Three Organizations Invest $40M in Seed Funding for Black-led Nonprofits
Ballmer Group, Echoing Green, and New Profit announce $40M in seed funding for a new initiative to address the systemic funding gap for Black-led nonprofit organizations in the U.S. The grant will fund a five-year initiative to build leadership and sustainability of Black-led organizations focused on economic mobility. Over 100 Black-led organizations will receive both capital and operational support to help spur innovative solutions and provide Black leaders with the tools that they need to scale and achieve their missions over the long term.
“The goal of this initiative is to address an undercapitalized market and invest in Black leadership to spur innovation and improve economic mobility,” said Eshauna Smith, Director of Community Impact at Ballmer Group. “Industry leaders New Profit and Echoing Green come to the table with a combined 60 years of experience supporting founders and emerging leaders and shaping economic mobility in the U.S. The good news is that race-based funding gaps are addressable. There are incredible opportunities for funders like us to step up, and we are excited to take this first step.”
Funding disparities limit access to capital for Black founders and leaders. “The troubling pattern of Black nonprofit leaders being unable to scale organizations is overwhelmingly due to limited access to capital compared. For these brilliant leaders and their timely innovations, we need to increase their ability to scale appropriately,” Echoing Green President Cheryl Dorsey notes. “That means transformative community-led solutions are left to languish on the vine. This grant from Ballmer Group will enable us to simultaneously sustain proximate leadership and spur economic mobility among an undercapitalized and often overlooked demographic.”
Despite making up around 10% of nonprofit leadership in the U.S., Black and Latine nonprofit leaders only receive 4% of philanthropic funding. A recent study by Echoing Green and the Bridgespan Group shows that the funding received is smaller and more likely to be restricted than white-led organizations. Data shows that early-stage Black-led nonprofits have 24% smaller overall revenues and 76% smaller unrestricted net assets, indicators of continued bias and lack of trust in Black leaders in the funding landscape.
“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. “This support from Ballmer Group allows us to help advance the impact of those leaders, who are grounded in and guided by the assets, expertise, and brilliance of their constituents and communities.”
The initiative takes a two-part strategy to help grow Black-led organizations past the start-up and middle growth phases where too often lack of capital limits scale.
Echoing Green will utilize the Ballmer Group funding to support organizations under two years old. Black-led start-up organizations have significant challenges raising initial capital. Echoing Green’s model is designed to provide both early investment and follow-on-funding to overlooked talent with ongoing
assistance in the areas of fundraising, strategic planning, board development and operational practices.
These foundational supports are key to creating sustainable enterprises.
New Profit will use the funding from Ballmer Group to support proof-of-concept through early-scale nonprofits. Black-led organizations at these stages of enterprise development often have the potential to create outsized impact but face systemic barriers in securing the flexible resources and tailored capacity-building support needed to scale and deepen their impact. New Profit will provide single- and multi-year unrestricted funding, peer learning communities, and deep advisory support to catalyze innovation and build the leadership capacity of economic mobility entrepreneurs who aspire to national impact.
Co-founded by Connie and Steve Ballmer, Ballmer Group funds organizations and leaders to reshape opportunity and expand economic mobility across the United States. According to Ballmer Group’s Smith, “These grants represent a powerful opportunity to address inequity, support leaders of color, spur innovation, and build nonprofit capital through trusted intermediary partners, Echoing Green and New Profit. Their proven approaches recognize that proximate, representative leadership is essential and that diverse leadership teams achieve better outcomes.”
The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of the staff of NonProfit PRO.