·
6 minute read
Diversity, equity, and inclusion (DEI) are not just buzzwords in the world of philanthropy. They are essential practices that grantmakers must embed into every aspect of their operations if they aim to create long-lasting, equitable change. Grantmakers provide critical resources and support to nonprofits that address society's most pressing issues. Grantmaking is a method to move the needles on the cause area and mission focus of foundations. By bringing resources to nonprofits, foundations help advance positive outcomes and progress. DEI strengthens the way forward for causes and communities. A grantmaking approach that intentionally integrates diversity and inclusion can lead to more innovative solutions, a broader reach in underserved communities, and a more significant impact on society as a whole.
Incorporating DEI in grantmaking is also an opportunity to recognize the systemic barriers that many organizations, particularly those led by people from underserved communities, face when trying to access funding. By uncovering these barriers, foundations can better partner with community leaders for solutions that work for all involved. This includes offering support to smaller, under-resourced nonprofits and embracing trust-based philanthropy as a mechanism for equitable giving.
How to integrate DEI into your staff and board
The first step in integrating DEI into your grantmaking process is to take a hard look at the internal makeup of your organization. The staff and board members who make decisions about where funding goes should reflect the diversity of the communities they serve. If your team lacks diversity, it can unintentionally perpetuate biases that influence decision-making, making it harder for underserved groups to access crucial resources.
How can grantmakers facilitate connections and collaboration with the communities they aim to serve? Start by recruiting board members and staff from a variety of racial, ethnic, socioeconomic, and gender backgrounds. Not only does this improve decision-making by incorporating multiple perspectives, but it also sends a message to grantees and partners that your organization values representation. A diverse board can bring invaluable insights and firsthand experiences related to the communities receiving funding.
In addition to diversifying your leadership, it is essential to implement DEI training across your organization. This ensures that all staff and board members, regardless of their background, are equipped to make inclusive and equitable decisions. Fostering a workplace culture where diverse perspectives are valued can lead to more innovative grantmaking practices that better serve a wide range of nonprofits.
How to integrate DEI into your grantmaking strategy
The second step is to incorporate active listening and feedback loops with community leaders and the communities you serve. Being present and creating space for these conversations strengthens trust among community members and provides critical feedback to incorporate into your grantmaking strategy.
DEI strategy continues to have powerful ripple effects beyond internal core structures at foundations. By bringing DEI values to your grantmaking program, additional opportunities for new organizations, new programs, and strengthening existing collaborations are possible. The chosen causes and issues important to your foundation can be strongly addressed by a commitment to serving all, including underrepresented members within communities. This can be achieved through a combination of promoting diversity, equity, and inclusion among grantees and ensuring that funding decisions reflect a commitment to serving underrepresented communities.
DEI strategy can be further amplified by embracing trust-based philanthropy. What is trust-based philanthropy? It’s a model that shifts power dynamics between grantmakers and grantees, allowing nonprofit leaders—particularly those from underserved communities—the flexibility to use funds where they’re needed most. Trust-based philanthropy minimizes the often rigid and bureaucratic restrictions that many nonprofits face when applying for and receiving grants, empowering them to make decisions that align with their unique needs.
"Walk in and say, 'I know what you're doing, I have the solutions, I can fund you.' But understanding whether you have created space for your grantees, nonprofits, and communities to tell you what they think of you and your work is important."
Satonya C. Fair, JD, President and CEO
PEAK Grantmaking
By incorporating DEI into your grantmaking strategy, you’re not only promoting equity within the organizations you support, but you’re also contributing to long-term, systemic change. Prioritizing funding for nonprofits led by people of color, women, LGBTQIA+ individuals, and other marginalized groups ensures that their voices are amplified and that their communities are directly benefiting from philanthropic support.
Why diversifying your grantmaking portfolio matters
A diversified grantmaking portfolio is critical to meeting the evolving needs of diverse communities. By supporting a wide range of nonprofits, you help ensure that more organizations have equitable access to resources, particularly when it comes to capacity building. A Bridgespan report reveals a $20 million funding gap between White-led and Black-led organizations, emphasizing the disparities between communities.
A survey by the Nonprofit Finance Fund found a staggering discrepancy in funding and demand between BIPOC-led and White-led organizations:
- 64% of BIPOC-led organizations have experienced a significant increase in demand over the last two years, compared to only 47% of White-led organizations.
- 71% of White-led organizations received corporate donations compared to only 58% of BIPOC-led nonprofits.
- 86% of White-led organizations received foundation money compared to 75% of Black-led organizations and 82% of BIPOC-led organizations.
