As the coronavirus pandemic has spurred philanthropy into action, observers say it’s necessary to ensure that dollars flow equitably.
“One of the challenges of charity is that it reinforces and is based upon the current structures of wealth,” said Malia Lazu, a lecturer at the Massachusetts Institute of Technology and a former Berkshire Bank executive. “And I think that’s really the elephant in the room for philanthropy.”
Given the reality of a racial wealth gap that, for instance, sees white families, on average, hold 10 times the wealth of Black families, ensuring that diverse voices play a role in philanthropy’s decision-making takes concerted effort. There has been a racial funding gap as well: Nonprofits led by Blacks see, on average, 24 percent less revenue than white-led nonprofits, a May report found.
For philanthropy to better channel resources from those who have wealth to organizations working on the ground to provide services, observers say, more diverse representation is needed in decision-making as well as funding. Local philanthropic leaders say they are committed to that mission, which they describe as an ongoing pursuit.
“It becomes not just that the outcomes are shifted by being led by people of color,” said Anaelisa Jacobsen, a Latina and a co-founder of the Pittsfield nonprofit cooperative Manos Unidas. “It’s the process itself that has a very different framework. ... We need to be able to create these structures [of support], and we need to honor the work on the ground that’s planting the seeds every day.”
Minority-led nonprofits tend to have greater proximity to the communities they serve, leading to better understanding of those communities’ needs and more trusting relationships, said Gwendolyn VanSant, founding director of Bridge, a Lee-based nonprofit.
“I’m seeing a real need around still prioritizing those communities, and rather than nonprofits and corporate folks deciding what vulnerable communities need, actually asking what those communities need,” VanSant said.
Particularly in a region that some Black residents and immigrants have described as isolating, these groups can better communicate information to some individuals, including those not fluent in English, said Nancy Gómez, co-director of Manos Unidas and community navigator for Working Cities.
“We became immigrants due to living through crisis in our countries,” Gómez said, in Spanish. “So, here, we work with the most vulnerable members of the community to create a source of confidence for them to fulfill basic needs for their families.”
For funders, ensuring diversity in funding begins with maintaining a wide net of relationships within the community. One aspect of that is diverse representation on boards.
Berkshire Taconic Community Foundation President Peter Taylor acknowledges that the foundation, which has one person of color among its 21 board members, falls short of its aspirations but says it is committed to improve.
“We need to do better,” Taylor said. “What we need to strive for is representation around the board table that is able to bring perspectives and insights and connections for us to be able to achieve our mission.”
The Berkshire United Way uses overall population as a target for representation, said President and CEO Candace Winkler. The United Way’s board has a membership that is 10 percent Black, outpacing the 2019 U.S. census estimate that 3.6 percent of Berkshire residents are Black. Hispanic members make up 5 percent of the board, aligning with the census estimate that 5.1 percent of Berkshire residents are Hispanic.
“Just meeting those targets … doesn’t mean we think we have nailed this,” Winkler said. “There’s always work to be done.”
As wealth inequality has widened nationally, philanthropy also has become more top-heavy.
While the percentage of households donating to charity fell from 66 percent to 53 percent from 2000 to 2016, the share of charitable deductions claimed by households making over $1 million jumped from 12 percent in 1995 to 33 percent in 2017, according to research by Chuck Collins and Helen Flannery of the Institute for Policy Studies.
Although the Berkshire United Way has not yet experienced such a trend — 32 percent of donations to its COVID-19 Emergency Response Fund fell below $100, Winkler said — small-donor giving is expected to drop because of economic hardship caused by the pandemic.
The increased concentration of giving among wealthier donors has had drawbacks, said Collins, director of the Institute for Policy Studies’ Program on Inequality and the Common Good. For one, every dollar donated by a billionaire costs 74 cents in lost tax revenue because of charitable tax deductions.
And wealthy donors also give differently, often warehousing wealth in family foundations that are required to give just 5 percent of assets to charity each year. Even if those foundations do contribute, Collins said, they might not have the same grasp of communities’ needs as a community foundation or local United Way, which often include local leaders on advisory committees.
“That’s the key here,” Collins said. “Who knows what’s going on? Who knows what the problems are and where to solve them, and who are the best community organizations to try to solve them? A lot of funders don’t know that.”
Collins has promoted a “charity reform agenda” to hold existing entities more accountable, but he also said philanthropy does not diminish the need for a fair tax system, or for government action to address racial disparities.
One possible solution lies in creating new groups to bring new perspectives to funding. Lazu, for instance, helped start the New Commonwealth Fund in Boston, in part out of disappointment with the lack of diverse representation on the Boston Racial Equity Fund started by Mayor Marty Walsh.
Lazu describes the New Commonwealth Fund as “a Black-led fund that will get money into the streets and probably ask different questions,” and she sees it as a model for other communities, including the Berkshires, to follow.
“The Berkshires have such a rich history of abolition in certain ways,” Lazu said, noting that Great Barrington is the birthplace of W.E.B. Du Bois. “The Berkshires could develop a philanthropic brand … really leaning into that rich history.”