A recent study highlights the challenges faced by Black-led nonprofits as initial funding surges following the 2020 racial justice movement have subsided. The research, conducted by Candid and ABFE, reveals a complex landscape where some organizations experienced temporary increases in funding, while smaller entities saw little to no significant change.

Short-Lived Funding Increases

The influx of capital in 2020 was initially welcomed, but often proved unsustainable. Many organizations struggled to maintain operations and programs as funds rapidly decreased. This created a situation where nonprofits were tasked with serving an increasing number of low-income families with fewer resources.

Impact on Smaller Organizations

The report emphasizes that smaller organizations, lacking pre-existing relationships with major funders, were particularly vulnerable. They often relied on new funders, leading to a loss of the transformational relationships crucial for long-term resilience. Susan Taylor Batten, CEO of ABFE, noted that foundations often lacked relationships with Black organizations prior to 2020, creating a scramble when pressure mounted to address systemic racism.

Administrative Actions and Funding Uncertainty

The current situation is further complicated by administrative actions, including threats to social service programs and staffing cuts that create uncertainty around future grants. This has had a chilling effect on racial justice funding, according to the report. Asiaha Butler, CEO of the Resident Association of Greater Englewood, experienced this firsthand, noting that an influx of funders ultimately became a challenge.

Hiring and Layoff Cycles

Fundraising executives were often hired to manage the initial surge in funding, but many subsequently faced layoffs as funds dried up. Kia Croom, a fundraising executive working with nonprofits in Black communities, stated that her clients received more funding than ever before, but also experienced layoffs when the funding disappeared.

The Need for Sustainable Philanthropy

The analysis underscores the historic underfunding of Black-led organizations and the importance of systemic change. The report calls for a more thoughtful and sustainable approach to philanthropy, prioritizing strong, lasting relationships between organizations and funders. Kandee Lewis, CEO of Positive Results Center, expressed gratitude for initial support but highlighted the need for continued funding.

Ultimately, the objective is to secure the long-term viability of these organizations and support the communities they serve through consistent funding streams that can withstand economic and political shifts.