Introduction
Black-led nonprofits play a vital role in addressing racial and economic disparities, yet they receive 24% less revenue and 76% fewer unrestricted assets than white-led organizations. Why does this gap exist, and how can Black-led nonprofits work to close it?
Understanding the Disparities
A recent study found that 76.7% of Black-led nonprofits operate on budgets under $500,000. In contrast, white-led organizations often have more significant resources, enabling them to secure larger grants and investments.
Key factors contributing to the funding gap include:
• Limited Access to Institutional Philanthropy – Many Black-led organizations struggle to secure major grants from foundations.
• Lack of Unrestricted Funding – Black-led nonprofits receive fewer general operating funds, making it harder to invest in staff and infrastructure.
• Bias in Grantmaking and Donor Networks – Historically, funding networks have favored white-led organizations with established connections to funders.
How to Close the Gap
To bridge this funding divide, Black-led nonprofits should:
1. Leverage Data-Driven Storytelling – Use impact data to demonstrate community needs and organizational effectiveness.
2. Cultivate Individual Donors – With individuals accounting for 64% of donations, Black nonprofits should focus on donor cultivation and retention.
3. Partner with Black Philanthropy Networks – Organizations such as GivingXchange and ABFE (Association of Black Foundation Executives) can help Black-led nonprofits access funding.
Conclusion
The funding gap is a systemic issue, but Black-led nonprofits can take strategic steps to secure more funding. By focusing on visibility, strategic partnerships, and diversified funding, these organizations can work toward greater financial sustainability.
