How a 75-Year-Old Foundation Dramatically Increased Funding for Groups Led by People of Color/
In 2019, Public Welfare Foundation announced two major changes to the way it planned to do business. One of them was the kind of thing that nonprofits see every day: PWF had decided to narrow the focus of its grantmaking to youth and adult criminal justice reform.
The second shift, however, was more noteworthy. The nearly 75-year-old funder, with more than $500 million in net assets at the time, announced a plan to move the vast majority of its grantmaking resources to Black- and people-of-color-led nonprofits. It was a rare move, even for a foundation working on issues that overwhelmingly impact communities of color.
Three years later, PWF’s results can serve as a lesson to any funder struggling with equitable grantmaking practices. In roughly three years, the foundation, which is based in Washington, D.C., flipped the proportion of the money it moves to white-led groups versus those helmed by Black and other people of color. During its 2022 fiscal year, a full 50% of the foundation’s program funding went to Black-led nonprofits, while organizations led by people of color overall received 72% of all Public Welfare Foundation grants.
These numbers mark a reversal from 2017, the first year for which PWF has published demographic data about its grantmaking. During that fiscal year, white-led groups received 65% of all grants, while Black-led nonprofits and POC-led organizations together received 34%. Even in 2019, when the change was announced, nearly half of PWF’s grantees were white-led nonprofits, while the funder moved 23% of its grantmaking to Black-led groups and 53% to Black-led and POC-led nonprofits overall.
How did Public Welfare Foundation find so many BIPOC-led organizations to support? After all, many in the field point to a limited pipeline when seeking to diversify their grantmaking and staffing alike.
The answer is pretty simple, and within the means of any foundation: It asked. In other words, the foundation made a concerted effort to leverage its existing contacts in the criminal justice reform field, nonprofits and peer funders alike, to find effective Black and POC-led organizations working in the eight jurisdictions where PWF operates.
“As you network more deeply with people on the ground, you meet new people, and they offer you additional holes and blind spots you aren’t able to see from the 30,000-feet perch,” said Public Welfare Foundation President and CEO Candice C. Jones.
To open its processes further, the foundation began accepting LOIs a few years ago. The majority of its funding is still done by invitation, Jones said, but restricting grantmaking to invitation-only limits the “universe of possibilities” to nonprofits that the foundation either already knows about or is able to find through its network. Last year, PWF awarded grants for 21 of the proposals it received through the LOI process, nearly doubling the number of grants it awarded via LOIs in 2021.
“The lesson is that the organizations are out there,” Jones said. “So often, philanthropy will say, ‘We aren’t funding people-of-color-led organizations because they don’t exist; there’s no scale.’ I hope our experience at Public Welfare Foundation underscores the fact that Black-led and people of color-led organizations are out there, and they are leading effective and transformative work.”
Disrupting some legacies, continuing others
When newspaper entrepreneur Charles Edward Marsh started the foundation that eventually merged with Public Welfare Foundation in 1947, he probably would not have foreseen PWF’s evolution into the highly diverse, Black-led foundation that it is today. Even so, some of the priorities the funder has today can be seen in its earlier moves. The foundation’s first grant, in 1948, provided sewing machines for an organization of Jamaican women to allow the nonprofit to make school clothes for children in their area.
“One of the things that they always did, which I think still is a part of PWF today, is they had this notion of proximity,” Jones said, explaining that the Marsh family had a home in the Caribbean. “They were like, ‘We want to give money in places that we see.’” In a bit of foreshadowing of the process PWF later used to find Black and POC-led nonprofits to support, Marsh himself reportedly built a network of “agents” to find nonprofits to fund.
The foundation was also an early supporter of criminal-justice-related work. In an early grant in this area, PWF was the largest financial backer of the first halfway house for people returning from incarceration in Washington, D.C., in 1963, the year before Marsh’s death. Other early criminal justice grants, made in the 1980s, supported family and friends of incarcerated people and alternatives to youth incarceration.
Any funder with a history spanning more than seven decades has changed its priorities and practices over the years, and Public Welfare Foundation is no exception. Two previous presidents pursued strategic philanthropy and another, Larry Kressley, purchased the historically Black True Reformer building and surrounding land in 1999 as part of a failed plan to eventually build affordable housing around the building. Today, in addition to housing PWF, Jones said the building hosts an incubator for Black-led nonprofits, a legal clinic for D.C.’s homeless residents, and space for area nonprofits to host meetings and other events. Unfortunately, Jones said, the success PWF has had with the True Reformer building may also have increased the pace of gentrification in the surrounding area — and the previous turn toward strategic philanthropy minimized the diversity of organizations that qualified for Public Welfare Foundation grants.
Today, though, Jones sums up PWF’s funding strategy as “pushing money to the ground.” When the funder announced its 2019 shift, she said “a lot of the big leaders in criminal justice reform were big, national organizations that smaller organizations either had to know or be in relationship with” in order to get access to assistance or resources. “Our shift was about the belief that if you push resources to the ground, you could really start to build power in a place. You can go to Michigan and say, ‘What does Michigan need to achieve in adult criminal and youth justice?’ and fund it all.”
Funders may look at Public Welfare Foundation’s success in locating and supporting Black and people-of-color-led nonprofits as a difficult-to-replicate anomaly. It would be a mistake to do so.
Yes, people of color are disproportionately affected by the criminal justice system, so this particular arena may have a larger number of potential BIPOC-led grantees than others. But scratch the surface of most issue areas, from environmental preservation to abortion access, and it quickly becomes clear that these communities are both disproportionately harmed and play a critical role in driving solutions. Throughout the nonprofit sector, the problem may well be that there isn’t a lack of diverse organizations to choose from — but rather, lack of commitment on the part of funders to find them.