Black-Led Nonprofits See Short-Lived Funding Gains After 2020 Racial Reckoning
New research released on Tuesday reveals that financial gains for many Black-led nonprofits following the racial reckoning after George Floyd's murder in 2020 were short-lived, if they occurred at all. The analysis by nonprofit research service Candid and Black philanthropy group ABFE shows that while a subset of large, Black-led organizations experienced temporary funding increases between 2020 and 2022, smaller organizations saw no significant change.
Initial Promises and Subsequent Disinvestment
The racial reckoning that followed George Floyd's murder carried hopes of new support for disproportionately underfunded, Black-led nonprofits. American companies stepped up donations to historically Black colleges and universities, major climate funders pledged more toward minority groups, and large donors sought to narrow the racial wealth gap. However, the pattern of disinvestment that followed put many community groups at a greater disadvantage, particularly as policies curtailed funding for diversity, equity, and inclusion initiatives.
Black Voters Matter co-founder Cliff Albright noted these community nonprofits are now tasked with helping more low-income families deal with spiking healthcare costs and rising food prices, yet face dwindling resources. "We're literally being asked to do more with less resources," Albright told The Associated Press.
Challenges for Smaller Organizations
Small, Black-led nonprofits—those with annual expenses of $1 million or less—tended to rely on new rather than continuing funders, according to the report. They received just over one-third of their funding from continuing supporters, losing out on transformational relationships that sustain longer-term goals and cushion them through challenging periods.
Asiaha Butler, CEO of the Resident Association of Greater Englewood in Chicago, experienced this firsthand. Her organization, serving a predominantly Black neighborhood, saw more than two dozen new funders emerge in summer 2020. "All of a sudden, we were desirable for people to fund," Butler recalled, describing the initial influx as a "spurt" that later became a "curse" as capital tapered off. "We started seeing this revenue and thinking we're gaining really great relationships with funders. And, really, those priorities shifted quickly."
Lack of Relationships and Transactional Support
ABFE CEO Susan Taylor Batten noted that foundations lacked relationships with Black organizations of any scale prior to 2020. This distance created a scramble when protesters demanded businesses and philanthropies address systemic racism. Kia Croom, a fundraising firm owner working with nonprofits in Black communities, said her clients received more corporate funding than ever, but it was often transactional. Some hired additional staff only to undergo layoffs when funds disappeared.
Kandee Lewis, CEO of Positive Results Center in Los Angeles, which assists survivors of domestic violence, received checks from new supporters but found the support was typically a one-time donation rather than the beginning of a relationship. Lewis felt the funding came only because her group was Black-led, not because funders understood its work. "They were so busy trying to figure out who was who that they didn’t really take time to get to know people," she said.
Limited Networks and Access Barriers
Jaleesa Hall, who heads Raising A Village Foundation in Washington, D.C., emphasized that philanthropy is a relationship game. Small, Black-led nonprofits often aren't in the rooms where funding decisions are made, making it difficult to catch the attention of foundations. According to the report, most foundation grant dollars for these organizations came from first-time funders.
Cathleen Clerkin, associate vice president of research at Candid, described the "song and dance" necessary to secure long-term investment each year. "They're just constantly going on first dates with new funders and hoping that somebody will invest in them and understand them," she said. Small nonprofit leaders are so focused on day-to-day upkeep and financial viability that they lack time for networking or resources to attend national convenings.
Restrictive Practices and Trust-Based Models
Small nonprofits face additional barriers, including grant eligibility requirements and burdensome reporting demands. Limited staff may prevent qualifying organizations from keeping up with foundations' required weekly or monthly reports. "It ends up feeling like a burden," Hall explained. "The juice isn't worth the squeeze."
While philanthropy has seen a sector-wide shift toward trust-based models offering general operating support and multi-year grants, Black-led nonprofits generally have not reaped the benefits. The report showed they had significantly fewer continuing funders than their non-Black counterparts, and only one-third received general operating support, compared to just over half of other nonprofits.
"We are still seeing remnants of bad practice when it comes to investing in Black communities," Batten said. "There’s just no way for a foundation to move its mission for communities in this country, let alone Black nonprofits to move theirs, if we do not evolve this sector."
Ongoing Struggles and Alternative Funding
In Chicago, Butler now hears excuses from supporters who gave at the height of the 2020 racial justice movement, citing shifted priorities or new strategic goals. This downturn delayed a nearly $7 million capital project aimed at strengthening Englewood’s economic and social fabric through a thriving Black business district. By 2023, she secured a $1 million grant—her nonprofit's largest—but compared the search for additional funding to "pulling teeth."
With past philanthropic partners withholding support, Butler is turning to public funding. The City of Chicago provided a $2.5 million grant, and another $1.5 million state award is pending. "Things shifted and so we didn’t want to start soliciting for a capital campaign," she said. "The timing was off."
The struggles highlight a broader issue in philanthropy, where T’Pring Westbrook, a nonresident fellow at the Urban Institute's Center on Nonprofits and Philanthropy, notes foundations often support marginalized communities through "trend funding" rather than sustainable investments. "Maybe during Black History Month there will be a funding campaign," she said. "But the thing about a campaign is a campaign doesn't build sustainability."
