Non-profits are integral to every community’s infrastructure. We feed your neighbors, check their blood pressure, enrich your children’s lives, care for your elders and make sure there is art in your public spaces.
But right now, we’re hurting. Because even as public funds are being pulled from organizations that serve those in need, the ranks of the needy are growing. And while many non-profits are suffering, Black-led and Black-serving organizations in Metro Denver and across the country are really struggling.
By some estimates, a mere 1.8 percent of philanthropic dollars nationwide go to Black-led organizations. Following 2020’s Black Lives Matter protests, commitments to racial equity and Black-serving organizations surged. Of those commitments that were actually acted upon, much of that support came in the form of one-time grants that have long since expired.
By 2024, that momentum plateaued. Not that there are many Black-led non-profits to receive support. Of 45,061 non-profit organizations surveyed in 2024 by Candid and the Association of Black Foundation Executives, 15 percent had Black chief executives. And among more than 12,000 surveyed nonprofits, only 12 percent of those with budgets over $10 million had Black leadership.
We hear a lot of reasons for the disparity in funding of Black non-profits. One of the most common, and, to my mind, one of the most illogical, is that Black organizations don’t have capacity—they don’t have enough staff to collect and present the data large philanthropic organizations require for funding. The obvious Catch-22 is that you can’t have capacity if you don’t have funds to invest in it.
For too long philanthropy has largely eschewed funding operating budgets which are the key for building organizational capacity—the staffers that handle accounting and budgeting, fundraising, data collection and infrastructure. That needs to change, especially now.
MacKenzie Scott, the ex-wife of Amazon’s Jeff Bezos, has done a lot to change how non-profit philanthropy is practiced, especially for organizations of color. The most important is that her large awards come with no strings attached. Recipients can use the funds in any way that makes sense in pursuit of their mission. What’s important about her method of giving is that it extends trust to non-profits that they know best how to deploy those funds. And her method of giving helps build capacity. The philanthropic sector has known for years how important multi-year, general operating support is to nonprofits. Yet, that is the most difficult funding to secure.
But funders are taking notice of her approach.
While unrestricted grants from foundations — which can pay salaries of data-collectors and bookkeepers, facility costs and keeping the lights on — remain the Holy Grail for nonprofits hoping to build capacity, the rise of donor-advised funds often is helpful too. Wealthy donors are using these vehicles to direct their charitable giving, rather than underwriting the staff and operations of having their own foundation. And often donations from DAFs arrive without strings attached. The problem is some non-profits benefit more than others and studies show that those nonprofits providing human services and healthcare tend to suffer.
And that’s why relationships are crucial. Smaller nonprofits need to connect more with the foundations and financial entities that hold these donor-advised funds. Building relationships, of course, requires access — to board rooms, to social functions, to civic leaders and the philanthropists themselves. And that’s precisely the kind of access Black leaders have historically been denied or have struggled to cultivate.
None of this is easy, but smaller non-profits must get better at building boards whose members not only have connections to the communities being served but can open doors to wealthy individuals and foundations that can support the mission.
And we have had some success. During Covid-19, CAA Health raised $3.5 million from foundations and individuals to help us purchase our building for $4.7 million. In 2023-24, we raised another $2 million for renovations. Our broad community and foundation support was a testament to our long history of service, the champions who advocated for us behind closed doors, and our ability to dream big.
But meaningful change cannot happen without a broad re-imagining of how philanthropic dollars are distributed and the importance of greater freedom to allow organizations to use those funds for capacity building.
Operations are just as important as programming. They go hand-in-hand.
Deidre Johnson is co-CEO of the Center for African American Health in Denver.