Are corporations making good on their racial equity pledges?
Based on our analysis, the answer is, it’s (currently) impossible to know—but it’s important to get right. Last summer, the murder of George Floyd and the global racial justice movement brought issues of racial inequity and injustice to the forefront. Candid has been tracking the past decade’s worth of racial equity pledges and funding, but this recent philanthropy response was staggering. As of July 2020, we’d identified racial equity grants and pledges worth $4.2 billion; since then, the total has more than tripled. Yet a closer look at this funding shows that pledges—particularly those from corporate funders—account for nearly three-quarters of the dollars we’ve tracked. At Candid, we are often asked about these figures and whether corporations are truly making good on their promise to do good. In this blog, we identify three current challenges we’ve encountered in tracking corporate pledges and offer a call to action for future corporate giving.
What are corporate pledges?
Pledges, which are distinct from grants, are commitments to dedicate a particular amount of funding over time to yet unspecified recipients. In other words, while grants represent guaranteed funding, pledges are promises about future spending. Since 2020, Candid has collected 121 pledges to fund racial equity from 96 different corporate funders totaling $7.8 billion dollars. This data is available on our racial equity map.
Corporate funders are for-profit organizations funding philanthropic work. This includes two different avenues for giving: funding via company-sponsored foundations as well as direct giving by corporations. (Learn more about this distinction here.)
Corporate pledges for racial equity represent a range of initiatives. These initiatives may be focused on company operations (such as hiring practices, implicit bias trainings, supply chain diversification) or they may be more externally-focused philanthropic commitments, most commonly in the form of donations to nonprofit organizations. Sometimes the language used in a corporation’s pledge announcement doesn’t include specifics but instead speaks to a general goal (such as “increasing racial equity” or “providing equitable access to tools”).
While these initiatives may be important and impactful—indeed, many advocates have called for addressing inequitable company operations—lumping them together makes it challenging to estimate what proportion of racial equity funding is actually making its way into the social sector.
A case study approach to the largest corporate pledges
To more closely examine the details, challenges, and opportunities associated with these commitments, we focused on the top 10 largest corporate pledges in Candid’s database. These pledges, which were all announced in 2020, range in overall size from $300 million to $30 billion. Here is a brief snapshot:
Three challenges in tracking progress on corporate pledges
It’s frequently challenging, and often impossible, to track progress on corporate pledges based on publicly available information. A close examination of the 10 largest corporate pledges highlights these common roadblocks. Here are the top three challenges we found:
Challenge #1: Many corporations don’t share specific details about how their pledges will be distributed. This challenge can arise as soon as a corporation makes their pledge announcement. Some funders “itemize” their pledges by specifying what amounts they’ll give for each initiative, but corporate funders rarely provide this level of detail. This makes it particularly difficult to track companies’ progress on initiatives, including philanthropic commitments. It may also prevent us from determining whether a pledge includes a philanthropic commitment or not.
An example of an itemized pledge is from PayPal. Last June, the company announced $530 million in pledges, distinguishing between the $15 million for strengthening internal diversity and inclusion programs and the $515 million (since increased to $520 million) for philanthropic giving. Additionally, PayPal announced that their philanthropic commitment included “short-term, medium-term, and long-term investments in the community” and listed the amount dedicated to each category.
A pledge from Bristol Myers Squibb and the Bristol Myers Squibb Foundation offers somewhat less disaggregation. The company announced a $300 million combined investment designed “to address health disparities, increase clinical trial diversity and for Bristol Myers Squibb, to increase the company’s spend with diverse suppliers and continue to increase Black/African American and Hispanic/Latino representation at all levels of the company.” The text suggests a range of activities, but it’s unclear how much funding is dedicated to each activity.
Challenge #2: Corporations aren’t required to report on whether they fulfill their pledges or not. Corporate funders have varied reporting requirements, which further restricts the ability to timely and accurately track progress. On one hand, the IRS requires company-sponsored foundations to share details of their grantmaking via their Form 990-PF filing. On the other hand, with direct corporate giving, companies have no legal requirements to publicly share details about their direct giving—now, later, or at all.
We are not saying that funders aren’t fulfilling their commitments. We are saying that it’s almost impossible to know—unless corporations choose to disclose it. After publicly announcing their pledges, many corporations don’t say much, or anything at all, about how they’re following through on their commitments because they’re not required to. But not sharing this valuable information weakens philanthropy’s collective efforts.
Challenge #3: Even when funders are sharing progress updates on pledges, they often miss key grantmaking details. To meaningfully track pledges, it’s crucial to have grants-level information about the recipient organization, the amount awarded, and a brief description about the type of work that’s being supported (including general operating support). These details are necessary to better understand the resources going to different communities, identify the relative amounts of support that organizations are receiving for their work, and compare funding for different types of racial equity initiatives—from access to financial services to criminal justice reform.
However, because funders have varied approaches to transparency, these details aren’t always there. Some corporations provide updates by maintaining a web page that simply mentions the organizations the funder is working with (e.g., Mastercard) or issuing periodic press releases announcing aggregate funding to groups of nonprofits (e.g., the NBA Foundation). Such updates indicate that funders are continuing to engage with their commitments; however, since neither approach includes information about the exact amounts awarded to each organization, we ultimately know very little about what the money is being used for.
There are instances of corporate funders providing disaggregated information on their donations. Salesforce shared this level of detail when they announced $20 million in grants to support equitable access to education. Microsoft has also made public some of the exact amounts they’ve donated to specific organizations. And in some cases, grant recipients are sharing these details. For instance, the nonprofit Local Initiatives Support Corporation announced $62.5 million in investments from PayPal and HubSpot to its Black Economic Development Fund. But this level of detail is not easy to come by; when it is available, it’s often dispersed across the internet—buried on funder websites, local news stories, or press releases.
A call to action: Funders, share your grants data (early, often, and disaggregated)
There’s been much coverage and discussion about the billions of dollars that corporate funders have committed for racial equity. Some circles have praised these pledges while others have viewed these corporate announcements more critically. Given the lack of reporting, it’s hard to come by overwhelming evidence supporting either view. Without regular, standardized reporting, it’s impossible to definitively assess whether funders—corporate or otherwise—are “making good” on pledges.
It doesn’t have to be this way. Funders can address each of these challenges through transparency, increased communication, and accountability.
We call on funders to match their public commitments with public follow-through and then share where their money is going, when, to whom, and in what amounts. When funders share grants directly with Candid, we’ll capture them in our public-facing racial equity map. Funders can learn how to contribute data by contacting us at [email protected]. The more we know about how these pledges are being actualized, the more effective we can be in collectively working toward racial equity.
 Candid collects data on pledges from the news and funders websites. Separately, we collect data on grants authorized or paid out in fulfillment of pledges when that information becomes available.
 Our approach to what counts as a “philanthropic commitment” is fairly broad. It goes beyond grantmaking to nonprofits to include external investments in Black-owned businesses and other social enterprises that serve the goals of racial equity.
 At Candid, we’re particularly interested in tracking philanthropic commitments. To the extent possible, Candid’s database only captures the portion of an overall pledge that reflects the organization’s philanthropic commitment.
 In this case, Bristol-Myers Squibb noted that some of their pledge will be delivered through the foundation and part will be given directly by the company. Among the ten pledges we examined, the vast majority reflect direct giving by corporations. However, it’s not always clear from pledge announcements which type of corporate funding vehicle is being used, or to what extent.
 There is often a years-long time lag between the time a grant is made and when that filing is made public. Even when grants in fulfillment of pledges are reported on IRS filings, the common lack of grant descriptions mean that