In response to the converging social and public health pandemics last year, people organized, voted, donated, and resisted, all united by the desire to transform reality into a more equitable future. This showed up in philanthropic giving through an unprecedented surge of commitments to funding for racial equity.
But it will take more work to move from intention to impact.
In order to transform the lives of the more than 100 million people in America living in or near poverty—or 1 in 3 people, including nearly half of the people of color in the nation—we need fundamental shifts in our culture, policies, programs, and institutions to finally serve everyone. To achieve those systemic changes without racial disparities will require a well-capitalized movement for equity.
According to an analysis by the Philanthropic Initiative for Racial Equity, as of the summer of 2021, Candid had identified more than $8.8 billion in pledges for racial equity work in 2020, of which only about $3.4 billion in grants had actually been awarded. As of time of publication, this represented just 3.3 percent of the total of foundation and corporate giving for the year, based on Giving USA projections. Even if all the money pledged were deployed, equity movement leaders worry that it would be insufficient to address the historical undercapitalization. Just as important, funding for racial equity also needs to be sustained.
Understanding how funds are aggregated and deployed is a critical piece of infrastructure for a movement that is hoping to win. Imagine if we could finally get funding to align with equity leaders to work in transformative solidarity—the potential is an ecosystem effectively designed to build an equitable nation for all.
One of the concerns raised by equity movement leaders in the research that PolicyLink and The Bridgespan Group recently published, Moving from Intention to Impact: Funding Racial Equity to Win, is that funding may not be going to the full range of work that is needed to support transformative change. Fortunately, giving through regrantors, who are in community with organizations doing that important work on the ground addressing root causes, can help funders interested in achieving lasting impact.
The Case for Regrantors
“The uncomfortable truth is that philanthropy itself is often one of the biggest obstacles to transformative work,” says Farhad Ebrahimi, founder and president of the Chorus Foundation, an equity-driven funder active in funding social movements. “It is possible to fund the right things in the wrong way.”
However, given the urgency of the inequity that we face and the reality that racial equity journeys are continuously ongoing, it is impractical for funders to delay funding so they can learn first. Instead, they should invest while learning.
Regrantors often have the relationships and capabilities to deploy significant philanthropic capital in a way that models much of what is needed to make lasting progress—a long-term lens and trusting relationships with leaders of color and grassroots organizations. Proximate leaders and peer funders can both support funders and keep them accountable as they pursue this work.
Contrary to popular misperceptions, there is also no shortage of opportunities: in a 2021 Bridgespan survey, funds focused on racial equity reported that they could absorb up to $3 billion annually without any increase in operating capacity. This finding reinforces the messages in a recent open letter to philanthropy from the Groundswell Fund, co-signed by more than 400 racial equity funders, calling for “a significant transfer of resources into the control of institutions where people of color, who are primarily accountable to their communities, have the ultimate decision-making power over where dollars go.” We agree and urge funders to capitalize regrantors and intermediaries who are led by people of color, focused on racial equity, and accountable to communities of color.
Funders should also think about what their learning while giving might look like: is this learning through the observation of the choices that regrantors make versus regular conversations with staff and/or leadership? And be mindful that funder’s wishes for learning may not coincide with every regrantor’s model.
Equity grantmaking intermediaries come in various formats, including:
- People of color-led public foundations like the Groundswell Fund and the others behind the open letter. By their own description, these funders are rarely endowed, raising what they give out each year under the guidance of staff and boards composed largely of people of color who came out of grassroots movements and the communities they are trying to support. The strategies of these foundations are co-created and approved by grassroots leaders who have decision-making power within these grantmaking institutions. Many grassroots organizations receive their first grants and most consistent funding from these funders. (Look at Groundswell’s list of people of color-led, movement-accountable public foundations that fit that bill.) Related to this model are community foundations, place-based funders like those that the Coastal Community Foundation, which often play a critical role as community conveners bringing together community members, advocates, and leaders to address the major structural challenges in their regions.
- Equity-focused pooled funds and donor collaboratives, like The Democracy Frontlines Fund (DFF) or the California Black Freedom Fund, allow funders to pool their money to amplify impact. DFF, launched by the Libra Foundation in the wake of George Floyd’s murder, is guided by a brain trust of accountable movement advisors. It is deploying $36 million in unrestricted dollars to 10 Black-led racial justice groups, some of which are regrantors themselves. The California Black Freedom Fund, the first state-based fund of its kind, is a $100 million initiative that will provide resources over the next five years to Black-led power-building organizations to eradicate systemic and institutional racism in the state.
- Grassroots networks and coalitions sometimes take on the role of regrantors when they have the capacity to receive dollars and redistribute them. These entities are doing the on-the-ground work in addition to regranting dollars to where it is needed across the ecosystem. Black Voters Matter and the Movement for Black Lives, both national racial justice networks, fall into this model. Sometimes grassroots groups come together to distribute resources. In June of 2020, four pillar grassroots organizations—Highlander Research and Education Center, SONG(Southerners on New Ground), Project South, and Alternate ROOTs—launched the Southern Power Fund to meet the moment. Raising $14 million, mostly from institutional funders, each of the four organizations gives no strings attached grants to small, people of color led-organizations often overlooked by funders. The Trans Justice Funding Project, a community-led funding initiative that supports grassroots transgender justice groups, has a rotating panel of transgender and gender non-conforming activists from across the nation who choose the grantees.
There are many practical steps that funders can take that would collectively add up to major shifts in the way the movement for equity receives support. Providing funding to regrantors and learning alongside them is a critical way to get started. And the time is now to fund racial equity to win.