Nonprofits Serving and Led by People of Color Showed Pandemic Resiliency

During the COVID-19 pandemic, community-based organizations were essential to delivering resources to people with the greatest needs. In addition to providing their usual services, organizations responded with outreach like delivering food and providing information about emergency business loan programs and vaccinations.

Nonprofit organizations committed to serving communities of color are often embedded in those communities. Frequently, they also strive to build staffs representative—from a racial and ethnic point of view—of the communities they serve. As a result, these organizations tend to have a more accurate understanding of community needs, as well as residents’ strengths. During a crisis, they can reach people faster and deploy programs that fit people’s needs. Over time, these organizations can earn the trust of their communities, which enables them to provide better services.

However, emerging research suggests that nonprofits that are led by and serve people of colorWe defined organizations as led by people of color if the answer was “yes” to this survey question: “Is the entity you represent led by a person of color?” Organizations were defined as serving people of color if the answer was “yes” to this survey question: “Does the entity you represent primarily serve a community of color?” can face greater financial challenges than other nonprofits, which impedes resource development and reduces their ability to serve vulnerable populations.

During the pandemic, nearly all nonprofit organizations faced challenges, from financial volatility to increased demand for services to staffing challenges. Given this context, how were nonprofits serving or led by people of color impacted by the pandemic compared with other nonprofits?

Racial Equity and Nonprofits

Using data from the 2021 Community Impact Survey,In August 2021, the community development function of the Federal Reserve System, together with eight national partners, administered the Community Impact Survey. One of the goals of this survey was to better understand the pandemic’s ongoing impact on community-based organizations, most of which are nonprofits. This essay focuses on respondents who reported that their nonprofits primarily serve low- and moderate-income communities; the number of these respondents totaled 2,561. this research found several disparities among nonprofit organizations in the U.S. during the pandemic.Despite some limitations to the analysis, the survey included subjective disruption measures from respondent organizations that were still active 18 months into the pandemic.

First, disparities arose in funding sources. Nonprofits serving people of color and nonprofits led by people of color were less likely to see increases in government funds relative to what their counterparts received. In addition, nonprofits led by people of color were disadvantaged compared with nonprofits not led by people of color in obtaining funds from foundations. Racial disparities in philanthropy are not new. Organizations led by people of color might face greater challenges because of a lack of interpersonal relationships with executives in philanthropic organizations and a general lack of trust for having the capacity to implement programs. A 2017 Race to Lead report found that organizations led by people of color faced additional challenges in securing funding (PDF) compared with other organizations.

Second, financial volatility was accompanied by a substantial increase in demand for services, leading organizations serving and led by people of color to be more likely to report significant disruptions compared with other nonprofits. Similarly, earlier work has shown that although the pandemic had a major economic impact on all communities, communities of color were affected disproportionately.

These two findings together are important because government relief measures during the pandemic reduced poverty, helped people access health care coverage and diminished hardships like the inability to afford food or meet other basic needs. However, unequal access to government relief and recovery plans explained almost 30% of the disruption gap between low- and moderate-income communities of color and white low- and moderate-income communities. Resources targeting communities most in need and organizations providing services to them could help reduce such disruptions.

Resilience during the Crisis

Resilience refers to the ability to withstand adverse conditions while continuing to fulfill an essential function. Given their disproportionate experience of both greater demand for services and higher financial volatility, one would expect nonprofits led by people of color and nonprofits serving people of color to have less capacity to provide services. However, organizations serving people of color were less likely than other nonprofits to report a reduction in their ability to provide services, and organizations led by people of color maintained requested service levels in step with other nonprofits.

Based on the results highlighted above, one could argue that nonprofits serving and led by people of color showed great resilience. They were able to maintain their capacity to provide services while facing increased demand and financial volatility.While this paper is silent about what strategies these nonprofits used, volunteers and informal networks might have offered a buffer for organizations to counter turbulences.

Beyond Crisis and toward Equity

Given the important role that organizations serving people of color and organizations led by people of color play in historically underinvested communities, hurdles they face in developing and deploying resources may have implications for economic equity.

Support for these organizations from government, private industry and foundations could help ensure that they can continue to have a pivotal role in relief to and the recovery of communities of color during economic crises or other emergencies, such as floods, hurricanes, earthquakes, epidemics or pandemics.

Notes

1. We defined organizations as led by people of color if the answer was “yes” to this survey question: “Is the entity you represent led by a person of color?” Organizations were defined as serving people of color if the answer was “yes” to this survey question: “Does the entity you represent primarily serve a community of color?”
2. In August 2021, the community development function of the Federal Reserve System, together with eight national partners, administered the Community Impact Survey. One of the goals of this survey was to better understand the pandemic’s ongoing impact on community-based organizations, most of which are nonprofits. This essay focuses on respondents who reported that their nonprofits primarily serve low- and moderate-income communities; the number of these respondents totaled 2,561.
3. Despite some limitations to the analysis, the survey included subjective disruption measures from respondent organizations that were still active 18 months into the pandemic.
4. While this paper is silent about what strategies these nonprofits used, volunteers and informal networks might have offered a buffer for organizations to counter turbulences.