Diversity, equity, and inclusion (DEI) has been a thread through philanthropy for decades—arguably more than a century—the racial reckoning of 2020 brought urgency to how philanthropic organizations were addressing it, both internally and externally, through grantmaking.

Philanthropic support for movements championing principles of DEI dates back centuries to efforts including the abolitionist, suffrage, and civil rights movements. In theory, philanthropy has long been perfectly positioned to back such movements because it could support seemingly unpopular causes without facing backlash from voters or shareholders the way a corporation or politician might. But expressing support for racial equity and justice, diversity, and inclusion has proven to be different from reflecting them in organizational practices. Indeed, supporting racial equity has not always historically included funding leaders and organizations from marginalized communities.

As philanthropy has become more effective in bringing power and voice to the voiceless, the oppressed, and the minority, there has been a call for the sector—which, according to Candid data, encompasses 1.8 million nonprofits registered with the Internal Revenue Service—to practice what it preaches, and reflect the communities it serves. According to Change Philanthropy’s 2022 Diversity among Philanthropic Professionals Report (96 pages, PDF), 43 percent of the sector’s professionals identify as people of color, 70 percent identify as female, and 23.1 percent identify as people with disabilities.

Internal DEI and DEI in grantmaking

A literature scan of the field suggests that DEI can be split into two focus areas: internal DEI practices within organizations that affect staff and board members, and external DEI practices centered on grantmaking. Philanthropic leaders suggest that a combination of the two, rather than a focus on just one, is vital to progress.

Since the spring of 2020, many grantmaking organizations have reexamined their DEI practices across the board, especially those that did not traditionally fund racial justice. While acknowledging those efforts, many leaders in the space noted that the commitments must also be a consistent piece of an organization’s mission.

“DEI cannot be an initiative or a phase or a point-in-time commitment—it has to be an enduring commitment that becomes part of the fabric of an institution,” said Council on Foundations (COF) president Kathleen P. Enright. “The internal and the external must both be there, they have to be aligned, and that’ll show up in a different way, depending on what the organization is focused on, where it’s located, all of those sorts of things. There is no prescriptive one-size-fits-all approach there.”

COF has been a participant and guide in DEI work for decades, threading it into its overall mission to “foster an environment where philanthropy can thrive and cultivate a community of diverse and skilled philanthropic professionals and organizations who lead with integrity, serve as ethical stewards and advocate for progress.” Through resources like the annual Grantmaker Salary and Benefits Report and programs aimed at weaving DEI into human resources practices and organizational policies, COF serves as a bridge for grantmakers throughout their DEI journey.

“I think the first thing we have to do is get shame out of the equation. One of the things [COF] is trying to do is create space for learning and growth and deeper understanding for folks who are interested but earlier in their journey. We don’t want that to be a barrier,” Enright explained. “We’re also hoping to understand the nuance of language and what language and strategies work, where, and for whom. In my view, this all has to be a ‘both/and’; it can’t be an ‘either/or.’ We need to embrace folks who are attempting to do the work from their seat in the context where they are.”

In the wake of the 2020 protests after the murder of George Floyd, the Bill &Melinda Gates Foundation was one of the largest grantmakers to issue a statement committing itself to internal DEI work. While the foundation had begun to create a strategic framework around DEI in 2019 with the hiring of Leslie Mays as chief diversity, equity, and inclusion officer to steer the work, the official framework was launched in 2021, informed by the disparities of the pandemic and the racial reckoning of 2020. The foundation is nearing the end of its initial three-year evaluation period for the framework and has published two progress reports. As one of the world’s largest private foundations, Mays explained that beginning and implementing a strategic framework takes time and implementation varies across offices, but thus far the foundation has seen a positive response from staff.

“The progress is what we expected—largely positive but still mixed—and it’s important to recognize that we are still very early on in this endeavor and can do better,” she said. “Our data collection methods are good, but we need to refine how we collect data from our regional and country offices, especially since the context and definitions of diversity, equity, and inclusion in the U.S. are not the same as in China, India, or for our offices throughout Africa. In a similar vein, employees have also asked that we consider different ways of ‘reporting’ so as to generate real-time updates on DEI work throughout the foundation—which not only impacts how we see and understand ‘progress’ but also our sense of community and shared endeavor. These are priorities we’re addressing now that will reflect in our future reporting.”

For philanthropies like the Ford Foundation, which has long worked to advance social justice, before 2020 its grantmaking was focused on uplifting marginalized communities and supporting nonprofits that both represented and supported those communities. The foundation recently celebrated a decade of sustained commitment to DEI internally, championing a core piece of its mission to nurture an inclusive culture in order to more effectively advance social justice through its grantmaking.

“Our stance has always been that in order to make progress in this work, we have to be transparent,” said Ford Foundation vice president and chief people officer Diane Samuels. “Being transparent is a way of sharing what we’re learning, what we’re doing, but it’s also a way to hold ourselves accountable.”

