Bridging The Capital Gap For Black, Indigenous, & Latino/a/x Social Entrepreneurs
New Profit Launches Inclusive Impact Initiative Targeting Capital Gaps and other Barriers for Black, Indigenous, and Latino/a/x Social Entrepreneurs and LeadersFebruary 24, 2020
Initiative Informed by New Research Study Commissioned by New Profit that Highlights Inequitable Funding and Underrepresentation of Leaders of Color in the Social Sector
February 24, 2020 (NATIONAL) – At the Inclusive Impact Action Summit, a major gathering of social entrepreneurs, philanthropists, and other leaders starting today in Washington, D.C., the pioneering venture philanthropy organization New Profit will launch a new effort to increase equity in the social sector so that the most promising ideas to create social and economic mobility can flourish. The new initiative, called Inclusive Impact, is designed to drive unprecedented capital and support to some of our nation’s most promising innovators—Black, Indigenous, and Latino/a/x social entrepreneurs. These entrepreneurs often have close proximity to the communities the sector seeks to serve and understand the multi-dimensional root causes of social issues, but receive only a fraction of philanthropy’s resources aimed at solving them.
“The real promise of philanthropy resides beyond our reach because we fail to value and trust the expertise of those most proximate to the communities we seek to support and the problems we need to solve,” said Tulaine Montgomery, a New Profit Managing Partner who leads the Inclusive Impact initiative. “Closing the capital gap for social entrepreneurs of color and valuing their insights is something that philanthropy can do in the short term, and doing so is required for transformative change to happen in this country.”
At the event, New Profit will unveil a new research study, Transforming the Social Sector: The Opportunity and the Need for Action, that informed the creation of the Inclusive Impact initiative. The research, compiled in partnership with the mission-driven advisory firm Next Street, showed stark leadership and funding inequities in the social sector. Despite making up 30% of the population, Black, Indigenous, and Latino/a/x leaders hold only 10% of nonprofit executive leadership roles and 6% of foundation executive leadership roles. Organizations led by Black, Indigenous, and Latino/a/x leaders receive only an estimated 4% of total grants and contributions in the sector today, and that funding is largely small-dollar, short-term, and restricted, leaving these leaders with little room to innovate and grow.
The full paper outlines the interconnected barriers and biases that perpetuate these inequities and offers a four-point action plan for addressing them that forms the backbone of New Profit’s Inclusive Impact initiative:
- Significantly increase unrestricted, multi-year philanthropic investment capital and capacity building support for nonprofits led by Black, Indigenous, and Latino/a/x leaders. The resource flow must be equitable, flexible, and sufficient to fund nonprofits’ operational needs, and allow them to experiment and invest in growth opportunities.
- Build leadership in the philanthropic sector that is more representative of, and proximate to, the beneficiary populations the sector serves, and sufficiently diverse to ensure a wide range of ideas and solutions are surfaced.
- Commit to building diversity, equity, and inclusion capacity in the social sector and creating organizational environments that are inclusive and supportive of Black, Indigenous, and Latino/a/x leaders, enabling them to thrive.
- Launch comprehensive and consistent efforts around demographic data collection and analysis throughout the social sector in order to understand the current state of diversity in the sector and identify the effectiveness of interventions aimed at improving diversity, equity, and inclusion capacity.
We are beginning this first phase of this multi-year effort with a focus on Black, Indigenous, and Latino/a/x leaders. We recognize and respect that all leaders of color face barriers when seeking to raise resources needed to build and sustain their organizations and look forward to leveraging our learnings from this initial phase to expand our scope and reach in the future.
“It is a national imperative to capitalize and support Black, Indigenous, and Latino/a/x social entrepreneurs,” said Charisse Conanan Johnson, CFA, a partner at Next Street. “By taking action now, we not only drive systemic change, but seize massive opportunity. I commend New Profit for its leadership in developing such a transformative, unapologetic, and bold vision.”
The Inclusive Impact Action Summit is being held with generous support from: The Chan Zuckerberg Initiative DAF, Silicon Valley Community Foundation; Deloitte Consulting LLP; Ewing Marion Kauffman Foundation; The Bromley Charitable Trust; The McCance Foundation; and the New Profit Board of Directors.
The real promise of philanthropy resides beyond our reach because we fail to value and trust the expertise of those most proximate to the communities we seek to support and the problems we need to solve