By Emma Saltzberg
Imagine you’ve earned a competitive bonus at work. You’ve spent time demonstrating your worth and value to the organization, and finally, your hard work has paid off. Then, your supervisor tells you—as if you must have known—sure, you’ll earn an extra $8,700, just as soon as you pay us $1,800 of your own money.
This scenario parallels what happened to my organization when applying for a federal grant—multiplied by 10. After months of effort on my part as a development professional, and that of my colleagues, we were ecstatic to receive nearly $87,000 in funding from the Federal Emergency Management Agency (FEMA). I worked at a synagogue, and we planned to use the funds to renovate our building so as to be more secure and protected from antisemitic attacks (which increased by 275% in NYC in 2021). Later, we were informed that $18,000 of the total grant originally awarded was no longer permissible under the terms of the grant. That amount was to be used for maintaining compliance with landmarks rules—a requirement for renovation of any building with historic significance—which FEMA said was not directly applicable towards preventing terrorism. As that budget line was integral to the execution of the project, if we wanted to complete it and receive the remaining funds, we would have to pay.
Fortunately, I worked for a large organization, and they were able to provide the additional $18,000 from the capital budget. Yet, if it were a small grassroots organization, what would we have done? Due to the investments required, the unfortunate reality is that those organizations which most need the funding may be least likely to receive it. For many small organizations, this cash outlay would be impossible. Furthermore, the scenario described above only becomes an issue if an organization is able to receive the grant in the first place. This itself would be extremely difficult without funds to hire a professional grant-writer and/or the capacity to devote staff hours towards development. Grants should not only be accessible to large, established groups.
The disparity between large and small organizations is also related to race and diversity, as leaders of color report smaller budgets on average than white nonprofit leaders. Also, unrestricted net assets of Black-led organizations are on average 76% smaller than those of white-led organizations. Edgar Villanueva, author of Decolonizing Wealth, has coined the term “racial philanthropy gap.” There is abundant evidence that this funding disparity is pervasive, both between large and cemented organizations when compared to small and grassroots ones, as well as between white- and BIPOC-led organizations. For instance, only 9 to 12% of funding from the 1,000 largest U.S. foundations goes towards projects that are intended for minority populations.
The barriers to entry for fruitful grant applications are quite high. There is a capacity paradox whereby an organization with small capacity can’t apply for and receive a grant, and therefore can’t use the funds to increase their capacity, thus perpetuating this cycle. A smaller organization would be faced with much tougher choices than mine was: should they invest the money to hire a grant-writer to increase the chances of receiving the grant, or should they delegate the responsibility of grant writing and additional work hours to a singular development professional, or even their executive director? Worst of all, even if they do receive the grant, will there be sufficient flexibility in the budget to produce the additional resources needed?
To be clear, I do believe that funders genuinely want to distribute their money to those applicants who propose the best ideas and the strongest projects, and not just the most visible candidates or established organizations. In fact, in the last two decades, FEMA has distributed over $54 billion to organizations across the country, large and small, to prevent domestic terror attacks.
I urge funders—whether governmental or as trustees of a foundation—and the philanthropy sector as a whole, to actively combat the ways in which the cards are stacked against small organizations. One of the most effective ways for funders to do so is by diversifying their boards of directors and ensuring they are representative of the target population. Homogenous boards are susceptible to groupthink, which makes them less effective in serving their communities. I also recommend that when reviewing grant proposals, funders group organizations by the size of their annual budgets and select winners from each category. This way, small organizations are compared to one another rather than to larger organizations, and we can begin to level the playing field.
When traditional power structures are challenged in this way, barriers to entry for receiving equitable funding fall away. Increasing representativeness among those who distribute the resources should result in a more equitable distribution of those resources, and ultimately, that the true recipients will be those people we set out to serve. It is my hope that, beginning with this small step, grassroots organizations run by people of color could be funded as thoroughly as larger organizations with pre-existing resources.
Emma Saltzberg is a 2023 Wagner MPA graduate, specializing in Public Policy Analysis.