A new grantmaking effort funded by former Microsoft CEO Steve Ballmer and his wife Connie’s philanthropic arm will provide $42.5 million over the next five years to support more than 100 Black-led nonprofits focused on improving economic mobility.
The effort, announced Thursday, aims to help close the funding gap for early- and mid-stage Black-led nonprofits, whose unrestricted assets are 76% smaller than their white counterparts’ assets. The 110 Black-led organizations chosen will also receive advising from the philanthropy ventures Echoing Green and New Profit, both of which invest and help expand nonprofits that are just getting started.
Charities’ first few years in operation can be challenging, especially for Black-led organizations, which face systemic gaps in funding and other barriers to expanding their reach, says Aaron Dorfman, CEO of the National Committee for Responsive Philanthropy, a research and advocacy organization
New nonprofits can be hotbeds for innovation, but often struggle to attract enough funding to stay afloat, says Susan Batten, CEO of ABFE: a Philanthropic Partnership for Black Communities, an organization of grant makers and nonprofits focused on improving investments in Black causes.
“The only way to benefit from these new ways of thinking is to resource these organizations for success,” says Batten, who praised the Ballmers’ focus on building up organizations that are committed to economic justice and reducing the country’s racial wealth gap.
With the funding from Ballmer Group, Echoing Green will select Black-led nonprofits less than two years old to receive start-up grants, plus assistance in building up their fundraising, strategic planning, and other operational support. Black-led organizations in later stages of development will receive unrestricted grants, which can be used for any purposes a nonprofit sees fit, alongside advisory support from New Profit.
“Despite the disparity in funding for Black-led organizations, there is no shortage of visionary Black leaders who are joining with their communities to build new systems of opportunity in America,” said Tulaine Montgomery, co-CEO of New Profit, in a statement.
BIPOC-led nonprofits are more likely than white-led groups to have leaders who are representative of the people they serve and are also more likely to publicly advocate for policies that advance racial equity, according to the Nonprofit Finance Fund’s 2022 State of the Nonprofit Sector Survey. Yet Black- and Latino-led groups, which make up roughly 10% of nonprofits, receive only 4% of philanthropic funding.
“A lot of our Black-led nonprofits and the organizations we have a relationship with don’t have a million dollar budget because philanthropy has under-invested in them for years,” says Dorfman, who noted that other efforts aimed at local nonprofits, like MacKenzie Scott’s $250 million competition, have excluded the smallest nonprofits by only accepting proposals from groups with budgets over $1 million.
Many foundations and philanthropists have made new commitments to funding Black-led nonprofits since 2020, when George Floyd’s murder and the protests that followed sparked national conversations about anti-Black racism. The California Black Freedom Fund has been investing $100 million in Black-led nonprofits involved in advocacy and movement-building across the state, and the Southern Power Fund has funneled over $16 million to largely Black-led local nonprofits across the South.
Yet while grantmakers have “made some inroads” in recent years, they still have a long way to go in bringing equitable and consistent funding to Black-led nonprofits, says Marc Philpart, executive director of the California Black Freedom Fund.
“We’re trying to address intergenerational problems with short-term commitments and special projects,” says Philpart, who emphasized the need for multi-year support for Black-led nonprofits.
