What does racial equity look like in lean foundations?

Advancing racial equity has become a critical imperative for philanthropies aiming to make a meaningful impact. As part of that shift, many funders are looking to ensure their staff, leadership, and board reflect the racial and ethnic diversity of their communities. For foundations with few or no staff, ensuring equitable representation and implementing racial equity practices can be both a complex and critical endeavor. Exponent Philanthropy’s 2024 report, Racial Equity in Lean Foundations, offers a snapshot of where nearly 300 of these foundations are today and how they can improve. 

Two-thirds of lean foundations have all-white boards 

One of the key findings is the striking lack of diversity within the leadership and staff of lean foundations: 89% of board members at these foundations identify as white, far more than the 59% of the U.S. population who identify as white. By contrast, 41% of the population identify as non-white, compared with just 9% of board members—with 4% identifying as Black or African American, 2% as Asian or Pacific Islander, 2% as Latinx, and 1% as multiracial. This disparity is even more pronounced in leadership roles, where only 10% of foundations have a CEO or top administrator who identifies as BIPOC (Black, Indigenous, and people of color). 

Moreover, 68% of lean foundation boards are 100% white. However, there is a silver lining: The percentage of boards with two or more BIPOC members increased from 13% in 2018 to 20% in 2022. This suggests a growing recognition of the importance of diversity. Over five years of data, the demographics of a lean foundation’s board have been the most reliable indicator of how foundations see racial equity relating to their mission. Foundations with larger boards tend to be more diverse, and those with two or more BIPOC board members rated racial equity as significantly more relevant to their foundation’s mission than foundations with one or zero BIPOC board members. 

More diverse lean foundations focus on community-centric racial equity practices 

Lean foundations are implementing a variety of practices to advance racial equity, but the extent and nature of these practices vary widely. There are two main types of racial equity practices: institutional practices and community-centric practices. 

Institutional practices 

These practices focus on the internal workings of the foundation, such as implementing policies or training programs that promote racial equity. For example, 24% of the foundations surveyed have committed to addressing or eliminating inequities within their organizations, and 28% required staff to complete racial equity training. 

Interestingly, the report finds that foundations with less diverse boards and staff are often more proactive in adopting these institutional practices. This may reflect an effort to compensate for the lack of internal diversity by strengthening their commitment to equity through formal policies and training. 

Community-centric practices 

By contrast, community-centric practices are outward-facing, with a focus on how foundations engage with grantees and the communities they serve. The report highlights that foundations with more diverse leadership are more likely to adopt practices that directly support racial equity in the community by emphasizing authentic relationships with community members and proximity to the inequities they face and by listening to community stakeholders. For instance, these foundations are more likely to disaggregate data by race and ethnicity and to purchase goods and services from minority-owned businesses. 

While board diversity plays a significant role in driving these community-centric practices, the specific practices implemented differ somewhat by type of foundation. Independent foundations are more likely to incorporate community input into their data collection and planning efforts, suggesting a closer alignment with the communities’ needs and priorities. 

Lean foundations can support nonprofits’ racial equity efforts

What more can lean foundations do to advance racial equity in philanthropy? They could support nonprofits’ racial equity efforts more directly. Despite a growing awareness of the need, many nonprofits say their funders don’t prioritize racial equity efforts in their grantmaking. Nonprofits called specifically for support for equity training and dedicated funding for equity initiatives and capacity building.  

According to the report, nonprofits view advocacy work, such as meeting with policy makers or conducting research on racial equity issues as essential for achieving systemic change. Yet only 22% of lean foundations surveyed engage in advocacy. Lean foundations may be missing an opportunity to help address the root causes of racial inequities. 

Significant challenges remain 

The legal landscape surrounding racial equity has become increasingly complex, particularly in light of recent rulings on affirmative action. Many foundations are responding cautiously, seeking legal counsel to navigate these challenges while remaining committed to their equity goals. The report emphasizes the importance of finding innovative ways to continue supporting racial equity initiatives. 

While there has been progress among lean foundations, particularly in increasing board diversity, significant challenges remain. By adopting more inclusive practices, both internally and in their community engagement, lean foundations can play a pivotal role in advancing racial equity.  

Learn more about Exponent Philanthropy’s survey findings on how lean foundations are working to advance racial equity by watching the August 28 webinar Exploring racial equity in lean foundations.

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