In 2016, the Ford Foundation sponsored the first annual survey of the largest U.S. foundations to use as comparative DEI data, and in 2020 began publishing its own annual internal DEI reports. Samuels noted that some organizations feel trepidation in publishing such information, but for the Ford Foundation—much like for the Gates Foundation—the pressure and transparency was not only helpful in reaching each new goal, but necessary.

“The goal behind that sharing is so that we can all learn and grow. That’s the point of this work. The point is not to share the numbers. The point is not just to share the journey, but in sharing the journey, our individual journeys, and our organizational journey, we learn and grow,” said Samuels. “If you’re authentic in doing this work, it’s actually okay to share and even to misstep and to go back and learn from that so that you can move forward with improving on what you’ve done.”

Moving each element forward

Samuels and COF’s Enright highlighted an often-overlooked aspect of DEI work: Not all three components progress in unison. Enright explained that the philanthropic sector has seen great progress in terms of diversity. “Funding for racial equity jumped to $4.2 billion [in 2020] when the total funding that was categorized in that way from 2012 through 2019 was only $3.3 billion, so that is a substantial financial commitment that was expanded—our 2023 Grantmaker Salary Benefits Report also shows diversity jumps in that time,” said Enright.

While part of that success is due to increased and expanded reporting methods on diversity, equity and inclusion can be harder to quantify. “If we aren’t disaggregating data by race, if we aren’t looking at whether women or people of color are staying shorter tenures or being paid less than their white peers, then we don’t know whether we’re making progress. So of course, the data matters enormously, but it’s also not enough.” Samuels emphasized that one often hinges on the other, and a sole focus on diverse recruiting or staff numbers can be ineffectual if the internal culture is not equitable and inclusive enough to retain such employees.

Internal organizational surveys have become a popular way for grantmakers and public charities to measure DEI progress, and while retention and tenure data can be helpful in quantifying how equitable and inclusive an organization’s culture is, the surveys, especially when done anonymously or through a third party, can provide staff an opportunity to give qualitative feedback. Part of what the Ford Foundation is doing to address the equity and inclusion portion of its DEI plan is using an internal survey as a soundboard for staff. In its 10-year DEI report, the battle between “equity and elitism” was listed as a hurdle for the foundation to achieve some internal DEI goals. Samuels and Ford Foundation director of organizational effectiveness and excellence Rebecca Mattis-Pinard explained that the feedback was a valuable piece to understand how the perception of philanthropy’s ties to wealth and privilege continue to exist and, in turn, who was and was not welcome in the philanthropic space.

The Ford Foundation seeks ways to incorporate the feedback into practice each year, Samuels said. “A few years ago, coming out of one of those surveys, we got feedback from a group of staff about their experience in the organization and wanting to have more career development support—and this happened to be coming from our people of color—women of color—staff members,” said Samuels. “Hearing that feedback, we developed a program called Limitless Potential, which provides one-on-one coaching, group sessions and helps individuals to build out their advisory network.”

The racial reckoning of 2020 and a focus on leaders of color

The year 2020 was a turning point for the sector, not only because organizations had to learn to adapt to new ways of working and funding during the pandemic, but because the pandemic highlighted the stark and dangerous disparities Black Americans and other marginalized groups faced. The murder of George Floyd ignited a long-due racial reckoning across the country and a demand for change across industries and sectors, including philanthropy.

The murder of George Floyd happened to follow the release of Echoing Green and The Bridgespan Group’s Racial Equity and Philanthropy: Disparities in Funding for Leaders of Color Leave Impact on the Table (19 pages, PDF), which called for increased funding of leaders of color in order to achieve meaningful social change. “Funding leaders of color is a significant piece of this puzzle, because these leaders often bring strategies that intimately understand the racialized experiences of communities of color and the issues these communities face. Unfortunately by and large that is not happening today,” the authors wrote in an article about the report. At its core, the report urged the philanthropic community to go beyond internal DEI practices and incorporate a racial equity lens to all philanthropic giving, namely, by funding organizations and leaders of color. The report’s timing just before the protests for racial justice sent ripples through the philanthropic community.

“We were completely overwhelmed by the response and found ourselves in this rapid response mode," said Echoing Green vice president of thought leadership Liza Mueller. “We were guiding other organizations in the way that they metabolize the findings.”

The original intention behind the report, Mueller explained, was a collaboration with The Bridgespan Group to make explicit the implicit racial equity work that Echoing Green had been doing and the research data it had been collecting and disseminating on a smaller scale. “We were very quick to volunteer to be more than a contributor, but a collaborator and a partner, because we had been trying to illuminate these disparities through our research and through Cheryl [Dorsey] talking about the issue on our own for several years, but we had not had the capacity for the deeper research or the platform that Bridgespan had to garner the urgent attention to the issue that we felt like it warranted,” she said.

