The world of philanthropy wields powerful influence. American individuals, bequests, foundations and corporations gave an estimated $449.64 billion to U.S. charities in 2019, one of the highest annual amounts ever for charitable giving. Yet too often people of color pursuing their share of that funding to scale social innovation are left out. A new Racial Equity Philanthropic Fund from global non-profit Echoing Green sets out to address that imbalance.
To support the current historic movement toward racial justice, the Fund aims to raise $50 million for strategic investments in racial equity focused work. The overarching goal is to transform the field of social innovation over the next three years and ensure that today’s heightened awareness of racial inequity translates into sustained action and impact, according to Echoing Green President Cheryl Dorsey.
“We're in unprecedented times where you have this confluence of the twin pandemics of both structural racism and COVID-19,” Dorsey told TriplePundit. “I think in this moment, when you have laid bare the many structural inequities that confront people of color and other marginalized groups, philanthropy has an important role to play. Its raison d’etre is to help solve societal problems and those in need. To me, this is what philanthropy is called to do.”
The Racial Equity Philanthropic Fund will support the following goals:
Launch and scale 500 social enterprises focused on racial equity in both the U.S. and globally. In addition to launching new leaders, Echoing Green will invest follow up funding in its portfolio’s most high-impact enterprises to help founders scale their solutions.
Build onramps to social innovation for 5,000 leaders focused on racial equity. Echoing Green will provide social innovation programming and learning opportunities to communities that have historically not had access to the tools or capital required to build and scale.
Create opportunities for engagement in the movement for racial equity for 10,000 corporate employees. Leveraging existing employee engagement programing, Echoing Green will engage partner institutions in both shorter, time-bound and longer, in-depth opportunities to contribute to the movement.
As Dorsey told 3P, “As best we can tell, there has not been a coordinated effort in the field of social innovation to focus squarely on racial equity. And because Echoing Green is one of the leaders in the field of social innovation that has always done its work at the intersection of innovation and justice, we felt compelled to help social innovation meet this moment.”
A sign that investors as well as philanthropists are looking more closely at how to engage more effectively in racial justice is the success of the NAACP’s Minority Empowerment ETF, on which 3P has previously reported.
To gain a better understanding of the barriers facing entrepreneurs of color, Echoing Green teamed up with The Bridgespan Group on a research report published in May, “Racial Equity and Philanthropy: Disparities in Funding for Leaders of Color Leave Impact on the Table.”
The report looked at Echoing Green’s applicant pool, a group that is considered among the sector’s most promising early-stage organizations. In fact, of Echoing Green’s close to 3,500 submissions each year, the acceptance rate for a Fellowship is only 1 to 2 percent.
Assessing only Echoing Green’s highest qualified applicants (i.e., those who progressed to its semifinalist stage and beyond, about 160 organizations), the report found that revenues of the Black-led organizations are 24 percent smaller than the revenues of their white-led counterparts, and the unrestricted net assets of the Black-led organizations are 76 percent smaller than their white-led counterparts.
“It is extraordinarily difficult to make it across the finish line of the Echoing Green application process,” Dorsey acknowledges. “If you're still standing at the end of this process, these leaders are phenomenal. And the fact that despite their caliber, our leaders of color were having difficulty raising funding really signaled to us that there were real entrenched structural barriers confronting these leaders.”
Tomorrow: We’ll focus on how the lack of access to various professional networks can end up excluding people of color from benefitting from the U.S. philanthropy community.
Image credit: Gayatri Malhotra/Unsplash
Based in southwest Florida, Amy has written about sustainability and the Triple Bottom Line for over 20 years, specializing in sustainability reporting, policy papers and research reports for multinational clients in pharmaceuticals, consumer goods, ICT, tourism and other sectors. She also writes for Ethical Corporation and is a contributor to Creating a Culture of Integrity: Business Ethics for the 21st Century. Connect with Amy on LinkedIn.
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