At RVC, we have worked with dozens of grassroots nonprofits of color over many years. Some of those organizations have thrived, others have folded. When it comes to building healthy organizations, there is no substitute for visionary leadership and dedicated, driven staff, but every organization we work with has this. So what does it mean when nonprofits have talented staff and a strong mission, yet still don’t thrive? The answer: it boils down to funding.
Our work has shown us that certain funding practices result in successful, impactful organizations, while others result in burning out the very leaders that funders claim to support. The organizations RVC works with are predominantly grant-funded. When those grants are small, arduous to report on, and have to be reapplied for each year, we see organizations that are understaffed, have less time to devote to programs and are more insecure about fulfilling long-term plans. On the other hand, when those grants are large, multi-year operating funds that are easy to report on, we see organizations that are able to deliver amazing programs that affect social change in their communities, while also building an organization that does right by its staff.
Not all dollars are equal
In the funding world, some dollars are unrestricted and build an organization’s autonomy. Other dollars come with lots of strings attached and a huge amount of paperwork. As a nonprofit, it is a privilege to be able to pick and choose what dollars you will accept, and it takes institutional knowledge to be able to foresee which dollars will actually build your autonomy. Organizations led by and for marginalized communities are more likely to end up with the more burdensome dollars and receive grants that perpetuate burnout and struggle.
This is especially true for nonprofits that are small, new to receiving grants or stuck in start-up mode–all of which nonprofits of color experience disproportionately. This is why Black-led organizations have 45% less revenue than white-led organizations and 91% less unrestricted funding, even when focused on the same work. Building social change requires funding to become more equitable- this means making the least burdensome dollars available to most marginalized communities and the organizations that serve them.
None of this is rocket science. In truth, large, well-connected (and usually white) nonprofits have benefited from these helpful grantmaking practices for a long time. So, how do we also ensure that smaller organizations and organizations led by and for marginalized communities also have access to grants that set them up to succeed?
To address this, we collaborated with Vu Le, RVC’s founder, and former Executive Director and author at NonprofitAF.com, to develop the Equitable Grantmaking Continuum. The Continuum outlines a number of funding practices ranging from the most equitable practices (Level 3) to inequitable practices (Level 1). This tool can be used by funders to assess how equitable your funding and grantmaking processes are, and to clearly identify steps you can take to improve your grantmaking processes. This provides a transparent method to make funding more equitable. It is easy and straightforward to use (in fact anyone who has ever taken a Teen Vogue test is already equipped with all the tools they need!) Just go through and select which item is most closely aligned with your funding practices. This will result in a score that will tell you how equitable your funding practices currently are, and highlights where you could be more equitable.
When using the Equitable Grantmaking Continuum, here are a few things to keep in mind:
- Like a hammer, improper usage of this tool can result in damage. Many of the items in the Continuum are useful, but if improperly applied can actually result in more inequities (especially if you already fund a homogeneous group of relatively privileged organizations). For this tool to be useful, it is essential that there is a dedication to funding marginalized communities (item number one in the continuum). Without this dedication, many of these practices can become exclusionary and further deepen inequities. For example, renewing funding through a brief conversation (as opposed to a hefty reapplication process) is generally a more equitable grantmaking process because it does not disadvantage small organizations with less capacity to reapply; however, if you primarily fund large, white-led nonprofits this practice could deepen inequality as it would make it more difficult for nonprofits of color to be funded. So yes, equity is nuanced, it can be complicated, and to some downright intimidating to think about. However, this tool should help demystify it (plus you get a score at the end, which is always kind of exciting).
- Inequity thrives in what seems normal. Inequity thrives because we have become so accustomed to the way things are. Use the continuum to start a conversation in your philanthropic organization that questions what seems “normal” and “rational” in your grantmaking processes. Do you mostly fund white organizations? Ask yourself why that is and who you have overlooked? Are your grant payments disbursed as reimbursements? Figure out what you need to change so that organizations can be paid upfront instead of needing to have cash on hand for all their needs. Instead of justifying why things need to stay the way they have been, get curious about how your funding practices could be more accessible and impactful, and better serve marginalized communities.
- Change is risky and requires boldness. Talking about money is a sensitive topic; so is talking about justice, equity, and the legacy of oppression, especially in the workplace and with your family. If you have decided to work in philanthropy, realize that you have signed up to discuss these topics. Discomfort is now a sign of progress. Grants Program Officers, you may feel uncomfortable bringing up changes to a grants application process with your boss. Family members in family foundations, you may be unsure if you want to have a conversation with Aunt Sally about anti-Black racism. But in those moments, remember that this discomfort is temporary and optional. Marginalized communities don’t have the option to opt-out of discrimination and disenfranchisement. You are in a position to do something about that, so get a good support system and start making change.
- Mistakes are part of the process. Doing things differently invariably means that mistakes will be made, sometimes publicly. Mistakes are scary because they can make you or your organization look bad, flair up imposter syndrome, or expose that we really aren’t in as much control of the universe as we think we are. But mistakes are necessary for experimentation. Begin building a culture of learning that celebrates that we need to experiment to make real progress and that we can share and learn from each other’s mistakes collectively instead of hiding them in shame as a sign of failure. At the same time, track who your mistakes impact. Try to minimize the impact on frontline workers and marginalized communities. When you do invariably make mistakes apologize, make amends, and pay people for any of their time or energy you wasted.
Use the Equitable Grantmaking Continuum
So with this in mind, it’s time to jump in! Funders, take the assessment, share it with colleagues and your Board. If you work at a nonprofit, feel free to share this with the organizations that fund you. Take the Equitable Grantmaking Continuum assessment. Download a one-page overview of the Continuum