Study Pushes for More Transparency in Donation Pledges to Racial Equity
While a surge in intended funding toward racial equity occurred in 2020, it is not yet known if that large swell of donations actually happened, according to a new study.
The joint PolicyLink-Bridgespan Group analysis, "Moving from Intention to Impact: Funding Racial Equity to Win," is calling for funders to be more transparent about where their proposed dollars went, as 94% of donors have yet to report data, which has made pinpointing the actual funding to racial equity efforts extremely difficult.
Donors pledged approximately $11.9 billion in philanthropic capital for racial equity in 2020 — more funding for that cause than the past nine years combined, according to Candid, the parent organization for the Foundation Center and GuideStar. However, those donation announcements in foundation website statements, news articles and corporate press releases can’t be traced beyond that. Based on currently reported grant data Candid has collected, only $1.5 billion in funding for racial equity in 2020 can be tracked to recipients.
“We undertook this work to elevate the capital needs required to win on equity and attract significant investment to equity movement leaders, especially those on the front lines,” Michael McAfee, president and CEO of PolicyLink, said in a statement. “Understanding how funds are aggregated and deployed is a critical piece of that effort.”
Additionally, where the money goes helps to measure the impact. The study, which focused mainly on large-dollar donors through both institutional philanthropy and individuals, named concerns, like not knowing whether the money was supporting work that would result in transformative change, if the money was enough to address historic undercapitalization, and if the money had longevity or was only spurred by the unique collision of a social justice movement in the midst of a pandemic.
“For philanthropy to hold itself accountable to making progress towards an equitable nation, we need funders to share how much of their funding is going to racial equity work—including how much is going to structural or systems change efforts, to organizations led by people of color, and in multi-year general support,” Willa Seldon, The Bridgespan Group partner and co-author of the report, said in a statement.
“The equity movement has matured,” McAfee added, “The next phase of its maturation is for investors and leaders of the equity movement to be able to sit together and align the capital around the transformative results they want to achieve.”