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Emerging Philanthropy in Communities of Color : A Report on Current Trends

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Emerging Philanthropy in Communities of Color: A Report on Current Trends

Against a background of extraordinary need, we have a record number of new millionaires in this country. Added to that, we foresee an unprecedented ten trillion dollars being inherited by the baby boomers within the next forty years. If we can capture just a small part of that wealth for organized philanthropy, we can help improve and enrich the lives of countless people.     – Dr. Albert Ruesga Director, National Initiative to Promote the Growth of Philanthropy

Introduction
Background
EFCC Key Activities
Findings
Implications and Challenges
EFCC Recommendations
Conclusion
Acknowledgments
EFCC Resource Documents
EFCC Contact Information

Introduction

Within the realm of philanthropy, assets are designated for the purpose of solving complex problems, enriching and deepening cultural traditions, and building upon the wealth of a society to invest in people, communities, and their institutions. Although only one of many culturally benevolent practices, the endowment of foundations, public philanthropies, and specific funds in the United States has been bolstered both by economic conditions and tax regulations that make gifts beneficial to donors and recipients. Generally, those with the most contribute to the endowment of philanthropies, and those with the least turn to those organizations for assistance in gathering the necessary resources to address community challenges.

In recent decades, recipients of philanthropic and nonprofit programs have increasingly come from communities of color. Depending on the scope of an organization’s work, programming may target African Americans, Latinos, Native Americans, and/or recent immigrants from Latin America, the Caribbean, Central America, South America, Africa, or Southeast Asia. As the gap between rich and poor in the United States has grown, many in philanthropic work have come to increasingly characterize people of color as "those with the least."

Yet by any analysis, changes in demographics and the economic circumstances of many groups – including African Americans, Latinos, Asians, and Native Americans – are challenging the accuracy of that perception. As Dr. Ruesga states, the number of millionaires in the United States is on the rise. Among them are corporate executives, authors, entertainers, sports figures, and other successful individuals from communities of color. At the same time, the percentage of African American, Latino, and Asian American households with rising incomes is growing. In the years ahead, the baby boomers in these groups stand to inherit their parents’ holdings as well. And among some Native American tribes, tribal enterprises are improving the economic circumstances of selected groups.

Thus, as the overall number of people in major ethnic groups increases, many individuals continue to need the support of programs and services. Yet, at the same time, many others from communities of color are becoming financially secure and amassing wealth. These changes represent an opportunity to increase the stability and independence of communities of color by finding ways to increase the assets of these communities designated for philanthropic purposes.

Background

In late 1996, the W.K. Kellogg Foundation Board of Trustees approved funds to initiate the exploration of how best to support and expand the resources of communities of color by focusing on the designated funds, philanthropic organizations, and giving practices of four major ethnic groups: African Americans, Latinos, Asian Americans/Pacific Islanders, and Native Americans. The move to learn more about the issues surrounding philanthropic investment in communities of color arose from a pragmatic analysis of some widely accepted facts:

• The philanthropies currently serving most communities are based upon the assets of older, affluent donors, most of whom are Caucasian. And, although foundations and other philanthropic organizations have made strides in diversifying leadership and participation, most program staff and trustees today are also Caucasian.
  
  
• While communities of color are often referred to as "minorities," these groups will constitute a far greater proportion of the population in the future – by some estimates 49 percent by the year 2050. To ensure the stability of philanthropy in the decades ahead, new donors will need to come from communities of color.
  
  
• Discretionary income among members of these groups appears to be growing. Documented increases in home ownership (42 percent increase among minorities between 1994 and 1997), business ownership (among Latinos, Asians, and Native Americans), and the spending power of ethnic groups constitute an important indicator of income increases in these communities. The interest of the commercial marketing sector also reflects the changing status of communities of color and the growing diversity among U.S. audiences. Product marketing, television programming, and popular media targeting Latinos, African Americans, and other groups reflect an evolving culture in which people of color are seen as active participants in "the good life."

The W.K. Kellogg Foundation’s Emerging Funds for Communities of Color (EFCC) Initiative sought to work with other established philanthropic organizations to begin to answer some key questions related to these trends. Questions clustered around three broad points of inquiry:

What are foundations doing, particularly community foundations, to promote philanthropy in communities of color?