This demonstrates the need for increased investment, diverse community support, and equitable access to resources. Capacity building for nonprofits is crucial to leveling the playing field. This includes providing nonprofits with the training, infrastructure, and financial sustainability they need to grow and scale their operations. For example, many smaller nonprofits—especially those in rural or low-income areas—often lack the capacity to apply for and manage large grants. Grantmakers can help bridge this gap by offering resources for nonprofit leaders to improve their fundraising capabilities, enhance their operational efficiency, and build a more sustainable organizational infrastructure.
Consider incorporating a nonprofit capacity-building program like Catchafire as a critical accelerator for the grantees in your grantmaking portfolio. Types of capacity building for nonprofits can range from leadership development to enhancing technology infrastructure to creating financial sustainability plans. By investing in these areas, you not only help individual nonprofits grow but also contribute to strengthening the overall nonprofit sector. On Catchafire, nonprofits have access to thousands of skills-based volunteers who can provide support ranging from technology upgrades, to strategic planning, to data analysis that helps organizations track their outcomes more effectively.
This diversified support is critical because it allows smaller, under-resourced organizations to compete on a more level playing field with larger, well-established nonprofits. As a grantmaker, it's essential to evaluate your current portfolio and identify areas where you may be unintentionally excluding certain groups. Equally important, is being an ally of those new nonprofits and grassroots organizations you’ve gotten funding for. Opening doors to technical assistance and a network of support that Catchafire provides can be a gamechanger for these organizations. This may involve adjusting your funding criteria to be more inclusive or offering technical assistance to help smaller nonprofits successfully apply for grants.
"Be a leverager, a connector, and use your positional power for good. If you are feeling not seen, heard, or activated, whether at a nonprofit, funding institution, or something in between, you have something folks need. You have an ability to change the game, remove barriers, and be an advocate and voice for others. You have so many things in your toolbox that you can activate to help change everything for good."
Satonya C. Fair, JD, President and CEO
PEAK Grantmaking
Read more insights from our conversation with PEAK Grantmaking.
Capacity building: What Catchafire knows
Nonprofit capacity building is one of the most effective ways grantmakers can ensure that organizations serving under-resourced communities have the resources they need to thrive. When you invest in building capacity, you provide nonprofits with the tools and knowledge to become financially sustainable, improve their operations, and ultimately increase their impact.
How to build capacity in nonprofit organizations is a question many grantmakers are exploring. One answer lies in offering unrestricted funding or multi-year grants, which allow nonprofits to use the money where it's needed most. This might include investing in staff development, enhancing financial management, or improving operational efficiencies. When nonprofits have the flexibility to allocate resources toward capacity building, they are better positioned to fulfill their missions and create lasting change in their communities.
Grantmakers can also encourage grantees to participate in capacity-building programs like Catchafire that focus on long-term sustainability. Whether it’s through organizational capacity building or community capacity building, these efforts help nonprofits build resilience and remain agile in response to economic shifts, policy changes, or unexpected crises.
Evaluating capacity-building efforts for nonprofit organizations is also essential to ensure that the resources provided are being used effectively. Grantmakers should regularly assess the outcomes of their capacity-building investments to determine whether they are contributing to the growth and sustainability of their grantees. By following nonprofit capacity building best practices, you can ensure that the organizations you support are better equipped to address the challenges facing their communities.
How diverse nonprofit support leads to positive community outcomes
When grantmakers diversify their support of nonprofits, particularly through capacity-building initiatives, it leads to positive outcomes for entire communities. By offering resources to a wide range of organizations, especially those serving underrepresented populations, grantmakers help create more equitable solutions to societal challenges.
For example, nonprofits focused on affordable housing, education, or healthcare may require different forms of support based on the communities they serve. You may be assessing, ‘How can I be a better grantmaker?’ By recognizing that a one-size-fits-all approach doesn’t work, and by offering tailored capacity-building resources, grantmakers can ensure that these nonprofits have what they need to succeed.
Supporting nonprofits that reflect the diversity of the communities they serve leads to more innovative and culturally responsive solutions. When nonprofits are well-resourced, they can implement programs that address the root causes of inequality and drive long-term change. As a result, building community capacity becomes a powerful tool in solving some of the most pressing societal challenges.
The role of DEI in philanthropy
Incorporating diversity, equity, and inclusion into your grantmaking is not only a moral imperative but also the most effective way to create lasting societal change. By adopting trust-based philanthropy, diversifying your portfolio, and investing in nonprofit capacity building, grantmakers can support organizations that are driving innovation and creating more equitable communities.
If you're ready to take the next step in your philanthropic journey and explore how capacity building can strengthen your grantmaking strategy, consider Catchafire. Request a demo today to learn more about how we can scale your grantmaking investment and increase your community reach.
Together, we can work toward building stronger, more resilient communities that reflect the diversity of the world we live in.
