The State of Black-Led Nonprofits in Philadelphia

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April 28, 2016; Philadelphia Business Journal

In 2013, the Philadelphia African-American Leadership Forum (PAALF), with funding from the United Way of Southeastern Pennsylvania and Southern New Jersey, sought to understand whether the experiences and needs of African American-led nonprofits in Philadelphia differed in important ways from white-led nonprofits when it came to funding, sustainability, obstacles of the past, and opportunities for the future.

Their report, “How African American-Led Organizations Differ from White-Led Organizations,” included the findings from a survey of 145 executive directors or CEOs (“EDs”) of human service-oriented nonprofits in Philadelphia, two focus groups with African-American EDs, and four interviews with local funders. Of the survey respondents, 74 were African-American (51 percent), 63 are White (43 percent), and eight are another race/ethnicity (6 percent). Those survey findings compared African-American and white EDs to uncover similarities and differences in their experiences and the states of their organizations and boards.

Many of the findings are somewhat predictable if distressing. But let’s start with the similarities found.

Overall, there were some similarities—in the background and experiences of EDs, in what EDs do in their daily work, in several organizational characteristics such as age and budget, and in the gender composition and expertise of board members and senior staff.

But that may be where it ends. The African American–led organizations have smaller staff and fewer volunteers than the white-led groups. They also tend to have smaller cash reserves and are more reliant on government grants than their counterparts. Remember here that government grants often do not pay full costs. This makes these organizations as a class relatively illiquid and, therefore, vulnerable to being severely affected by changes as small as an unexpected facilities or technology expense and as large as a recession.

Additionally, the study found that where executive leadership was African American, the board primarily reflected that identity, and this was also true in the comparison group—where the executive leadership was white, so was most if not all of the board. The report speculates that this has led to a lack of social capital and, consequently, fundraising capacity where the local seats of wealth are concerned. It does not, they observe, help that the senior staffs of the white-led nonprofits also tend to be white.

These findings mirror to a great extent other findings about African American institutions. In 2014, for instance, Rick Cohen did a two-part series about Black museums wherein he referenced a 2007 study by Randall A. Williams and Michael Worth of George Washington University which reads, in part, “African American museums face a unique set of challenges that impede their efforts to achieve financial sustainability. African American museums are under funded due to historical barriers, cultural preferences for charitable giving, institutional youth, and a dearth of professional business and museum skills.”

“Virtually none are accredited with the American Association of Museums (AAM), few have endowments beyond a nominal size, and many have had to cut staff, programs, or projects in order to remain open,” Williams and Worth wrote. “African American museums need an internal reorientation of missions and staff, as well as an external infusion of funds and experience to address these challenges.” The picture is a relatively familiar one, a combination of marginalization and undercapitalization.

PAALF offers suggestions of what they will be doing in Philadelphia to combat what they are characterizing as a systemic weakness, including working to give African-American organizations access to the necessary technology and evaluation tools to accurately collect data and show impact in the communities they serve. They also plan to encourage more collaborations and partnerships among African-American nonprofits and local philanthropic communities.

But PAALF’s biggest recommendation is to create more paths for leadership for African Americans working in the nonprofit industry. PAALF has committed to working with CEOs and HR staff at majority-led nonprofits to make sure that African Americans are given the kind of opportunities needed for professional development, especially at senior and middle management levels. The organization has likewise suggested a nonprofit hiring policy similar to the NFL’s “Rooney Rule.” Implemented in 2003, this rule requires teams to interview at least one minority candidate for an open head-coaching position. Likewise, such a rule could be applied in the nonprofit sector to require nonprofits to solicit organizations like PAALF and others to recruit qualified African-American candidates for consideration. Although this rule has been criticized somewhat in the NFL for promoting so-called “token” interviews of minority coaches, it has correspondingly emphasized the bigger issue of institutional racism of leadership positions in the NFL. While the nonprofit industry is playing a different game, it is suffering from the same illness and must play by similar rules if they want to really begin to tackle the issues highlighted by this report sincerely. And then, of course, there is the question of capital.—Alexis Buchanan