The Ford Foundation, Packard Foundation, Kellogg Foundation, and the Council on Foundations individually possess a wealth of experience in promoting philanthropy. They also represent an extensive network of connections to philanthropic organizations in communities through their grantees and members. By forming partnerships among these groups and working collectively, the EFCC Initiative would serve as a catalyst for pooling available information about philanthropy in communities of color and gathering additional data as a baseline for future research and integrated programming within and among philanthropic organizations.

What kind of support would enhance the stability of existing philanthropies and nonprofit organizations targeting communities of color?

In gathering information about communities of color related to philanthropy, EFCC would also have the opportunity to learn about funds targeting communities of color and the organizations they support. Mindful of the changing face of the U.S. population, EFCC would be in a unique position to learn about the capacity of emerging institutions and how best to contribute to their development and stability. This information could inform future programming decisions within partner organizations and among philanthropic institutions.

Who are the prospective donors in communities of color and what are the best ways to engage them?

Working from a belief that communities of color do have assets to bring to philanthropy, EFCC efforts could help determine prospective donor bases and funders within these communities. By identifying leaders within communities of color and crafting a systematic approach to learn from them about giving traditions and patterns, EFCC could contribute to the wider knowledge of philanthropies and nonprofits about future best practices. The process could also address concerns among some in philanthropic circles that focusing on donors and funds from communities of color could fragment philanthropy and foster divisions in the larger community.

Over the past two years, the EFCC Initiative has taken a strategic approach to begin to answer these questions. EFCC has initiated partnerships with major granting institutions and fostered connections among selected grantees in pursuit of information and experience to bring to bear on these questions. In doing so, three basic assumptions were made to focus the work and identify tangible objectives:

First, the funding strategy targeted four ethnicities as "communities of color." In doing so, program leaders from the Kellogg Foundation and partner organizations acknowledged that the term "communities of color" is difficult to define. Within each "community" are many communities. Korean Americans are very different from Vietnamese Americans or Chinese Americans. Mexican Americans are not the same as Cuban Americans or individuals whose fathers and mothers came from South American countries. And among Native Americans, tribal differences distinguish communities and areas of interest. To lump these diverse communities together under a single name – "Latino" or "Asian" or "Native American" – suggests a uniformity among groups that may not exist. But in order to begin the task of mapping an uncharted universe – the giving practices of ethnic communities outside of mainstream philanthropy – accepting such a term, with all its shortcomings, was necessary.

Second, the funding strategy focused on the endowment of philanthropies as a mechanism for strengthening communities of color. Although the four targeted groups have long-established cultural traditions of giving both time and money for charitable purposes, each group evidenced few of the philanthropic endowments that could ensure long-term stability within their communities. EFCC program leaders conjectured that increasing endowments among these communities would reduce dependence on fundraising and grants from outside communities. Building secure endowments would ensure a level of self-determination that few communities of color enjoy today.

Third, the funding strategy presumed that partnerships would be more successful at answering key questions than groups working independently. Through EFCC efforts, the Kellogg Foundation partnered with colleagues in philanthropy and selected planning grantees who worked in coalitions to pursue initiative objectives. Program leaders determined that the time invested in cultivating partnerships would reap greater rewards in the long run. For that reason, the funding effort committed resources to bringing foundation and grantee groups together to collectively explore how to pursue EFCC goals.

EFCC funding proposed work in phases. Initial work included a wide range of information gathering activities to expand what was known about philanthropic practices in communities of color, and identify strategies to strengthen and enhance these practices and related organizations. The funding strategies explored were intended to provide an information base for future EFCC programming and to identify critical grant investment points of leverage. Successful completion of EFCC could inform the common field of philanthropy and specifically guide the effort’s program design.

At this writing, the exploratory work of EFCC is completed. The report which follows details the EFCC process to date, significant findings related to each aspect of this funding effort, implications and challenges highlighted by the findings, and related recommendations for additional research and programming.

EFCC Key Activities

EFCC activities centered around forming and deepening partnerships, gathering data, and selecting and working with coalitions of grantees. The following summaries suggest the scope of work undertaken and detail specific products generated in the course of implementing the Initiative.

