Insights from Funders
We surveyed funders who support Black-led organizations in the Greater Houston area with the intent to share insight into current philanthropic practices and funding processes, as well as recommendations to better support Black-led organizations, and to share guidance on how to navigate within Houston philanthropy.
Here is a breakdown of our 10 survey respondents:
Type of Foundation
Geographic constraints
What are funders investing in?
Issue Areas – Top 5
1. Education
2. Environment
3. Arts and Culture
4. Community and Economic Development
5. Health
80% of respondents track nonprofit leadership demographics, but the ‘how’ varies
What data is being tracked?
– Leadership and staff levels were most common breakdowns
– Also common to ask for demographic data of clients
All respondents make lists of previous year’s grant awardees publicly available, followed by 78% providing clear funding guidelines on their website.
60% of respondents accept unsolicited applications but most funders rely on word of mouth and networking to identify new potential grantees.
How the funders we surveyed find organizations to support:
Other responses: included subject matter experts, community news, conferences, resource guides (e.g., GHCF Giving Guide of Houston Black-led Organizations)
70% of respondents use financial health indicators
What are funders looking at within financial statements?
- Surplus/deficits (historical)
- Diversity of funding streams
- Liquidity/cash reserves
- Board giving
- Assets/liabilities
- Existence of internal/external
Those that don’t use financial health indicators are still reviewing provided financials, budgets, and 990s.
Unwritten Rules
Funders also told us that they use “unwritten rules” in deciding who to fund.
These include:
■ Budget maximum limit
■ Limits on the percentage of an organizational budget a funder will fund
■ Preference for a minimum of 1-2 paid staff
■ Preference for more established organizations
■ Board giving as indicator of financial health
■ Overhead limited to 10-20%
What kind of grants are funders surveyed providing?
Types of Grant
Median Grant Size
Where are there opportunities?
The majority of respondents introduce up to 25% new grant partners into their portfolios each year.
88% of Houston area funders we surveyed reported an increase in their level of funding to Black-led organizations since the onset of pandemic.
Since the pandemic, General Operating Support has increased but Multi-Year Grants have remained the same. Looking forward, respondents expect that General Operating Support will remain the same (40%) or increase (30%) while Multi-Year Grants will increase (40%).
Although the majority (60%) of survey respondents rely primarily on word of mouth to identify new potential grantees, 44% host info sessions for applicants; 55% mentioned being accessible/reachable via phone/email for a pre-conversation and answering questions or providing FAQs.
Some funders surveyed mentioned using practices in their programming to help them better hear from community voices. These include:
Funders are increasingly getting equity training
Equity Training
- Almost all respondents (90%) have undergone informal equity training, such as staff-led initiatives
- Only 40% of respondents have undergone formal equity training, such as through a thrid-party consultant/trainer
- 30% of resondents have undergone both formal and informal equity training
Participation in equity trainings trends heavily toward program staff and executive leaders. However, non-program staff and board participation is minimal.
Black leaders shared their experiences working with Funders. Here's what they said:
“Stakeholders [funders] are not connecting directly with Blacks to understand what resources they need and for themselves and their [initiatives].”
“I want to be resourced with a comprehensive, holistic approach that assesses every component of running a successful nonprofit.”
“[Funders will ask] Why can’t you be more like this organization or operate this way?
“Fund [Black-led organizations] in ways that create self-sufficiency, agency, autonomy and allow initiatives to create “a buffet of opportunities.”
How Can Funders Better Support The work of Existing Black-led Organization Grantees?
We invite you to join us in ending the resourcing inequities faced by Black-led organizations.
Ways to Close the Gap
- Develop initiatives focused on increasing multiyear, unrestricted, and organizational development funding. See the Ford Foundation’s BUILD Initiative.
- Create funds that focus on resourcing Black-led organizations. See the Seattle Foundation’s REPAIR Initiative.
- Establish funder/grantee collaboratives focused on deepening the relationships with and increasing funding to Black-led organizations. See the Democracy Frontlines Fund.
- Utilize intermediaries to facilitate grantmaking to smaller Black-led organizations. See United Way of Greater Atlanta’s United for Racial Equity and Healing Fund.