Temporary Funding Surges for Black-Led Nonprofits Post-2020: What Grant Seekers Need to Know

Hook: One-Time Windfalls, Lasting Challenges

Amid America’s 2020 racial reckoning, philanthropic and corporate donors pledged to invest in Black-led nonprofits. Many anticipated a new era of support for historically underfunded organizations. Yet, as revealed in a new study from Candid and ABFE, these financial infusions proved short-lived for most—especially for smaller Black-led groups, whose funding either barely increased or reverted to pre-2020 levels by 2022-2023.

With the nation’s attention turning elsewhere and donors shifting priorities, Black-led nonprofits now face rising community need but shrinking support, forced to navigate a funding landscape that still offers too few pathways to sustainability.

Context: The Promise and Limits of the 2020 Philanthropic Response

Following the murder of George Floyd in May 2020, major donors and corporations scrambled to demonstrate their commitment to racial justice. Money flowed toward Black-led groups at unprecedented pace; for some, the summer was marked by dozens of new contributions and optimism about fresh relationships with funders (AP News).

But, as Candid and ABFE’s May 2024 report shows, that surge was fleeting. Only a subset of larger Black-led nonprofits experienced significant temporary gains. For small organizations—those with less than $1 million in annual expenses—statistical analysis found little to no bump. Instead, they became reliant on first-time funders, without the enduring foundation of ongoing donor relationships that sustain their work through lean years.

This instability has compounded structural inequities. Founders and CEOs quoted in the report describe the post-2020 period as a whirlwind: rapid hiring to meet new opportunities, followed by difficult layoffs when trend-driven donations abruptly stopped. In the background, traditional barriers linger—disproportionate reporting requirements, week-to-week financial juggling, and difficulty gaining visibility in highly networked philanthropic circles.

The current pattern echoes a persistent problem: philanthropy’s historic distance from Black communities makes reactive, one-off gifts the norm, rather than deep, trust-based support with general operating or multi-year grants.

Impact: What This Means for Grant Seekers

For Black-led nonprofits—especially those operating on smaller budgets—the report’s findings underscore the importance of adapting fundraising strategies. The data show:

• Continuing Funders vs. First-Timers: Over two-thirds of recent support came from first-time funders, with less than one-third from returning allies. In contrast, more established, white- or non-Black-led groups are often stabilized by long-term funder relationships.
• General Operating Support Scarcity: Only one-third of Black-led nonprofits received unrestricted grants, versus about half for others. This limits organizational flexibility and ability to weather funding gaps.
• Burdensome Grant Requirements: Many funders require frequent updates, detailed reports, or new application processes for each cycle, straining limited staff capacity.

For grassroots leaders, the experience described is “doing more with less”—even as demand for services soars due to rising costs of health care and food.

Nonprofits in all sectors should recognize: The heightened attention and funding from racial justice pledges was ephemeral. Those counting on repeat support from 2020 and 2021 surge donors are likely seeing little carryover. Corporate and philanthropic agendas shift quickly, and without foundational relationships, nonprofits risk being left out in the cold as priorities change.

Action: Steps Grant Seekers Should Take Now

1. Prioritize Relationship Building

Move beyond campaign-driven or "first date" fundraising. Proactively seek opportunities for deeper engagement with funders—through regular updates, storytelling, and invitation for site visits or conversations. Focus on cultivating a handful of champions over time, rather than maximizing one-off gifts.

2. Diversify Funding Mix

Pursue a blend of private, corporate, and public grants. City, state, and federal funding opportunities—like Chicago’s recent $2.5 million in community violence grants mentioned in the report—can offer more sustained support. Explore multi-year government grants, which often carry more stability than private pledges.

3. Advocate for Trust-Based Practices

Push funders to adopt multi-year, unrestricted grantmaking and reduced reporting burdens. Share your experience openly with grant officers; reference sector-wide calls for trust-based philanthropy highlighted by ABFE, Candid, and sector allies.

4. Leverage Networks and Collaboration

Smaller nonprofits may lack national reach. Team up with local coalitions or collectives when applying for large grants, increasing visibility and leveraging combined capacity to attract committed institutional partners.

Outlook: Watching for the Sector’s Next Moves

Though the initial outpouring of support post-2020 has faded, the conversation about equity and sustainability in grantmaking continues. Stay alert for:

• Shifts in Foundation Guidelines: Many large funders are actively reviewing their post-2020 commitments and strategic plans in 2024.
• Emerging Trust-Based Funding Models: Monitor calls for proposals that offer general support, multi-year grants, or learning opportunities through philanthropic affinity groups.
• Opportunities in Public Funding: Federal and city programs may expand as private gifts ebb, especially for organizations delivering crucial services amid economic instability.

The push for true equity in funding Black-led nonprofits isn’t over—but it demands deliberate, relationship-driven persistence from both funders and grantees.

Granted AI helps nonprofits and grant seekers navigate and strategize for a rapidly evolving funding landscape, supporting efforts to build sustainable funding beyond fleeting trends.