Forming Partnerships

The W.K. Kellogg Foundation collaborated with the Ford Foundation and the David and Lucile Packard Foundation, and made a grant to the Council on Foundations to share information, develop a common agenda related to the EFCC Initiative, and share resources to accomplish selected objectives. The partnership among philanthropic organizations produced some notable results:

• Over a period of two years, representatives of the Kellogg, Ford, and Packard Foundations conferred, shared information on missions and funded programs, and worked to develop a common goal for their joint efforts through this program. In the process of defining their intent, they pledged to:

1. Build a more harmonious, pluralistic, and unified society by increasing philanthropic opportunities within communities of color; and
   
   
2. Enhance philanthropic self-determination for communities of color so that they may become increasingly self-reliant, and thus better equipped to participate on an even footing in the broader society.

To accomplish this goal, the foundations collaborated to support aspects of EFCC, particularly with the grant to the Council on Foundations to gather and synthesize information related to ethnic giving practices.

• The Kellogg Foundation worked closely with the Council on Foundations to craft a plan for information gathering related to philanthropic activity in communities of color that would draw on the contacts and resources of both organizations. Plan implementation resulted in a wide range of activities, including a review of existing grants; a search of the literature on philanthropy in communities of color; interviews with staff and trustees of funds; focus groups with fundraisers and leaders from community foundations and minority funds; and production of a series of resource documents on the giving practices and cultural traditions of each group (African Americans, Latinos, Asian Americans, and Native Americans). A description of each report and methods used is provided below; related findings are included in the following section. A complete listing of documents is provided at the conclusion of this document.

Gathering Information

Acknowledging that no existing literature provides an analysis of current giving patterns within the four targeted groups, EFCC design required a thorough search of available data on foundations and communities of color to begin the process. At the same time, EFCC inquiry turned to new sources of information (interviews, focus groups, and networking meetings) to gather a body of knowledge related to philanthropy in these communities and identify promising strategies for deepening and solidifying philanthropic practices within diverse cultures. These unique methods generated a number of useful products:

Foundation Center Grants Research Summary – A search of grants made by U.S. foundations between 1988 and 1995 was completed to identify what grants were being made to enhance endowments or increase philanthropy in communities of color. The search was based on the Foundation Center Grants Index of 270,000 grants made by private, corporate, and community foundations. Using the criteria of grants made to build or support endowment, foster research about philanthropy, or provide technical assistance related to increasing philanthropy, the search produced 170 records of grants for at least $10,000. By reviewing the stated purpose and granting institutions of each of the 170 grants, analysts were able to delineate current funding practices related to EFCC objectives.

The Roper Center Secondary Data Analysis – The Roper Center examined the raw data of recent national surveys to compare what was known about giving practices of targeted groups in relation to giving practices of the general population. Although the samples of some targeted groups were too small to make statistically significant observations (or, in some cases, nonexistent), the analysis was a first look at giving patterns relative to income status, and identified some unanswered questions and notable gaps in data to guide future inquiry.

Selected Foundations’ Case Studies – To learn more about the status of funding made to groups targeted by the initiative and designated ethnic funds, the Council on Foundations interviewed staff from 13 community and private foundations with assets of more than $100 million. The interviews represented a geographic and programmatic mix of community and independent foundations to further define the level of financial commitment and general interest in promoting philanthropy in communities of color.

Council on Foundations Report – As the basis for this comprehensive report, the Council on Foundations surveyed 72 community foundations with at least one fund identified as being by or for ethnically diverse communities. In addition to the survey, a series of interviews was conducted with top administrators from 12 foundations. A focus group of selected community foundation staff convened at the fall 1997 Conference of Community Foundations further expanded information from the surveys and interviews – especially related to motivations for giving, types of gifts, and outreach to nontraditional donors. The document summarizing this inquiry and analysis also includes questions and feedback from a presentation of the data at a spring 1998 networking conference.

Council on Foundations’ Reports on African American, Latino, Asian American, and Native American Giving Practices and Existing Philanthropies – In-depth interviews with an array of major donors from each ethnic group and staff of nonprofit organizations serving communities of color supplemented a detailed review of the literature in these four reports. The result is a series of documents that synthesize what is known about historical giving practices, current philanthropic activities and traditions, attitudes toward giving, and community readiness in each of the four targeted groups.

