet other funders can learn from its work to better understand what the work of equitable philanthropy entails.

The Urgency to Invest in Black Leadership

Despite their impact, Black-led organizations face significant race-based barriers to funding, whether from philanthropy, federal funding, or corporate funding. Research conducted by Echoing Green and The Bridgespan Group found that among organizations of a similar stage and caliber, the average revenues of Black-led organizations were 24 percent smaller than their white-led counterparts, and the unrestricted assets of Black-led organizations were 76 percent smaller. Furthermore, organizations led by Black women received less money than those run by white women and Black men—underscoring the intersecting barriers along lines of race and gender.

Among organizations in Echoing Green’s Black Male Achievement Fellowship, which focuses on improving the life outcomes of Black men and boys in the United States, the revenues of the Black-led organizations were 45 percent smaller than those of the white-led organizations, and the unrestricted net assets of the Black-led organizations were a whopping 91 percent smaller than the white-led organizations—despite focusing on the same work. This pattern extends to the largest organizations working on racial equity—more than a third of the top 20 racial equity grant recipients are organizations that were launched and driven by white business leaders.

While some donors stepped up their funding to Black-led organizations in recent years, these “crisis donations” have not been enough to address the compounding disparity of historical underinvestment. Black-led organizations not only are disproportionally underfunded, but the funding they do secure is often shorter-term and less flexible. Endowments and other long-term capital commitments to assets are a common way of making large gifts to institutional nonprofits. As of 2018, endowments to high-profile Black-led social change organizations such as the NAACP, the Equal Justice Initiative, and Community Change amounted to zero.

There are deeply harmful consequences of inadequate funding for Black leaders and organizations. In general, these organizations are forced to dedicate more of their time to fundraising, rather than to directly advancing their strategies. Understaffing can contribute to burnout. Lack of unrestricted funding and lack of sufficient general operating support starve the core infrastructure and functions of an organization (HR, finance, executive leadership, etc.). In addition, inadequate funding makes it much harder for leaders to take risks, “fail” productively, and learn, which can stall innovation.

Read the full article about equitable philanthropy from the Bridgespan Group at the National Center for Family Philanthropy.