The $90 Billion Promise That Vanished: What New Research Reveals About Funding for Black-Led Nonprofits — and What to Do About It

In the summer of 2020, Asiaha Butler's phone wouldn't stop ringing. Her organization, the Resident Association of Greater Englewood in Chicago, gained more than two dozen new funders in a matter of weeks. Foundations that had never heard of Englewood — a South Side neighborhood with a median household income under $25,000 — suddenly wanted to write checks. "All of a sudden, we were desirable for people to fund," Butler told the Associated Press.

Six years later, the research confirms what Butler already knew from her bank statements: it didn't last.

A study released today by Candid and ABFE (the Association of Black Foundation Executives) examined funding patterns for Black-led nonprofits between 2020 and 2022. The findings are blunt. Large Black-led nonprofits — those with annual budgets over $1 million — saw temporary funding increases that peaked in 2021 and reversed by 2022. Small Black-led nonprofits, the community organizations that do most of the ground-level work in underserved neighborhoods, saw no statistically significant funding changes at all.

The study lands at a particularly brutal moment. Black-led nonprofits are being asked to absorb rising demand for social services — food assistance, housing support, violence intervention, voter access — while federal funding freezes threaten existing grants and the administration's anti-DEI executive orders have chilled corporate and foundation giving for anything explicitly tied to racial equity.

What the Data Actually Shows

The Candid/ABFE analysis cuts through the narrative that 2020's racial reckoning transformed philanthropic funding. The numbers tell a more precise and more damaging story.

Funding concentration, not distribution. The temporary increases that did occur flowed overwhelmingly to organizations that were already large and already visible. Smaller organizations — the ones most embedded in the communities most affected by racial inequity — received little to nothing. The research found that small Black-led nonprofits received just over one-third of their funding from continuing supporters, meaning the majority came from first-time donors who had no prior relationship with the organization and, in most cases, didn't return.

General operating support remained elusive. Only one-third of Black-led nonprofits received general operating support — unrestricted funding they could deploy based on their own assessment of community needs. More than half of comparable non-Black-led organizations received this type of support. This gap matters enormously because general operating funding is what allows organizations to hire staff, invest in infrastructure, and build capacity. Restricted project grants create activity but not organizational strength.

Reliance on new funders created fragility. Cathleen Clerkin, a researcher at Candid, described the pattern succinctly: Black-led nonprofits are "just constantly going on first dates with new funders." When most of your revenue comes from organizations that funded you once, in response to a news cycle, and may not fund you again, every budget cycle is an existential question.

The timeline of decline. Funding increases that appeared in 2020-2021 reversed by 2022 — before the current administration's anti-DEI policies accelerated the retreat. The withdrawal was already happening before it became politically convenient.

Why It Happened: Structural Failures, Not Individual Malice

The temptation is to frame this as broken promises — corporations and foundations that pledged billions and didn't follow through. That's part of the story, but the structural explanation is more useful for organizations trying to build sustainable funding.

Foundations lacked established networks with Black-led organizations. When major funders decided in June 2020 that they needed to support racial justice, most didn't have existing relationships with community-based organizations doing that work. They went to intermediaries, funded established civil rights organizations, and wrote checks to historically Black colleges and universities — institutions they already knew. "They didn't really take time to get to know people," said Kandee Lewis, CEO of the Positive Results Center in Los Angeles, which serves domestic violence survivors.

Trend-based philanthropy doesn't build capacity. The 2020 funding spike followed the same pattern as previous waves of cause-driven giving: a galvanizing event triggers public attention, foundations respond to board pressure and donor expectations, money flows quickly, and when attention moves to the next crisis, the money follows. "It was just a very transactional gift at best," said Kia Croom, a fundraising professional who works with Black-led organizations.

Application and reporting burden falls hardest on small organizations. Foundation grants come with compliance requirements — narrative reports, financial audits, outcomes data, site visits. For a 50-person organization with a development staff of two, managing reporting for 24 new funders simultaneously is itself a full-time job. Several organizations in the study described the 2020 funding surge as a curse: the administrative burden of managing one-time grants consumed capacity that should have been spent serving communities.

The "rooms" problem persists. Jaleesa Hall, founder of the Raising A Village Foundation in Washington, D.C., identified a structural barrier that no amount of pledging can solve: "Small, Black-led nonprofits simply aren't in those rooms to begin with." Major funding decisions happen through networks — conference connections, program officer relationships, trustee introductions — that most community organizations never access. Being on a foundation's radar requires the kind of visibility that itself requires resources most small organizations don't have.