Working with Planning Grantees

As information was being gathered across communities and philanthropic organizations, the work of EFCC grantees offered a parallel track for looking intensively within communities of color. Planning grants were made to existing and newly-formed coalitions – coalitions of organizations that would provide specific linkages within groups and broaden the scope and utility of what was being learned through EFCC. Although the number of planning grantees was too few to represent the tremendous diversity among all communities of color, the operating experiences of EFCC grantees complemented the data gathering effort, and provided a mechanism to begin to identify issues common to nonprofits and philanthropies working within these communities.

• Kellogg Foundation program leaders worked with coalitions and partnerships among EFCC grantees to initiate collaborative planning. The Kellogg Foundation invited competitive proposals, and selected groups representing the most viable partnerships. Each funded group developed an independent approach for meeting EFCC information gathering objectives within their respective coalitions. A description of each coalition and the methods used to pursue objectives is provided below. Significant findings from grantee reports are included in the following section.
  
  
• Grantees also participated in a series of networking meetings to exchange information and learn from colleagues working in other communities. The organizational and interpersonal links within coalitions were supplemented by linkages among coalitions. EFCC networking meetings deepened connections between groups and fostered another layer of activity and learning. Grantees acknowledged that their coalitions were at varying stages of development with very different challenges and capacity. However, the synergy that came from joint planning, common interests, and a sense of shared purpose confirmed themes across groups and contributed to EFCC findings.

The Associated Black Charities of New York and its two partner organizations, Associated Black Charities of Maryland and the African American Legacy Program of Detroit, Michigan, worked together to identify, analyze, and share best practices for strengthening endowment development in African American nonprofit organizations. Their collective approach involved a four-step process for understanding the experience of African American nonprofits and documenting findings. The Partnership for African American Endowment Development they formed moved to: 1) initiate a series of focus groups to learn from African American nonprofit executives; 2) survey nonprofit organizations from Detroit, New York City, Maryland, and national organizations; 3) review literature related to the topic; and 4) create a National Advisory Council consisting of African American philanthropists, foundation executives, and influential others.

The Latino Fund Collaborative joined El Fondo de Nuestra Comunidad of St. Paul, Minnesota; the Greater Kansas City Hispanic Development Fund in Missouri; the Hispanic Community Foundation of San Francisco, California; the Hispanic Fund of the Community Foundation of Greater Lorain County, Ohio; the Latino CORE Initiative of the Hispanic Federation in New York City; and the United Latino Fund of Los Angeles, California. Through EFCC, the six funds of the Latino Fund Collaborative compared history, structures, procedures, and organizational and economic status; reviewed Latino-focused fundraising methods; assessed capacity-building needs and endowment readiness; and investigated economic viability. Their collaborative work also produced a set of benchmarks needed to make each fund "endowment ready."

The Asian Pacific American Community Fund of San Francisco, the Asian American Federation of New York City, and the Asian Pacific Community Fund of Los Angeles conducted a series of intensive interviews to learn about organizational approaches to fundraising, other institutions focused on endowments, and motivation in giving among key donors. Objectives common to the three partner organizations included identifying potential donors, board development, and assessment of each organization’s capacity to increase endowments. In the course of their joint efforts, fund partner organizations identified common challenges to building endowments, assessed organizational readiness to move forward, and clarified short-term priorities.

The First Nations Development Institute of Fredericksburg, Virginia, an emerging fund for tribal communities, worked with the Hopi Foundation of Hotevilla, Arizona, an independent tribal nonprofit serving Hopi tribe members. Their common goal was to lay the groundwork to expand the number of Native funds and tribal philanthropies serving their communities. The work expanded networks within Native funds, clarified contextual factors that affect their work, and identified infrastructure needs and long-term issues related to endowment development. In addition, the Native American EFCC grantees linked with First Nations’ Eagle Staff Fund and the Native American Rights Fund, and initiated outreach to gaming tribes and other influential groups.

Two years of information gathering through research, analysis, discussions, interviews, focus groups, and meetings underscored current trends and assumptions, uncovered new information about philanthropy in communities of color, and raised some questions and issues related to EFCC objectives. Major findings from EFCC activities and products include the following points:

Information on the giving practices of communities of color is not readily available and not the subject of inquiry in any established data-gathering effort at present.

