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How CNCS Can Address Nonprofit Funding Bias. Andrew Sears Executive Director, TechMission [email protected] 617-282-9798 x101. Presentation Available at: www.urbanministry.org/cncsproposal. Outline.

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how cncs can address nonprofit funding bias

How CNCS Can Address Nonprofit Funding Bias

Andrew SearsExecutive Director, TechMission

[email protected]

617-282-9798 x101

Presentation Available at:

www.urbanministry.org/cncsproposal

outline
Outline
  • There is a strong bias across race, class and gender from foundation funding of nonprofits
  • While CNCS did not cause this bias, CNCS has the potential to counter this bias
  • Specific policy recommendations on how CNCS can counter the funding bias
why techmission is addressing this issue
Why TechMission Is Addressing This Issue?
  • TechMission is an AmeriCorps national direct grantee that supports an at-risk corps
  • TechMission primarily supports Black and Latino-led nonprofits that are close to the community
    • We have seen how these nonprofits are experiencing systemic issues with bias in funding of nonprofits
    • In a down economy, we are observing an increasing bias towards large (i.e. White) organizations
    • Many of our partner sites are struggling to stay functional
why techmission can speak to this issue
Why TechMission Can Speak to This Issue?
  • TechMission’s organizational culture reflects lower class culture
    • Nearly all of board and senior staff are Black, Latino and/or come from low-income background
    • ED is White from lower class background
    • TechMission Corps AmeriCorps members are 63% Black and Latino with 50% from low-income backgrounds
  • TechMission has one of the widest spans of connection with grassroots organizations (over 4,000 registered nonprofits)
    • UrbanMinistry.org being the Black/Latino counterpart to Idealist.org and VolunteerMatch.org
  • Leadership has extensive experience on writing about and living out reconciliation across race, class and gender
nonprofit statistics and race
Nonprofit Statistics and Race
  • 1.4 million registered nonprofits in USA
    • 1,169,000 White-led nonprofits
    • 138,600 Black-led nonprofits
    • 50,400 Latino-led nonprofits
    • 12,600 nonprofits led by other races

Source: Number of nonprofits from Independent Sector,

Racial breakdown extrapolated based on survey results at:

http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf

slide6
Funding Bias: Non-Whites Make Up 52.4% Of Poverty But Non-White Led Nonprofits Only Receive 3% of Funding

http://www.slideshare.net/rosettathurman/race-matters-in-nonprofits-promoting-diversity-in-our-profession and

http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf

nonprofit leadership does not reflect class community it serves
Nonprofit Leadership Does Not Reflect Class Community it Serves

Data show subjective estimates from the author based on educational levels and class assimilation rates of

nonprofit leadership. 94% of leadership have at least bachelor’s degree with an estimated class assimilation

rate of 90-95% based on living location & culture

most nonprofits have a different class culture than clients they serve
Most Nonprofits Have a Different Class Culture than Clients They Serve

Leadership

Clients Clients Clients Clients

funding and gender
Funding and Gender

From: http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf

diversity profile of cncs
Diversity Profile of CNCS

Sources: http://www.abtassociates.com/reports/ES-americorps-baseline.pdf

http://www.abtassociates.com/reports/COMSRVS.pdf

http://www.opm.gov/feddata/demograp/Table2mw.pdf

if cncs funding profile reflects nonprofit leadership profile in usa
If CNCS Funding Profile Reflects Nonprofit Leadership Profile in USA…

Source: http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf

summary
Summary
  • It is not CNCS’s fault that there is a funding bias in the nonprofit community, but…
  • CNCS has the ability to dramatically counter nonprofit bias
    • Diversity profile of AmeriCorps members is strong: creates diversity in leadership pipeline of nonprofits
    • Diversity profile of leadership of CNCS funded organizations is unknown
      • This is what is most important to counter funding bias
      • Diverse leadership creates diversity throughout organizations
why does only 3 of foundation funding go to nonprofits led by people of color
Why Does Only 3% of Foundation Funding Go to Nonprofits Led by People of Color?

