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 [total of 10] survey respondents:

Type of Foundation

Type of Foundation -Funders Insights

Geographic constraints

Funding in Greater Houston

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?

  • 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.

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?

Type 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-led Organizations Struggle with Funders

“Stakeholders [funders] are not connecting directly with Blacks to understand what resources they need and for themselves and their [initiatives].”

“Grants opportunities are written that do not reflect them [smaller organizations] but the larger organizations. Certain things smaller organizations will not have.”

“I want to be resourced with a comprehensive, holistic approach that assesses every component of running a successful nonprofit.”

“I want to be resourced with buy-in with more thoughtful processes instead of reactionary changes and results. Less band aids and more root causes addressed.”

“[Funders will ask] Why can’t you be more like this organization or operate this way? This weaponizes which ‘Black’ org is going to get this funding. This also pits communities against one another - in that people may like an organization and what it's doing but have a problem with it being the only one resourced on that work or in that community.”

“White-led initiatives don’t have a grant or pitch. When it is a Black initiative, 100,000 is 50K to the intermediary org, and then 50K into 10 or 5 grants “...and I’m filling out this long ass app for 5,000 that my white colleague did for millions. It’s demeaning.”

“Fund [Black-led organizations] in ways that create self-sufficiency, agency, autonomy and allow initiatives to create “a buffet of opportunities.”

“Resource [Black-led organizations] in ways that allow Black bodies to rest.”

How Can Funders Better Support Black-led Organizations?

Diversify Your Support

Insights from funders- Diversify your support