EFCC information gathering efforts confirm that little data is being collected relative to the philanthropic behaviors or attitudes of communities of color. EFCC efforts to gather information as a basis for solidifying and expanding philanthropy in communities of color highlight the need to expand inquiry in this direction.

• Major data collection efforts reviewed in the Roper Center analysis – including the General Social Survey, the National Commission on Philanthropy and Civic Renewal survey, Gallup’s Independent Sector series on Giving and Volunteering, and the National Index of Civic Engagement – did not provide enough data to offer any analysis on Asian American or Native American giving practices. And while the data sets considered produced information about African Americans and Latinos, gaps in what can be drawn from existing surveys are significant.
  
  
• The Roper Center analysis suggests that charitable habits (donations, volunteering) across groups can be sorted by income. Yet no information has been collected on the giving habits of members of major ethnic groups with incomes over $50,000 where greater discretionary income increases the capacity to give.
  
  
• The interviews and focus groups conducted by the Council on Foundations and the research by EFCC grantee coalitions provide strong anecdotal evidence for more rigorous investigation into the philanthropic habits of communities of color. Again and again these sources reported that philanthropies and nonprofits serving communities of color do not have the capacity to gather necessary data about target donors, attitudes toward philanthropy among their communities, or related issues that would bolster endowment efforts.

Promoting endowment in communities of color to strengthen community reserves is a relatively untouched area in philanthropy.

The Foundation Center Grants Survey and the Council on Foundation’s research confirm that no concentrated effort is underway to focus on endowment as a means of providing stability to the philanthropic efforts of communities of color.

• According to Foundation Center records, the Kellogg Foundation and Ford Foundation are among a handful of private foundations making awards to strengthen philanthropy through leadership and provide technical assistance to designated funds or nonprofits targeting communities of color. However, most awards reviewed related to organizational activities. No grants were awarded to establish endowments within communities of color. And the overall number of grants (170 of 270,000 Foundation Center grant records) reinforces the impression that this is an untapped niche for promoting community stability.
  
  
• Interviews and focus groups conducted by the Council on Foundations suggest that among many community foundation leaders and development directors, unfamiliarity with the giving practices of communities of color – and some unease at the prospect of focusing on one group of citizens over another – has resulted in limited exploration of this sector’s potential. However, among foundations currently managing ethnic-specific funds, representatives were able to identify a number of benefits to focusing on ethnic funds, including drawing new participants into philanthropic enterprises, increasing trust among ethnic representatives, and expanding awareness of community issues among foundation boards and staff.
  
  
• EFCC grantees agree that some members of communities of color have growing resources at their disposal. But they also note that no concerted effort is being made to reach out to potential donors in these groups. Rather than fragmenting communities, grantees say they believe that engaging these individuals and groups has the potential to encompass more community members in philanthropic work and strengthen their institutions in the process.

• The experience of EFCC grantees indicates that some communities of color are quick to recognize the potential for focusing on donors in their communities and anxious for opportunities to acquire new tools. In a relatively short period of time and with the influx of modest resources, many EFCC grantees made immediate use of the contacts, expertise, and ideas provided them. For example, building on connections made at EFCC networking meetings, Asian American, Latino, and African American fundraisers in New York City are identifying ways to collaborate and are exploring the possibility of a joint campaign.

Informal forms of charity and immediate needs have first priority in many communities of color.

Across all interviews, focus groups, and research, EFCC information gathering efforts confirm that African American, Latino, Asian American, and Native American communities have strong cultural ties to the practice of "giving back" to their families, neighbors, tribes, churches, and educational institutions. However, giving practices are influenced by significant community needs and personal relationships or contacts.

• Many members of communities of color prefer direct, informal support of children, elders, or groups that reflect personal ties rather than giving to institutions or organized philanthropies. Giving to scholarship funds appears to be the exception to this rule among Native American, Latino, and African American donors, while Asian American donors overall appear to be more comfortable giving to mainstream institutions.
  
  
• The level of immediate need is another significant factor in giving patterns across communities of color. Comments made in interviews and focus groups involving community leaders, foundation executives, and donors underscore a preference for responding to requests related to direct services or a specific crisis rather than institutional appeals. In African American, Latino, Asian American, and Native American communities, those with greater income and security are often called upon to address extreme needs among their family members and fellow citizens. Campaigns for a wide range of charitable services take precedence over capital campaigns or long-term planning.
  