Statistics are explained in the attached spreadsheet at:

www.urbanministry.org/fundingbias

two issues for policy consideration
Two Issues for Policy Consideration
  • Lack of representation of FBOs can lead to Disproportionate Effects on Black and Latino-led organizations
    • Less than 10% of AmeriCorps national direct organizations are faith-based
    • Faith-based organizations represent about 1/3 of the social services sector
  • Cultural Bias
    • Standardized outcome measures and funding criteria can unintentionally introduce a cultural bias into funding process just like standardized testing introduces bias in educational tests

Statistics are explained in the attached spreadsheet at:

www.urbanministry.org/fundingbias

techmission experience hhs cncs
TechMission Experience: HHS & CNCS
  • TechMission was a grantee (with CTCNet) with HHS Compassion Capital Fund (02-06)
    • CCF grantee meetings were over about 75% people of color and about 50% FBOs
  • TechMission is a National Direct grantee
    • Grantee meetings seem to be about 10% people of color and less than 10% are FBOs
  • Differences between HHS CCF & CNCS
    • Different levels of outreach to FBOs and communities of color
    • Different levels of outreach to ensure that FBOs and communities of color are adequately represented among grant reviewers
    • HHS follows Charitable Choice legislation respecting religious hiring rights
    • AmeriCorps does not seem to follow Charitable Choice and requires non-discrimination on sexual orientation
    • Our estimate is that differences in hiring rights results in a loss of more than 50% of FBOs which eliminates 1/3 of Black-led nonprofits
  • We recognize that this is just our non-statistical estimates based on limited meetings and discussions with partners
policies recommendation 1 reach out to indigenously led faith based nonprofits
Policies Recommendation 1: Reach out to Indigenously-Led Faith-Based Nonprofits
  • Policies that restrict funding faith-based organizations create an unintentional bias toward White-led organization
  • How it works
    • About 2/3 of Black-led nonprofits are in churches or other faith-based organizations
    • About 2/3 of White-led nonprofits are secular
    • Limited funding of faith-based organizations makes White-led nonprofits twice as likely to get funded
  • It is Critical to Continuing efforts of Office of Faith-based & Neighborhood partnerships

Statistics are explained in the attached spreadsheet at:

www.urbanministry.org/fundingbias

policies recommendation 1 reach out to indigenously led faith based nonprofits1
Policies Recommendation 1: Reach out to Indigenously-Led Faith-Based Nonprofits
  • Invest significantly in recruiting:
    • Grant reviewers from under-represented populations
    • Organizations led by minority groups that are under-represented
  • Intentionally prioritize intermediaries that show history of success in placing members in minority-led nonprofits
    • Consider expanding Native American focused initiative to include minority-led grantees with greater than 50% minority placements
policies recommendation 2 use diversity profiles for all cncs applicants
Policies Recommendation 2: Use Diversity Profiles for All CNCS Applicants
  • Recommend CNCS require all funding recipients to complete diversity reporting form as part of applications
  • Recommend CNCS publicly list their own diversity reporting form with the cumulative results of who they funded and who the members are
  • Recommend Diversity reports carry similar weight as financial and other outcome reports and should be listed in CNCS’s annual report
    • Diversity profiles & reports become an approximate measure for many of the subjective elements that are hard to measure in other outcomes
    • Diversity reports could be used to provide suggested corrective actions to grantees that significantly under-represent the populations they are serving
    • Diversity provides could help CNCS adapt its funding portfolio to better include under-represented groups
comparing bias in standardized testing to bias from standardized outcomes
Comparing Bias in Standardized Testing to Bias from Standardized Outcomes
  • Racial Bias
    • White or Asian: 150-200 point increase
  • Income Bias
    • 30 points per $10,000 of family income
  • The cultural bias of the SAT test is well documented and understood
  • The bias from standardized outcomes is similar but less well understood

Source: http://www.maec.org/natstats.html

& http://www.educationanddemocracy.org/testing_facts.pdf

understanding nonprofit funding bias
Understanding Nonprofit Funding Bias
  • Racial Bias
    • 97% of foundation funding goes toward White-led nonprofits
  • Income Bias
    • Estimated 95% of leadership of nonprofits is culturally middle class
  • Gender Bias
    • While 58% of nonprofit executives are women, the median income of a nonprofit led by a man has twice the median income of a nonprofit led by a woman
  • The Cultural bias of foundation funding is well documented, but not well understood

Sources: http://www.aecf.org/upload/publicationfiles/executive_transition_survey_report2004.pdf &

http://greenlining.org/publications/pdf/339

The class statistic is explained on a previous slide

dominant culture outcomes vs non dominant outcomes
Non-Dominant Culture

(lower class value)

Dominant Culture Outcomes vs. Non-dominant Outcomes

Dominant Culture

(middle & upper class value)

Value Big Organizations

Almost no weight given to leadership being close to the community

Community support = funding

Analytical & Quantitative

Nonprofit “SAT Scores”

