The Funding Difference: What We Can Learn From the United States
At Common Call, we understand that Black-led organisations work twice as hard to receive funding. We understand that in the United Kingdom more often than not the funding received is markedly less than their white-led counterparts, but is this truth universal? We take a look at the state of funding for Black-led organisations in the United States and ask whether we can learn from our differences and similarities.
A 2020 study run by Funding Green and the Bridgespan group, looked at 140 non-profit organisations run in the United States and found that white-led organisations had budgets that were 24% larger than those led by Black people. When looking at donations made to be used for any purpose the organisations saw fit, these unrestricted donations were 76% smaller when offered to Black-led organisations than those offered to their white-led counterparts. Through the research conducted in the study, the answer to why these disparities were occurring was largely due to the difference in donations based on connections between Black-led and white-led organisations, stating that Black-led organisations traditionally have fewer relationships with influential organisations and people, making it more difficult to break into the community as new leaders often lack the ability and experience to forge relationships with potential funders.
According to NCRP’s 2020 Black Funding Denied Report, updated with new census data as of January 2023, community foundations have increased their annual assigned donations to Black communities from $78 million in 2019 to $125 million in 2020. While this is a marked increase year on year, this amount was still only 2.1% of overall giving from community foundations and when compared to the 12% of all charitable giving and 5.4% of independent foundation giving seen in 2020 it is a relatively small increase.
Similarly, Resilia’s #PeerToPeer webinar saw Director of Community Impact, Todd Pittman, cite statistics that the average percentage of revenue from Black-led organisations was less than half of that from white-led organisations. In the same webinar, Executive Director at Class Act Detroit, Rashard Dobbins, cited similar studies mentioning that funders need “to offer direct flexible funding for transformative capacity building.” The results from the webinar show that participants agreed that the greatest coaching need for Black-led organisations in the United States was fundraising focused, highlighting greater the need for further solidifying these relationships and skills.
The Building Movement Project’s Race to Lead report, reiterated the findings of Funding Green and the Bridgespan group in that Black-led organisations start off with a smaller budget to work with and are more likely to report that there is a lack of access to financial support and challenges faced in securing much needed additional funding. The Race to Lead report goes on to disclose that 63% of Black leaders report they lack access to individual donors when compared to 49% of white leaders, a further 51% of Black leaders lacked access to foundations versus 41% of white leaders.
In April 2020, the Ubele Initiative, a social enterprise focusing on the African diaspora, revealed that when compared to the 10% of the charity sector in the United Kingdom being at risk of permanent closure 87% of these organisations were Black-led. Many, if not all of these organisations were focused on responding directly to the communities experiencing the most difficulties due to the COVID-19 crisis within the UK.
In the same timeframe, campaign group #CharitySoWhite found that 65% of Black-led community groups have an average yearly turnover of £10,000, reiterating the reality that decades of underfunding has created a continuous lack of access to resources and support. Common Call’s 2020 report, Common Call: Stories from the Front Lines, found that 60% of the money being fed into Black-led charities and social enterprises came from the savings of their directors. Much like the findings shown earlier, Black-led organisations in the UK report the same lack of connections with funders influencing their ability to forge continuous funding offers creating a cycle of decreased support. As shown in Funding Black-led Micro Organisations in England, this vast difference in relationship building creates a cycle of mistrust between funders and organisations, with many organisations reporting that they are not trusted to manage the funds they receive and therefore receive less, leaving them unable to create the internal structures needed to ensure longevity.
The Funding Black-led Micro Organisations in England research goes on to mention that having access to reserve funds create inappropriate bidding requirements which inadvertently leave Black-led organisations without access to mainstream funding programmes furthering the removal of these organisations from the cycle of sustained funding.
Both US and UK organisations saw a spike in funding grants and public donations during the 2020 Black Lives Matter response to continued police brutality and the public recognition of the inequality of the Black community. Many organisations, in both the UK and US, reported a spike in funding in both June and July of 2020, with a marked decrease in the months that followed demonstrating the donations to be a response to the increase in conversation around racial justice in both countries.
Worldwide COVID-19 affected businesses and communities alike, with Black-led organisations experiencing a gradual decrease in funding directly affecting their ability to assist the communities that rely on them.
Based on the findings in this article, it becomes clear that Black-led organisations both in the United States and the United Kingdom are not offered the same opportunities as their white-led counterparts. From the stark difference in the ability to forge strong, long-lasting connections with founders influenced by years of institutionalised racism to the lack of funds directed to the organisations focusing on supporting the communities they represent, the changes needing to be made to ensure equitable access to funding are not minor.
Where we are able to learn from one another is through the internal changes made to ensure support and resources are provided to those within these organisations who will benefit most greatly. An increase in educational resources around funding, grants and relationship building are the key factors that will support long-term viability.
Due to this reality, Common Call believes that we need to structure our landscape through systems change and being vocal about funding inequality. Setting ourselves as an intermediary funder and giving news and resources to our community is paramount to the mutual success of the organisations we run.
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