Posted on June 7, 2021

A Year Later, Racial Reckoning Yields Uncertainty in Giving

Glenn Gamboa, Associated Press, June 2, 2021

One year ago, as protesters filled America’s streets demanding justice after George Floyd’s murder by police, corporations and major philanthropists pledged an outpouring of donations for racial equity causes.

Billions of dollars were committed to new philanthropic initiatives. Billions more were directed to new business practices designed to aid minority communities. From poverty and police conduct to housing and education, the causes ranged broadly, with many donors looking to address the underfunding of nonprofits, especially in Black communities.

Those causes may yet receive the money they were pledged. Yet a tangle of complex tax rules and the absence of a framework to track funding for racial equity programs — or even a consensus on what a “racial equity program” is — have made it all but impossible to assess the overall effectiveness of the donations.

A year later, racial justice retains its high profile across the country, even if protests are now fewer and smaller. And though discussion about increasing diversity in all aspects of American life goes on and some changes have been adopted, advocates so far see little systemic progress.

“The events of last year have changed the way some foundations work,” said Aaron Dorfman, CEO of the National Committee for Responsive Philanthropy, a research and advocacy group. “You’re going to see higher raw-dollar figures and higher percentages explicitly intended to benefit Black communities and other communities of color. A lot of us who are proponents of racial justice and social justice are really hoping that this newfound commitment continues. It’s an open question as to if it really will.”

In a joint reporting effort, The Associated Press and The Chronicle of Philanthropy are examining how money pledged and donated in the name of racial justice has actually been used so far. Many nonprofits that received money after the Floyd protests channeled it into programs that serve minority communities.

Such successes are important, experts say, because even though philanthropic groups overwhelmingly say they want to help foster racial justice, many of them are unsure of exactly what to do.

“Foundations themselves told us they weren’t sure which changes were going to continue,” said Ellie Buteau, the Center for Effective Philanthropy’s vice president of research, who surveyed more than 800 foundations last summer about their plans for racial equity. {snip}

Nearly 90% of the 236 foundations that responded to Buteau’s survey said they had launched programs to help make the response to COVID-19 more equitable, according to the Center for Effective Philanthropy’s “ Foundations Respond to Crisis: Toward Equity? ” report. More than 75% said they had initiated efforts to support nonprofits that serve communities of color.

Many of the foundations Buteau spoke with told her they were “trying to learn more about racism” and were trying to “self-reflect” about hiring and grantmaking practices. Fewer foundations, though, were making permanent structural changes.

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For Dana Lanza, CEO of the Confluence Philanthropy, a network of foundations, donors and advisors that are trying to align their investment decisions with their values, the fact that more philanthropic organizations haven’t taken that first step in the year after Floyd’s murder is worrisome.

“We can’t solve racial equity until we change the dynamics of who gets to make decisions,” Lanza said. {snip}

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With that in mind, Confluence Philanthropy created the 2020 Belonging Pledge last June, which asked investors to commit to discuss racial equality at their next investment committee meeting. It’s a first step that has drawn 185 signatories, including Rockefeller Philanthropy Advisors and The California Endowment, which have $1.8 trillion in assets under management.

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The pledge, which will likely be expanded this fall, even raised issues among those that didn’t sign it, including an investment firm working with foundations that manages close to a trillion dollars and “wanted to sign the pledge, and they got pushback from management because they realized that they hadn’t done a demographic survey internally in years,” Lanza said.

She added, “You can’t have a racial justice grantmaking program if you’re not practicing racial equity in the investment practices of your endowment.”

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