5 takeaways on giving to nonprofits serving communities of color

How much do individuals, foundations, and corporations give to nonprofits “primarily dedicated to serving communities of color”? Based on 2012-22 IRS data, the Communities of Color Index 2025 report from the Indiana University Lilly Family School of Philanthropy’s Equitable Giving Lab highlights trends in, sources of, and gaps in philanthropic support for organizations serving Native American/American Indian/Alaska Native, Asian-American and Pacific Islander (AAPI), Black/African-American, and Hispanic/Latinx communities. (The definition differs from Candid’s definition of “funding for racial equity.”) The study includes nonprofits working in areas such as economic development, health care, and education that, if not exclusively focused on communities of color, dedicate 80% or more of program expenses to them. Here are five key findings:

1. Nonprofits serving communities of color receive 2.9% of charitable giving

Charitable giving to nonprofits focused on communities of color grew significantly from $9.8 billion in 2019 to $13.4 billion in 2020 and $16.6 billion 2021. In 2022, however, it leveled off to $16 billion, or just 2.9% of overall giving from individuals, foundations, and corporations. Despite the increase in support, giving to these organizations remains a fraction of giving to traditional subsectors such as human services ($83.9 billion), education ($79 billion), and health ($52.1 billion).

2. MacKenzie Scott contributed one-fifth of the 2020 spike in giving to these nonprofits

While giving to nonprofits serving communities of color surged in 2020 and 2021, a large share of that increase came from a few high-profile philanthropists such as MacKenzie Scott and Reed Hastings and his wife, Patty Quillin, as well as corporations such as Apple and Walmart. Scott made at least 58 gifts totaling over $750 million to organizations in 2020, accounting for more than one-fifth of the total year-over-year increase in funding. Between 2020 and 2022, Scott also made 37 unrestricted grants totaling $132.5 million to organizations focused on Native American/American Indian/Alaska Native communities.

3. Nonprofits serving multiple communities of color receive more funding than those serving specific ones

The data shows that total giving to organizations serving multiple communities of color is significantly greater than to those serving any specific racial, ethnic, or tribal population. In 2022, more than half of the $16 billion directed to nonprofits serving communities of color went to organizations that more generally serve communities of color, whether through broad racial equity work or by “serving geographic communities comprising many races, ethnicities, or tribal peoples.”

By comparison, among nonprofits primarily focused on one population, those focused on Black/African-American communities  received $3.3 billion in 2022. Organizations serving Hispanic/Latinx communities received $1.4 billion, those focused on Native American/American Indian/Alaska Native communities received $1.2 billion, and those serving AAPI communities received $944 million.

4. Human services and education nonprofits receive nearly 60% of giving to these organizations

While there are nonprofits focused on communities of color across all traditional subsectors, human services and education organizations received the most in giving. At nearly 31% and 29%, respectively, these are significantly larger shares than the 16% and 17% human services and education nonprofits receive among those not primarily serving communities of color.

Among nonprofits serving communities of color, public society benefit groups—for example, civic, civil rights, and community improvement organizations—received about 18% of giving, and health and arts and culture organizations received nearly 8% each.

5. Nonprofits serving communities of color are disproportionately reliant on government grants

Although the study is focused on charitable giving by individuals, foundations, and corporations, the report also notes that nonprofits focused on communities of color are heavily reliant on government grants. Funding from federal, state, and local governments make up about two-thirds (65.4%) of all contributions to these organizations. By contrast, just over one-third (36.1%) of contributions to other nonprofits come from government grants.

The 2022 data shows that among nonprofits serving communities of color, those with larger assets are more reliant on government grants, aligning with trends observed among other organizations. Organizations in the health, education, and human services subsectors also were more likely to receive government grants.

“[I]t is possible that disparities in private funding, coupled with challenges in establishing long-term reserves, may drive [these organizations] to depend on renewable sources of funding like government grants to fulfill their missions,” the report’s authors write. “While government funding can provide essential support, it also means organizations are more susceptible to shifts in public funding priorities.”

This article is part of a regular feature where Candid insights shares key takeaways from a new research report to encourage a more data-driven approach to the sector’s work. Leave a comment to recommend a report for an upcoming feature. 

Photo credit: Jacob Wackerhausen via Getty Images