Foundations and Racial Equity in 2020

The second of three CEP reports on foundations’ response to crisis in 2020, focused on racial equity, reveals a striking truth about our field: we often don’t know what we don’t know. And that prevents us from acting, which, ironically, is the best way to learn.

Our experiences at the Ford Foundation point to the benefits and challenges of learning by doing. (Disclosure: Ford provided funding for CEP’s research effort.)

Over the last five years, we have undertaken a number of initiatives that have required significant organizational commitment: using our endowment to make mission investments, advancing disability inclusion across our operations and programs, issuing a social bond to double our funding in response to the pandemic, and launching our BUILD initiative to invest in the long-term sustainability of social justice organizations. We named each of these major commitments before we built the internal infrastructure to support them.

What these commitments have in common is that they are the result of feedback from the field. Let’s take BUILD, for example. We heard from grantee partners that the way we funded was not fit for purpose. The road to social justice is not paved with one-year project grants — yet, to our surprise, when we ran the numbers we saw that those were 80 percent of our grants. So we developed BUILD to change this, and now the ratio is reversed; 82 percent of our grants this year have been general or core support. Our grantees report more fruitful and supportive relationships.

When it comes to racial equity in our grantmaking, we are once again hearing from the field — and we’ve once again found ourselves surprised when we look within. Demands for greater relationship with and accountability to communities of color, especially Black and Indigenous communities, are louder and more pointed than ever. Further, we see ever more clearly that systemic underfunding of organizations led by people of color hampers their growth and health. When seeking to account for Ford’s funding to Black-led organizations and those led by people of color, we were surprised to see that our past choices had created a gap in our understanding.

As one of us (Chris) and our former colleague Megan Morrison described on the CEP blog in 2018, we recently revamped how we collect data on grantee diversity. Our grounding principle was, “If we haven’t figured out how to collect it ourselves, we won’t ask others to provide it.” And so we began to ask for grantee diversity in the leadership team, rather than at the CEO level. This has led to a certain ambiguity in what we can report out. We can identify which organizations we fund have executive leadership that is majority people of color (23 percent of Ford grantees this year), but depending on how one defines Black-led, we’re not able to say precisely how many Black-led organizations we support.

Because of these experiences, one finding in the CEP report was particularly striking to us. When asked what percentage of their pre-pandemic funding was going to organizations led by people from various underserved populations, between 13 and 28 percent of respondents said they didn’t know.

We empathize with those respondents. When you don’t know what you don’t know, it can be a painful truth to have that pointed out to you.

As we’ve looked within, we have focused on improving and amplifying a series of practices that, in our experience, contribute to greater racial equity in grantmaking:

• Work harder to “source” grantees. Funding is about relationships, and your program staff’s networks shape, to a large degree, what comes up on your radar. We hire diverse program officers and directors, and we have come to rely more on advisory panels, snowball approaches to developing lists of potential grantees, referrals from fellow funders, and organizations focused on particular racial and ethnic populations.
• Trust investing in somewhat smaller organizations. With limited time, it is easy and tempting for funders to default to making larger investments in organizations that readily demonstrate more absorptive capacity and fundraising acumen. But this is not necessarily where there exist the closest relationships to community. And this approach doesn’t take into account historic patterns of underinvestment in organizations led by women and people of color. Plainly put, size is an unreliable proxy for impact. While we do look at the percentage of an organization’s overall budget that our funding represents, we consider it as a guideline and not a ceiling.
• Provide MYGOD (multiyear general operating dollars) especially for these organizations. This has been the number-one learning from the BUILD initiative: the combination of multiyear funds — provided as general support, with a targeted focus on institutional strengthening — have contributed to greater impact. All three components are necessary and reinforce each other. As it is our individual grantmaking teams that determine who receives BUILD grants, we see a wide range of organizational budget sizes and diversity of leadership among BUILD grantees.
• Ask and listen to these organizations’ leaders. It’s a delicate art to balance listening, feedback, and being a burden. We ask a lot of our grantee partners questions in service of our learning. And we know we’re not the only ones. But it’s essential to create avenues for unfiltered — or less filtered — communication. We’ve sought to do this by increasing the number of nonprofit leaders on our Board, inviting BUILD grantees to help shape our theory of change and evaluation design, and working through our communications to center and amplify grantee partner voice.
• Network and support these organizations’ leaders and staff. The Ford Foundation Center for Social Justice — when we’re able to be there! — is designed to help social sector leaders meet and collaborate. Within that broad invitation, we have offered more targeted support based on what we’re learning and hearing in the field. Within the BUILD initiative, we’ve convened women leaders of BUILD grantee partners and designed an executive-transitions cohort for women of color leaders who are succeeding a founder or longtime leader — often white. Our Ford Global Fellows program is similarly designed to amplify and connect compelling leaders embedded in vibrant ecosystems.
• Use the good tools and supportive communities available in the field. In developing BUILD (as with all of our major commitments), we relied on examples set by our peer foundations, like those in the Trust-Based Philanthropy Project. We’ve also relied on the partnership, networks, data, and community provided by many organizations that make up the infrastructure of our sector: CEP, CHANGE Philanthropy, GEO, Candid, and others. These days, we are finding the Philanthropic Initiative for Racial Equity’s “Grantmaking with a Racial Justice Lens” guide to be particularly insightful reading.

It’s encouraging to see that more funders are starting to address racial equity. Here’s hoping we can support each other in doing so — and be gracious and receptive when grantee partners and community members point out where we get it wrong. The alternative is continuing to not know what we don’t know — and look where that’s gotten us.

Hilary Pennington is executive vice president of programs at Ford Foundation and a member of the CEP Board of Directors. Follow her on Twitter at @hpennington_.

Chris Cardona is program officer for philanthropy at the Ford Foundation. Follow him on Twitter at @chriscardona.

The Ford Foundation provided funding for the CEP research referenced in this blog post.