In June 2020, financial institutions nationwide committed a record-breaking $4.2 billion to racial equity. Nonprofits directly received $300 million, representing 51% of total donation volume that month. However just six months later, funding for racial equity fell to 5% of the donation share. Now three years later, while energy has further slowed, racial justice remains a top concern across demographics.
We know nonprofits steered by Black leaders and people of color are best positioned to drive racial equity. However, it’s simply not enough for corporate funders looking to affirm their values to financially empower BIPOC leaders. To properly equip nonprofit leaders, financial institutions and other corporate funders must embrace a two-pronged approach of capital and capacity building.
One of the most effective interventions in capacity-building for BIPOC-led nonprofits lies in technology. Seventy-four percent of nonprofits say digital transformation is a need-to or must-have, yet only 12% score high on Salesforce’s Nonprofits Digital Maturity Index, often citing budget constraints.
Despite the nonprofit sector raising over $700 billion annually, 92% of nonprofits have a budget of under $1 million. Low operating budgets and lack of tech solutions make it harder for nonprofits to optimize daily administrative operations, with one of the most concrete examples being fundraising. Nonprofits are caught in vicious cycles of short-term fundraising as they scramble annually to find the capital needed to keep their doors open. This is something that tailored technological tools can revolutionize and improve.
Access to an online donations platform vastly expands how and where nonprofits can accept funds and provides a “subscription philanthropy” model, for example. There also is no ignoring the power of online training. Grassroots organizations may not have the experience required for long-term planning; but providing access to a searchable database of online courses can help nonprofit leaders get up to speed on skills that drive organizational development, saving time and avoiding the need to reinvent the wheel for common issues. Once nonprofits have access to such technologies, they unlock the donations needed to plan farther in advance — disrupting the cycle of frantic annual fundraising and allowing more time to focus on urgent, frontline work.
Several corporations have already embraced the model of supporting racial equity leaders through technology that builds capacity. U.S. Bank is the latest funder to join forces with Resilia, a tech-for-good company that builds technology tools for nonprofits, which provides access for BIPOC-led nonprofits to have platforms that build capacity. And, both nonprofits and corporate funders benefit from this approach. Without hiring staff to oversee the distribution of funds, institutional givers need assurance their support resonates with nonprofits, especially when it comes to BIPOC-led nonprofit organizations. With disparities in funding persisting, many nonprofit leaders have been let down by the lack of long-term commitment, and a level of trust-building is needed.
Major corporations that pledged commitments to racial equity in 2020 and want to follow through can still do so. But it’s not enough for corporate funders to just give money. The difference maker is meeting BIPOC-led nonprofit organizations and communities where they are and connecting them with the tools that will help them level up — ideally technologies designed with them in mind.
Valentine Ollawa is the Vice President of Customer Success at Resilia, a tech-for-good organization that strengthens the capacity of nonprofits and helps grantors scale impact through data-driven technology solutions. A California native who now resides in Texas, Valentine brings his experience working in the “tech for good” sector to support nonprofit organizations to make an impact in their communities. When not working, Valentine enjoys photography, exploring nature and foods, and trying out neighborhood coffee shops.