The Current Threat Multiplier

The Candid/ABFE findings describe a problem that existed before 2025. The current political environment is making it worse through three reinforcing dynamics.

Federal funding uncertainty. The administration's broad approach to restructuring federal agencies has frozen or threatened grants across health, education, and social services. For organizations that shifted from private to public funding sources after 2020's philanthropy dried up — as Butler's Englewood organization did, securing $2.5 million from the City of Chicago and $1.5 million pending from the state — the federal funding freeze creates a second cliff.

Anti-DEI executive orders. Executive actions targeting diversity, equity, and inclusion initiatives have created a chilling effect on corporate and foundation giving explicitly tied to racial equity. Cliff Albright, co-founder of Black Voters Matter, described the compound effect: "We're literally being asked to do more with less resources." Even foundations that haven't changed their grantmaking criteria report that grantees are self-censoring — avoiding racial equity language in proposals and public communications to reduce political risk.

Rising service demand. The communities served by Black-led nonprofits are simultaneously experiencing increased need. Food insecurity, housing instability, and health disparities don't pause for funding cycles. Organizations are cutting programs and staff while the people they serve need more help, not less.

What Actually Works: Building Durable Funding for Black-Led Organizations

The Candid/ABFE data contains implicit guidance for organizations seeking to build funding that survives news cycles and political shifts. The strategies that work aren't the ones that are easiest.

Prioritize multi-year commitments over large single gifts. A foundation that commits $50,000 per year for five years is worth more than one that writes a $200,000 check once. Multi-year commitments create predictable revenue that allows organizations to plan, hire, and invest in infrastructure. When approaching funders, explicitly request multi-year agreements and frame the ask around organizational capacity, not project deliverables.

Build relationships before you need money. The organizations that maintained funding after 2020 were disproportionately those with pre-existing funder relationships. For organizations without those networks, the path forward is investing time in relationship-building during stable periods — attending funder briefings, participating in affinity groups, joining intermediary networks — rather than waiting for the next crisis-driven funding wave.

Pursue general operating support aggressively. The research shows Black-led nonprofits receive general operating support at roughly half the rate of comparable organizations. This isn't because funders don't offer it — many explicitly do, particularly community foundations and trust-based philanthropy practitioners. Organizations should identify funders that make unrestricted grants, tailor applications to those programs, and make the case for general operating support explicitly rather than defaulting to project-based proposals because that's what they think funders want to hear.

Diversify across funding types. Butler's trajectory — from private philanthropy in 2020 to municipal and state government funding by 2025 — illustrates both the fragility of single-source dependence and the path toward stability. Organizations that combine foundation grants, government contracts, individual giving, earned revenue, and corporate partnerships can survive the failure of any single channel.

Use intermediaries strategically. Organizations like the National Black United Fund, the Association of Black Foundation Executives, and regional Black-led giving circles can provide access to funder networks that individual organizations can't reach alone. Intermediaries also aggregate smaller organizations into funding portfolios that meet institutional funders' minimum grant thresholds.

Document outcomes relentlessly. In a funding environment where every grant is contested, organizations with strong outcomes data — not just activity metrics but measurable community impact — hold a structural advantage. Invest in evaluation capacity even when it feels like resources should go directly to programs. The data you collect this year determines the grants you win next year.

What Funders Should Hear

The Candid/ABFE research is addressed primarily to foundations, and its recommendations are worth restating. Foundations that want their racial equity commitments to mean something need to shift from responsive grantmaking (writing checks when events demand it) to proactive grantmaking (building sustained relationships with community organizations before crises make those relationships urgent).

Trust-based philanthropy — multi-year general operating support with minimal reporting burden — is the evidence-based model for supporting small organizations effectively. Every additional compliance requirement disproportionately burdens the organizations with the least capacity to absorb it.

But Black-led organizations can't wait for philanthropy to reform itself. The organizations that will survive and grow in this environment are the ones building diversified funding bases, investing in their own data infrastructure, and treating funder relationships as long-term assets rather than transactional necessities — and tools like Granted can help identify the specific foundation, federal, and state opportunities that match your organization's mission before the next funding cycle closes.