Purely Objective Criteria

Secular Focused

  • Cost effectiveness
  • Is leadership close to the community?
    • Race of leadership (staff/board)
    • Class background of leadership
    • Neighborhood they live in
  • Holistic
    • Has a Life been Changed
  • Subjective
  • Faith-Based & Secular
ways to counter bias of standardized outcomes
Ways to Counter Bias of Standardized Outcomes
  • Rigorous standardized outcomes without rigorous demographic tracking will result in the same type of bias for funding as exists for standardized tests
  • Follow No Child Left Behind as an example
    • Requires rigorous outcomes
    • Track demographics equally rigorously
    • Result is that people are held accountable and social injustice is exposed
  • “If you can\'t measure it, you can\'t manage it.” - Peter Drucker
sample diversity profile form
Sample Diversity Profile Form

From Associated Grantmakers of Massachusetts:

http://www.agmconnect.org/cpf/CPF_Diversity_Form.xls

policies recommendation 3 revise funding criteria to better reflect community values
Policies Recommendation 3: Revise Funding Criteria to Better Reflect Community Values
  • Diversity profiles become an objective measure to approximate subjective elements that are hard to quantify
  • Example from TechMission’s Grant Applications
    • 20% of Grant Application Weight: Is leadership close to the community as reflected in their diversity profile and strategy?
      • Use diversity profile form and grant questions
    • 20% of Grant Application Weight: Is organization serving the highest risk community?
      • Require detailed criteria to distinguish at-risk vs. high risk, etc.
policies recommendation 3a revise funding criteria
Policies Recommendation 3a: Revise Funding Criteria
  • Consider “Minority Owned Business” Preference for Nonprofits
    • If the Government gives preference to minority owned businesses in contracts, shouldn’t that be a consideration with nonprofits?
    • Nonprofits that closely reflect the demographics of the communities they are serving should be given preference (affirmative action in nonprofit funding)
  • CNCS as Nonprofit Equivalent of Small Business Admin
    • Demographics of CNCS’s funding portfolio will be under increased scrutiny in the same way the SBA
    • The rapid increase in number of nonprofits is comparable to the increase in small businesses.
    • Is CNCS adopting strategies similar to the SBA fostering the growth of these small nonprofits?
policy recommendation 3b revise funding criteria related to cost per member incentives
Policy Recommendation 3b: Revise Funding Criteria Related to Cost Per Member Incentives
  • CNCS funding process currently encourages a high cost per member
    • Higher match means more likely to get more funding from CNCS
    • Most 1,000+ member grantees have a cost per member around $30k-40k per member
    • Under the Serve America Act, growth from 75,000 members to 250,000 @ $40k/member would require $7 billion in growth annually in the nonprofit sector
    • $7 Billion of nonprofit sector growth among CNCS grantees is not realistic in the current economy
    • Requiring high match creates a bias toward more elite organizations which may not reflect community demographics
    • FBO’s do not include much of their potential match because doing so creates hiring and faith restrictions on those funds
policy recommendation 3b revise funding criteria related to cost per member incentives1
Policy Recommendation 3b: Revise Funding Criteria Related to Cost Per Member Incentives
  • Emphasis on high cost per member creates a systemic bias
    • Since 97% of foundation funding goes to White-led upper-middle class nonprofits, other nonprofits have difficulty finding match
    • High cost per member programs have much more funding to track and record rigorous quantitative outcomes further increasing their chances of funding
    • Encourages high overhead and upper-middle class, elite organizations
  • Solution
    • Need stronger weight on measures of efficiency and diversity profile in funding and less weight on total cost per member (high match)
    • Move toward quantitative measures of social value beyond just funding match to show social return on investment (RoI)
summary1
Summary
  • There is a strong bias in the nonprofit funding community toward White, elite nonprofits
    • That is not CNCS’s fault
  • CNCS needs to implement policies to counter this bias
    • Intentionally pursuing indigenously-led FBOs
    • Use diversity profiles in applications & outcomes
    • Need to revise funding criteria to offset systemic bias
summary revisions to funding criteria
Summary: Revisions to Funding Criteria
  • Give diversity profiles significant weight in funding decisions.
  • Give preference for nonprofits that are the equivalent of a “minority owned” business
  • Develop funding strategies to foster growth of new nonprofits similar to the government’s small business strategies
  • Reverse incentives for programs to have a high cost-per-member with incentives focused on efficiency with high social RoI

Presentation Available at: www.urbanministry.org/cncsproposal

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