In 2020, Measurement Resources conducted research to compare the disparities across juvenile justice, education, and health systems, related to youth of color in two urban regions. Despite both regions’ established industries and cultural legacy, our research underscored how drastically different youth of color experience life in Northwest Ohio and Southeast Michigan, compared to their White counterparts. These inequities, exacerbated by the impact of COVID-19, have been festering for years, as significantly less funding has found its way to minority-led and Black-led nonprofits uniquely positioned to solve these complex social problems. Why then—if minority-led organizations are catalyzing change and demonstrating better outcomes by delivering culturally relevant programs—haven’t philanthropic organizations doubled down on their investments in these minority-led organizations?
Fighting Historical Funding Biases
For non-profit organizations, funding has been extraordinarily competitive and disparities stemming from implicit bias have long been prevalent throughout the philanthropic arena. Existing national research has demonstrated that Black-led organizations (BLOs) have smaller budgets than White-led organizations, and data suggests this also holds true for the BLOs in Northwest Ohio and Southeast Michigan regions.1 For example, the average budget of organizations with CEOs of color is approximately 24% smaller than White-led organizations, and overall, CEOs of color find it more difficult to raise money.
To combat these funding biases, non-profit organizations must take a data-driven approach to demonstrate their unique value to funders, foundations, donors, and other stakeholder groups. Likewise, philanthropic organizations must examine their own rubrics for how funding is awarded. Is it based on historical giving or existing relationships? Or is it rooted in performance metrics and the social outcomes achieved by grant applicants? By addressing both sides of the funding equation—nonprofits leveraging data to illustrate their social outcomes—and foundations using a data-driven approach to award funding, then social sector could reduce, if not eliminate this bias over time, which has cast its dark shadow over countless communities for far too long.
Funding Black-Led Organizations Can Lead to Greater Results
Across the Northwest Ohio and Southeast Michigan region, more than $746 million was invested into non-profit organizations. Research revealed that grant dollars and other funding for Black female-led non-profit organizations significantly predicted academic outcomes. For every $13 million increase in non-profit organization funding in 2018, the percent of Black students scoring below proficient in math decreases by 4.5% (i.e., more Black students scored proficient or higher with additional non-profit organization funding in 2018).2 And for every $3.5 million increase in Black female-led non-profit organization funding in 2016, Black students scoring below proficient in math decreased by 1.9%.3
Research reveals that investing in Black-led nonprofits in the region also leads to more positive outcomes. As the proportion of Black students within a school increases, the number of suspensions also increases; however, this relationship changes based on the amount of funding Black female-led non-profit organizations received in the community. Specifically, when funding received by Black female-led non-profit organizations increases, the relationship between the proportion of Black students within a school and number of suspensions becomes negative.4 Thus, the amount of funding Black female-led non-profit organizations receives has a positive impact in schools by reducing the number of suspensions.
Measurement Resources Helps Nonprofits and Philanthropic Organizations
This recent research is just one example of how Measurement Resources can bring large-scale social disparities into a more localized context. Through services such as calculating your nonprofit’s social return on investment (SROI) to researching trends and historical grantmaking practices through an equity lens, we can help bring attention to the unique value that your organization brings by delivering culturally relevant programs and producing superior outcomes.
For philanthropic organizations, Measurement Resources can evaluate your current funding practices and identify the right metrics for assessing where investments ought to be made. Our work helps foundations become more data-driven and equitable in its approach to grantmaking, which in turn yields even greater community results.
1 The non-profit organizations in Northwest Ohio and Southeast Michigan with a 990 on file and for whom the race of the director could be identified (n=909) 20% were Black-led organizations, and 12% were led by a Black woman.
2 In a multilevel model (schools nested within ZIP code), accounting for the school population, percent of the entire school population scoring below proficient, and the percent of the student population identifying as Black, b = -4.5, p < .001
3 In a multilevel model (schools nested within ZIP code), accounting for the school population, percent of the entire school population scoring below proficient, and the percent of the student population identifying as Black, b = -1.88, p < .05
4 In a multilevel model (schools nested within ZIP code), accounting for the school population, percent of the entire school population identifying as black, and the amount of funding black, female-led NGOs received in 2018, interaction effect of school population identifying as black by black, female-led NGO funding received in 2018 (b) = -4.28, p < .01