The blog of the Urban Institute
June 22, 2021

To Advance Racial Health Equity, Fund Organizations Led by and for People of Color

June 22, 2021

The murder of George Floyd and resulting racial justice movement forced many people and organizations to confront the inequities baked into their everyday lives and business practices. The COVID-19 pandemic’s disproportionate effects on the health outcomes of people of color because of deeply embedded structural racism only added urgency to identifying health solutions by and for communities of color.

Private and public health funders are now acknowledging what people of color have long known: funders rarely provide grants to organizations led by people of color or from other marginalized communities.

For decades, funders have argued they did not know of effective organizations led by people of color, and though these organizations lacked the infrastructure to demonstrate progress with grant funding, funders seldom supported infrastructure development. On top of this, communities of color are less likely to trust the health system because of the historic exploitation of Black people in medical research and racism embedded in the health care system.

Finally, many public and private health funders have recognized that to help achieve health equity, they must build authentic community partnerships and fund organizations led and trusted by the groups they seek to serve. Private funders, such as the Borealis Philanthropy, which practices this partnership-based approach, have doubled down on their grantmaking strategies and have invited new funders to learn how to best support community-led grassroot, service, and advocacy organizations. But similar changes are still needed within federal and state grantmaking and even reimbursement programs.

Federal and state grants are more complex than foundation grants, and often small organizations led by people of color lack the infrastructure and capacity to apply and meet the grants’ terms and conditions. Federal proposal requests usually require rapid turnarounds, substantial time commitments, and a development team to apply and win funding. And onerous paperwork and reporting requirements often exclude smaller programs without a data collection infrastructure.

As a result, the same large organizations receive funding time and time again. Sometimes these organizations subgrant to smaller ones, but subgrants come with disparate power and funding dynamics, that reinforce the same disparities they intend to address. I saw this during the COVID-19 pandemic, when communities urgently needed money. Many friends and colleagues at small organizations led by people of color reported being unable to tap larger funding and were using glue and tissue paper to ensure their clients received the best and safest care possible, often at the expense of their organization’s solvency and their community’s health and well-being.

The federal government recently released a request for information asking for “Methods and Leading Practices for Advancing Equity and Support for Underserved Communities through Government,” showing it recognizes the need to reverse current trends. In fact, some government entities have had some success, as demonstrated by an Urban Institute–led evaluation of African American History and Culture Grants.

However, such efforts have been limited. Reimagining grantmaking infrastructure so small organizations led by people of color have equitable access to grants is just one way the government—both at the federal and state levels—could advance this goal. Here are four changes they could consider.

  1. Develop new request for proposal and grant guidelines: To reach a more diverse set of grantees, grant applications should be manageable without a multimillion-dollar development office; they should be easy to fill out and accepted online or in the mail.
  2. Develop new grant management strategies: Once awarded, grant reports should fund the collection and inclusion of outcomes relevant to both communities and governments. Reporting requirements need to be achievable for small, effective organizations. Finally, there must be a clear understanding and guidelines for when and why grants may be terminated.
  3. Develop and support smaller organizational infrastructure: Governments could bid contracts to support fiscal sponsorship organizations that understand their community’s needs and can support infrastructure development for smaller organizations that provide culturally and linguistically effective, equity-oriented health care. (The Tides Foundation, which offers organizational support so leaders can focus on the day-to-day work, is an example.) These local fiscal sponsors can help small, effective organizations access financing while helping them build organizational capacity—not every organization needs or wants to become a 501(c)(3).
  4. Develop evaluation and impact assessment strategies: Grants could include the ability for all organizations, including smaller, less-resourced ones, to evaluate their impact. Ideally, grants should include resources to help build evaluation capacity and fund data collection and analysis. Organizations led by and for communities of color are often less resourced because of historical wealth development and funding patterns. Government, partnered with private foundations, could fund technical assistance and staff to help organizations develop the IT and infrastructure to collect, analyze, and act on any disparities or inequities identified using disaggregated data. This would allow projects to assess impact and outcomes and evaluate whether they are achieving equitable outcomes. It could also help organizations secure funding from other private and public entities, which could lead to greater scale, impact, and sustainability.

These four changes are the beginning of a government and community-partnered strategy to engage organizations that historically have been excluded from major funding streams but that have continued working with and for their communities. These suggestions do not preclude funding larger organizations but would allow funding to cover more diverse people and organizations.

Public grants, at times in partnership with private philanthropic funding, are disbursed to improve many health and social outcomes and can help society be better prepared for the next crisis. Proactively funding small organizations led by people of color that serve marginalized groups is an important place to start.

LWA/Dann Tardif for Getty Images

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