  
• EFCC grantees offered evidence that even among people with increasing income and assets, planned giving is seldom a priority. According to grantee reports, estate planning is less evident in Latino, African American, and Native American communities than in the general population.

Lack of knowledge about endowments and distrust of traditional institutions are equally potent barriers to securing support for philanthropies in communities of color.

EFCC research and inquiry from partner institutions and grantees repeatedly confirms that the concept of permanent endowment is not well understood or accepted in communities of color. In addition to this information gap, many communities of color are wary of traditional institutions.

• Grantees report that philanthropy is sometimes described as an "alien" or "Western" concept – especially among Native Americans, Latinos, and Asian Americans. Few respondents had experience with endowments or understood the possible benefits. Some suggested that mistrust of groups or individuals responsible for funds was an issue.
  
  
• Council on Foundations reports on African American, Latino, and Native American communities identify a general distrust of mainstream institutions and the culture they represent. In the experience of members of these communities, reports suggest, institutions representing the interests and resources of the majority have not traditionally addressed the needs and issues of people of color.
  
  
• EFCC grantees confirm that those with no reason to trust institutions tend to place their faith in the people and organizations closest to them – usually the church or tribal councils.
  
  
• The Council on Foundations report also notes that, despite efforts to increase diversity in the leadership of community foundations, few CEOs are from communities of color. The growth of ethnic-specific funds in community foundations may change philanthropic institutions. But more study will be needed to gauge the impact of these funds and learn whether efforts to diversify leadership within charitable organizations produces greater trust in communities of color.

Communities of color have their own influential institutions, networks, and individuals.

Every form of inquiry through the EFCC initiative confirms that the individual who brings a philanthropic appeal is as important as the appeal itself. Understanding and respecting these channels, and learning what motivates donors from these groups, are essential to strengthening philanthropy in communities of color.

• Roper Center data, the Council on Foundations report, and research and information gathering across targeted communities of color all underscore the fact that personal connections wield great influence in many communities of color. The types of connections, perceptions, and traditions that link people vary greatly within the many subgroups of these communities. But the connections are a crucial variable in working successfully with members of these groups.
  
  
• EFCC grantees identify a range of respected, trusted individuals in their communities. In Native American communities, influential individuals often represent tribal leadership. In African American communities, ministers and church leaders have a tradition of safeguarding the interests of the people. In Latino and Asian communities, family, religious, social, and professional connections may all represent common interests.
  
  
• Examples of these connections at work are offered repeatedly in EFCC documents. In one community, the Hispanic Bar Association and African American Lawyers Association were instrumental in gathering pledges for specific scholarships. In another, the interest and influence of a single businesswoman led to connections with a group of black professional women. Personal appeals made through this network produced an endowment targeting specific community needs. These and other examples bespeak an understanding of what motivates givers from communities of color and a sincere appreciation for the influence and commitment of individuals representing their interests. Grantees suggest that general distrust of institutions can be overcome if respected individuals and networks have a larger role in guiding and implementing charitable efforts.
  
  
• Reports from the Council on Foundations and EFCC grantees identify a variety of motivations for giving unrelated to tax benefits or other economic considerations. Donors of color first take care of those closest to them, and then respond to appeals that address challenges they know well – oftentimes, challenges that mirror their own experiences in becoming successful, respected, or secure in the larger society. Donors of color may have an interest in preserving culture, securing social justice, expanding opportunities for children, or supporting the institutions (churches, colleges, or universities) that nurtured their growth. Understanding what motivates donors, EFCC grantees say, is crucial to building endowments for philanthropies and nonprofits.

Many institutions targeting and serving communities of color lack the infrastructure and capacity to expand into endowment building and secure long-term support.

Although EFCC efforts strengthened connections among grantees and generated a core of information about philanthropy within communities of color, organizational readiness to build on this initial work varies widely. Both Council on Foundations and EFCC grantee focus groups suggest that institutions targeting communities of color may have little capacity to move into a new kind of work – endowment building – without considerable support. Communities, too, are at varying stages of readiness to focus on philanthropic stability.