Echoing Green calls itself a “people first” organization, and its fellowship program lifts up leaders focused on addressing issues that advance equity, including education, climate justice, human rights, and health. These “proximate leaders” were often people of color, Mueller pointed out, highlighting how the organization had always implicitly centered racial equity. “Prior to 2020, we had prioritized and centered racial equity in our work by modeling inclusive philanthropic behavior,” she said. “We were doing participatory grantmaking; we were doing an open-call application. We were being very transparent about our process, trying to shift power to applicants in the way that we led them through our selection.”

Following the publication of the report, Echoing Green took another explicit action and launched its Racial Equity Philanthropic Fund. The three-year fund operates with three goals: to launch and scale 500 social enterprises, improve social innovation on-ramps for 5,000 emerging leaders, and engage 10,000 corporate employees. Mueller said she has noticed, more than halfway through the fund’s 2021-24 timeframe, a pent-up demand for capital that doesn’t diminish when the social enterprises leave Echoing Green’s fellowship programs. She saw similar demand among corporations through the fund’s corporate employee initiative. “I think a lot of corporations were seeking support in advancing DEI initiatives,” said Mueller.

While progress can be seen across the sector, the question of whether it can be sustained looms. In its 2021 report Mismatched: Philanthropy’s Response to the Call for Racial Justice (10 pages, PDF), the Philanthropic Initiative for Racial Equity, in collaboration with Candid, highlighted how funding for racial equity and justice remains a small portion of overall foundation funding, with only six cents of every grant dollar devoted to racial equity and only one cent toward racial justice. The report also found that the top 20 funders of racial justice work accounted for 60 percent of all racial justice funding. “In the context of thousands of funders that support racial justice, the work is reliant on a small group of funders for a large portion of funding. Overreliance on a small number of funders makes groups vulnerable to having their work derailed by changing foundation interests,” the report’s executive summary noted.

While dozens of organizations, corporations, and individuals made public pledges in support of racial equity, Mueller pointed out the trouble with tracking and sustaining them. “We see fewer and fewer corporations and philanthropic institutions making new commitments to fund racial equity and justice initiatives,” said Mueller. “There is a lack of conversation and reporting out on what’s being done with the commitments that have been made.”

Using demographic data to leverage change

Inspired by Echoing Green’s 2020 report and other data as well as nationwide calls for racial justice, many grantmakers began to seek out ways to change and track their giving.

“What we’ve seen at Candid is that there’s been a huge increase in requests from foundations for demographic data from their grantees or potential grantees, especially in the wake of George Floyd’s murder in 2020,” said Candid vice president of influence Aleda Gagarin.

Candid has launched a coordinated effort called Demographics via Candid to make nonprofit demographic information as easily and publicly accessible as possible through existing Candid profiles. “Funding, both from foundations, corporate social responsibility programs, and the demographic data that we are collecting at Candid ideally will help the sector baseline that demographic data and track if the sector is actually making good on those promises and pledges to fund more equitably,” Gagarin explained.

Candid’s goal is to have one place and way for organizations in the sector to share and view demographic data, lifting the burden of filling out several surveys, and allowing nonprofits to compare standardized data across the sector. Still in its early stages, the crux of the Demographics via Candid campaign relies on behavioral change in the philanthropic sector, just as meaningful progress and the centering of DEI in philanthropy does. “Demographics via Candid is aimed at systems change in a sector that is, quite frankly, often slow to move, and there’s not a lot of resources to push them beyond what they are working for,” said Gagarin. “Just getting foundations to say, we know you want X, Y, and Z, but the vast majority of what’s important is sitting within A, B, C, and D and it is more effective for the sector if you all agree to participate in this way.”

With more than 100 partners, including Echoing Green and COF, Candid is hopeful that progress is on the horizon. Much like internal DEI efforts, thought and behavior change in a sector that is still unlearning harmful practices and working to center the voices of marginalized communities, seldom happens in unison.

While sweeping change doesn’t happen overnight, philanthropic professionals have highlighted increased momentum since 2020 and a cautious optimism that the sector is headed in the right direction. Between expanded data collection methods and tools and the adoption of trust-based philanthropy, the sector is using the tools at its disposal to effect meaningful change. Holding out hope that the progress made in the sector is sustainable, Mueller emphasized the need for philanthropy to redefine its relationship to risk.

“Is it riskier to invest in an organization doing work that doesn’t look like what you’ve seen done before? Or is it riskier to potentially leave that impact on the table if you’re not investing in a new way of solving what is seemingly an intractable problem that previous solutions have not moved the needle on?” said Mueller. “I have a lot of hope for the sustainability of some of these initiatives. The fact that people are talking about it is progress, and I have a lot of hope for seeing that sustained.”

Samantha Mercado is staff writer at Philanthropy News Digest.

(Photo credit: Getty Images/AzmanL)