Empowering change: Black-founded nonprofits achieving impact with limited resources

A report from Giving Gap, State of Black Nonprofits Report: 2024: Shining a Light on What Donors and Funders Need to Know, highlights the critical role of Black-founded organizations as service providers, catalysts for positive change, and champions for equity. Combining survey data from leaders of 168 Black-founded nonprofits and Candid’s 990 data, the report delves into the unique strengths of these organizations and their leaders, showcasing their resilience and commitment in the face of funding disparities, limited growth opportunities, and the need for equitable support and investment. 

Established in 2020 by Christina Lewis, Stephanie Ellis-Smith, and David Setiadi, Giving Gap aims to dismantle barriers hindering nonprofit growth, especially for organizations that are Black-founded and serve Black communities. Giving Gap CEO Heather Infantry spoke with Candid insights about the report’s key findings.  

“In our report, we really wanted to distinguish what we think are unique leadership attributes among Black organizations,” she said. “How do they specifically approach the work? What are the factors in their lives that compel and inspire them to engage in communities in the way they do?” 

What are the attributes of Black-founded nonprofits?  

Of the Black-founded, Black-founded and Black-led, Black-founded and Black-serving, or Black-founded, -led, and -serving organizations surveyed, 40.51% are based in the South—where 56% of Black Americans live—though their scope and impact include regional, national, and international causes.  

The surveyed nonprofits are focused primarily on education, arts and culture, and health; 57.5% were founded in the past two decades; and 60% were founded by Black women, who have been trailblazers in philanthropy, centering collectivism to advance social change but also face an absence of trust from funders and board members. 

Why invest in Black-founded nonprofits for community success? 

According to the report, 82% of Black leaders at Black-founded nonprofits were deeply involved in the daily operations of their organizations, and 92% had personal experiences related to their missions. Ninety-one percent said they were motivated by their passion and belief in the mission, with 62% citing lived experience as a factor. Respondents also noted that strong skill sets, spiritual practices, and support networks were crucial to their success as leaders. 

“Investing in Black nonprofit leaders and investing in Black nonprofit organizations is an opportunity to effectively get things done in our communities,” said Infantry. “Those organizations will show up and do that work regardless of whether you are there with them or not. They’ve been doing the work regardless of funders being there. They do not exclusively serve Black communities, and the impact of their work benefits all communities. And there’s so much farther the funder and the nonprofit can go and do together in partnership.”  

Yet while the COVID-19 pandemic and calls for racial justice in 2020 boosted fundraising for many Black-founded nonprofits, 22% reported no increase in funding, and 97% said their organizations needed financial support for general operations. In addition, 62% of leaders said they faced personal financial constraints and sought outside income. 

Infantry noted that while there is focus on what these organizations lack, there should be more focus on why the lack exists in the first place. “Some of my colleagues in this space are focused on building up these organizations’ technical and fundraising capacity, which is great. But I do know there are phenomenal Black organizations that write winning proposals and yet still come up short. They have charismatic leaders and great deliverables, yet funders don’t award them grants,” she said.  

What are the implications of funding gaps? 

According to The Bridgespan Group and Echoing Green, on average, Black-led organizations operate with revenues 24% lower than white-led ones. The median revenue for Black-led nonprofits is $47,400 below that of white-led nonprofits—a $20 million funding gap. 

The Giving Gap found that an additional challenge is philanthropy’s shift toward prioritizing direct services over capacity-building efforts, which has limited Black-founded nonprofits’ ability to tackle systemic issues. These concerns compound existing challenges such as donor apathy and struggles to navigate the funding process. 

 “Even with all that we have begun to reveal about historical disinvestments, studies speak to how philanthropy keeps Black folks from prospering in certain ways. Black leaders are still showing up every day and erecting these nonprofits to address the urgent needs of their communities,” said Infantry. 

How can Black-founded nonprofits best be supported? 

“What I would really love for funders to do is just talk about the good work Black organizations are doing,” said Infantry. “But the focus first is the impact of their leadership. We never think of white leaders getting funding because they’re white, although that’s likely the case. We always think it’s because they’re high-performing, and that’s how we define them: ‘They’re just naturally high performing, they’re more organized, their budgets are bigger,’ that sort of thing. And the only thing we have to say about Black nonprofits is they’re under-resourced.” 

To enhance investment, leaders said a multifaceted approach was needed—including flexible funding, diverse boards among funders, long-term support with networking and professional development, holistic consideration of the philanthropic ecosystem, increased access to unrestricted funding, and acknowledging the impact of race on systemic barriers and rejecting color-blind ideologies. 

Photo credit: Anchiy via Getty Images