• Many philanthropies and nonprofits serving communities of color are hampered by organizational constraints. Some EFCC grantees needed support to establish basic capacity (expertise, infrastructure) to begin learning about philanthropy in their communities. Others were settled organizationally, but limited in their connections to others engaged in similar work. While some grantees were ready to learn about different types of fundraising and broadening the scope of their efforts, others needed more education on endowment and philanthropic tools to begin the inquiry.
  
  
• Grantees emphasized that groups within communities of color may have difficulty coming together. Differing history, culture, and interests within communities may present barriers to philanthropic efforts. For example, if the "community" includes Vietnamese, Chinese, Koreans, Japanese, Filipinos, and Pacific Islanders, a united appeal to "Asians" may be very difficult to mount.
  
  
• At networking discussions and in formal reports, EFCC grantees demonstrated great capacity to inform work in this direction, but little capacity to initiate additional efforts with existing resources and tools. In the course of working together, grantees showed that they understand the benefit of networks, but possess few resources to build them. Grantees suggested that they could and would use additional data to reach out to local audiences, but do not have sufficient reserves to gather data. They also suggested that the development and testing of messages targeting endowments from communities of color would enhance efforts to strengthen and solidify philanthropies, but admitted they do not have the capability to develop them at this time.

Fundraisers’ Focus Group In May 1998, the Kellogg Foundation identified a selected group of professional fundraisers to explore their knowledge and work experience in communities of color. This group was selected based on having some part of their management portfolio focused on the management of capital/endowment campaigns in "communities of color." It was also attempted to identify fundraisers who were associated with national multi-client firms. Despite the fact that few of those participating had extensive contacts with communities of color, all were grateful for the opportunity to come together for a focused discussion on the subject. Four points of inquiry framed their discussion: 1. What is known about philanthropy in communities of color? 2. What are the best practices for initiating/enhancing giving in these communities? 3. What, if any, special challenges regarding planned gifts need to be considered? 4. What can be done to enhance philanthropy in communities of color? There was considerable consensus among the participants on the following points: • People of color are giving people – with patterns, manners, and methods that differ from majority culture. • Relatively less is known about Asian American and Native American philanthropy. • African Americans and Latinos tend to use churches as brokers for their giving. • Very little planned giving occurs in communities of color. • To understand and enhance philanthropy in communities of color, fundraising professionals need education. • Successful fundraising must blend traditional methods with the culture and tradition of ethnic community. • People of color should have key roles in any effort to enhance traditional philanthropy. • A comprehensive plan to advance philanthropy in communities of color is needed.

Implications and Challenges

EFCC activities and findings highlight much of what was learned through the Initiative. But an analysis of what was learned in light of current trends points to some clear implications for future programming and challenges facing philanthropic organizations, nonprofits, and other institutions with an interest in promoting stability in communities of color. The implications and challenges identified through EFCC activities cluster around issues of timing, trust, and tools.

Timing

Stakeholders at many levels recognize that focusing on endowment funds may be a well-timed opportunity for communities of color.

Social expectations, corporate downsizing, and public policy trends – especially welfare reform and devolution – are signaling a need for communities of color to gear up even more toward self-empowerment. Among other things, this will mean taking the initiative to nurture, guide, and sustain the philanthropic growth and stability within the respective communities. These changing expectations are rooted in shifting perceptions about who is responsible for improving people’s lives and community circumstances. "Self-help" principles figure as important elements in this age of accountability. Rather than looking to government or corporate resources to solve social problems, individuals, families, and communities are expected to improve their own lots.

Under the circumstances, charitable organizations and nonprofits serving communities of color are feeling increased pressure to address community issues. But with resources primarily focused on operations, their capacity to look beyond immediate needs is limited. In this environment, EFCC’s focus on increasing the available resources and fiscal security of philanthropies serving ethnic populations represents a promising new tool. The notion of building a solid base within communities of color to address community needs today and tomorrow promises an option for getting off the fund-seeking "treadmill" and planning for the long term.

Philosophically, the self-determination that endowment funds would enhance within communities of color has great appeal among donors, community leaders, and nonprofit decision makers alike. Influential individuals in communities of color are looking for ways to secure solid futures for their people, traditions, and institutions. They want to capitalize on the improved economic circumstances of some to build more promising futures for all. The enthusiastic response of these stakeholders throughout the EFCC process suggests that they see endowment building as a timely option for capitalizing on the diverse perceptions, motivations, resources, and linkages of communities of color to strengthen philanthropic and nonprofit organizations.

