How can funders better support Black nonprofits for lasting change?

From Transaction to Transformation: Three Ways Foundations Can Invest in Black-Led Nonprofits for Lasting Change is the latest joint research project from Candid and ABFE. The report examines the extent to which private foundations have—or have not—supported Black nonprofits through three lenses: financial support, social support, and human-centered support. The second of two studies, this research follows our December 2025 publication, Holding the Line: Black-Led Nonprofits and Race-Explicit Work Amid Backlash.

This latest report demonstrates that Black-led nonprofits—organizations with majority Black leadership and serving predominately Black communities—are less likely to receive foundation funding than other nonprofits. It also provides new, nuanced evidence of the role of organizational size on those disparities. The study analyzes grants awarded by private foundations, survey data, interviews with Black nonprofit leaders, and a focus group of foundation representatives to demonstrate that, although grant dollars are essential, they alone are insufficient for funders to build authentic partnerships built on trust with Black-led organizations.

Here are some key findings from the report.

Financial support: Black nonprofits are less likely to receive foundation grants

Data from 2016 to 2023 shows Black-led nonprofits were less likely to receive foundation grants: Only 50% received funding in a given year, compared with 70% of other nonprofits. In addition, Black-led organizations that did get foundation funding received fewer grants on average than other nonprofits.

Small Black-led nonprofits were least likely to be funded—only 30% on average received a grant in a given year. This was not because they were not seeking funding. We found they had the lowest grant success rate—that is, they received the lowest proportion of total grants they applied for. The data backs up the experience summarized by a Black nonprofit leader: “We have not had a lot of success with looking for grants. Oftentimes we have no idea why.”

In 2020, the pandemic and racial justice uprisings led to increased philanthropic commitments to support Black communities. But how much really changed—and for which organizations? We found that, while more foundations awarded grants to Black-led nonprofits beginning in 2020, grant dollars were not distributed equally. Small Black-led nonprofits saw no significant change in the amount of funding received; most of the increased funding was directed to large Black-led nonprofits. And even those large organizations saw a decline in funding in 2023, which suggests that the surge in giving from 2020 through 2022 may have been short-lived. This was confirmed in interviews, with one Black leader observing: “That window closed probably in 2023, and people started signaling that those areas of money and resources were already drying up.”

Social support: Small Black nonprofits had fewer sustained funding relationships

To understand the nature of Black-led nonprofits’ relationships with funders, we examined the proportion of foundation funding that came from existing funders compared with new ones. Black-led nonprofits relied far more heavily on new funders and had less continuing support from year to year. This was especially true for small Black-led nonprofits: New funders accounted for the majority (64%) of their total grant funding. Cultivating new funder relationships requires an investment of time and capacity—which are limited resources for small nonprofits. This makes it all the more important to secure sustained support from funders.

A Black leader we interviewed described what it feels like to build these new relationships: “It is the longest dating process I’ve ever felt…. Once you finally get to the gatekeeper, once you make it to the gate, they’re like, ‘Okay, you’re here. We’re going to serve you some food, but we’re not sure if we want to eat with you.’”

Black nonprofit leaders we interviewed provided additional insight and context about their relationships with funders. They described supportive funders who championed their work, shared ideas and connections, and demonstrated a commitment to Black communities. But many also experienced common challenges, such as discriminatory double standards or lack of respect for their expertise and community knowledge.

One Black leader said: “There is something about trusting us to be able to do the work that we have already determined in partnership with community. This is what community wants and needs.”

Human-centered support: Black nonprofit leaders seek investment in people

Philanthropy has historically overlooked the human aspect of funder-grantee relationships. Black nonprofit leaders shared that, beyond grants, they seek respect, care, and authentic commitment from funders. When asked what specific funder actions signal genuine partnership, they cited trusting nonprofits’ expertise, valuing nonprofits’ commitment to their missions, and building a shared future together.

“Some of my authentic partner funders are the ones who care about how I am doing and are not always about the work, program, and report,” a Black nonprofit leader stated. “One of the funders who we work with really just let me talk and dream of my ideal situation for [nonprofit].”

Black leaders observe that vacillating funder support and the backlash against racial equity efforts are nothing new. To many Black nonprofit leaders, the current funding environment is not “unprecedented,” as it’s often described by others. But repeated historical patterns of support and retrenchment take a cumulative toll on Black-led nonprofits’ capacity and resilience.

Our research shows partnerships between funders and Black-led nonprofits built on trust, respect, and sustained commitment are possible. Philanthropy can move from transactional to transformative relationships when foundations provide Black nonprofits with not just financial support but also social and human-centered support.

For key findings from the report, please see From Transaction to Transformation: Executive Summary.