new fund aims to tackle inequitable investments in black and brown-led nonprofits | Chicago News
Messiah Equiano started CHI-RISE as a “labor of love” in 2018. He was tired of traveling outside of Chicago and hearing people call the city “Chi-raq”. With CHI-RISE, Equiano strives to promote positive stories in Chicago, through block parties, media production and mentoring programs.
Accessing funding to support and expand this work has at times been difficult, he said. At first, Equiano funded the organization himself, but he was not always able to provide all the programming and financial support he wanted.
“If in my own life things got complicated or I had to get another job, I had to pay the bills and CHI-RISE came in second,” said Equiano. “I think for a lot of people like me, where it’s a personal labor of love, we may not have access to funding.”
Research shows that black and brown-led nonprofits receive less funding than their white counterparts. This is for a myriad of reasons, including a lack of relationships and connections within philanthropic circles.
“Funders are averse to risk, they tend not to want to invest in organizations they don’t know,” said Sean Garrett, president and CEO of United Way Metro of Chicago. “So that means newer, smaller, and often founder-led organizations are less likely to receive funding. “
A 2020 analysis of grant applicants by Echoing Green and The Bridgespan Group found that, on average, black-led organizations saw 24% lower revenues than their white counterparts. Meanwhile, the unrestricted net assets of black-led organizations were 76% smaller.
A new United Way of Metro Chicago program is working to address this disparity. This year, he launched the United Neighborhood Equity Fund, selecting 10 black and brown-led nonprofits in Chicago’s South and West neighborhoods to receive funding and support. Recipients will receive $ 50,000 in unrestricted funds over the next two years, as well as support from DePaul’s non-profit management program. Leaders will also be put in touch with partner companies and foundation leaders, helping to build relationships with major funders.
“We started this fund after looking at our own funding and we looked at the places we fund. While we fund a more diverse portfolio of organizations than many others, we were far from where we wanted to be, ”said Garrett.
Centraide turned to the organizations involved in its neighborhood network initiative to identify the main local community organizations having an impact.
Centro Sanar is one such organization. The nonprofit started providing free mental health services to residents of the southwest side of Chicago in March 2020. It started with just four co-founders working for free, in November it received $ 500 in funding. $ 000 and extended to nine paid employees.
Co-founder Edwin Martinez says that even with this growth, the organization still cannot meet demand. Their waiting list is about four to five months.
The organization still faces challenges in securing additional funding. One of the barriers is not having the resources to do the administrative work that would position them better for grant opportunities, like setting up a website or having an accountant.
“Building all of these things that you would typically have as COOs, communications directors in big nonprofits, as a small, grassroots organization on a shoestring budget, we can’t afford that,” he said. said Martinez.
Martinez said United Way’s equity fund will help Centro Sanar strengthen its positioning and prepare the nonprofit for more grant opportunities.
“The other thing, and it’s often a challenge for small organizations run by Blacks and Browns, is that we often can’t compete with larger nonprofits with different amounts of funding,” Martinez said. “Unrestricted funding is therefore very valuable because we can afford and receive larger grants, but also state or city funded grants that are repaid. Some grants are seed funding, others are repaid. The smaller nonprofits can’t really afford the repayment grants which tend to be a bigger pot of money. “
CHI-RISE is also part of the equity fund. Equiano learned about the fund through a scholarship from the Goldin Institute.
“There is something that needs to be said about having access and being in the ‘crowd’, or being aware of these opportunities,” said Equiano. “If I wasn’t a Chicago Peace Fellow, I wouldn’t even have known about this opportunity. “
Garrett hopes that United Way’s support of the 10 local organizations will encourage other organizations and foundations to provide more support to nonprofits.
“We are seeing a number of efforts like this. There are a number of organizations, foundations that have said, “We have to be different. We need to invest differently. I think what people find is change the network to start with, change the networks and the relationships that people have, ”Garrett said. “You don’t want to fund a great grant author… they’re a big part of the ecosystem, but you want to fund the organization that does a great job in the community. “
Note: This story will be updated with a video.