Trust

Ethnic endowments offer philanthropies access to untapped resources, and communities of color control over their growing assets.

Despite indications of growing wealth among members of communities of color, mainstream philanthropic organizations do not appear to be making a concerted effort to reach out to these potential donors based on their ethnicity or cultural background. Yet EFCC findings underscore that appeals based on ethnicity – funds of and for members of a particular group – have the potential to attract new donors to philanthropy and increase a community’s charitable resources. Understanding and addressing this reticence to focus on ethnic-specific endowments is one of the challenges yet to be faced.

Council on Foundations focus group and interview data indicate that, for some community foundation CEOs and trustees, the appeal of tapping new resources through ethnic funds is overshadowed by the fear of fragmenting the community through ethnic-specific appeals. EFCC findings did not conclusively refute this concern. But they also did not uncover any strong support for it. Findings only point to a longstanding suspicion of established institutions among communities of color and an unfamiliarity and vague unease about approaching donors as members of a specific ethnic group among philanthropies. Without additional inquiry, testing, and analysis, this particular challenge will remain a barrier to expanding endowments in communities of color.

Yet part of the appeal of ethnic funds among donors of color appears to be rooted in trust issues. Potential donors of color are less familiar with planned giving, endowments, and the workings of mainstream philanthropy. Under the circumstances, they are reticent to cede control of their assets to traditional institutions. Endowments to ethnic-specific funds – funds earmarked for issues important to a particular part of the community by members of that community – may be the best way to connect donors of color with institutions, and build mutual trust and respect. In the long run, ethnic endowments, rather than dividing current philanthropic resources, may offer the most promising approach for accessing new funds.

Tools

Additional investment is needed to develop the tools necessary to identify best practices for endowment building in diverse communities.

Endowments represent sustainable funds available to assist communities in addressing their challenges. Ethnic endowments have the potential to strengthen communities of color and provide reserves to tackle tough problems over the long term. However, philanthropies and nonprofits targeting ethnic communities currently focus on securing operating support rather than development. EFCC findings illustrate that these organizations possess promising linkages with existing networks of potential donors. But an influx of expertise and other resources will be needed to capitalize on the diversity of these groups and secure endowments for future stability.

Findings 

Findings suggest that both organizational and donor development support is needed to build on EFCC activities. Systematic data collection, assistance in reaching and educating key audiences, access to legal and financial expertise, training and networking to bring together groups with a common interest in the philanthropic stability of communities of color – all these are needed to position philanthropies and nonprofits to move forward.

In addition to a general need for access to expertise and additional tools, the EFCC experience suggests that organizations at varying stages of readiness require different levels of support and types of guidance. Determining when and how best to assist organizations – and whether connecting groups across regions, ethnicities, or nationwide will produce the best results – are aspects of this process yet to be explored.

Strategies and Possible Tactics

The broad inquiry of EFCC indicates promising directions as well as serious challenges. But additional programming will be required to solidify the philanthropic reserves of communities of color. The strategies and related tactics suggested here focus next steps on actions that would answer a single important question: What are the best practices and tools to support and expand endowment building in communities of color?

Recommendations

Continue to deepen partnerships among major philanthropies to coordinate planning, make the best use of resources, and avoid duplication of efforts.

• Report to partners and grantees at the April 1999 EFCC meeting.
  
• Work with philanthropic partners to plan and implement strategies that may inform future grantmaking to support EFCC program goals and objectives.

Expand what is known about philanthropic practices and motivation among members of communities of color.

• Initiate a national survey targeting members of communities of color to test information gathered to date, and expand the core of information available to philanthropies, nonprofits, and communities of color.

Work with leaders of community foundations to broaden the dialogue about endowment of funds targeting communities of color and donors from these communities.

• Disseminate survey findings as a springboard to engage key stakeholders (leaders in community foundations, decision makers in community organizations, influential individuals and groups representing communities of color including church and business leaders) in ongoing discussion about ways to increase the stability of philanthropies in communities of color.

Create opportunities for joint efforts, networking, and collaborative planning among coalitions and regional entities representing communities of color.

• Through the EFCC meeting scheduled in March, work with grantees to plan future networking and outreach.
  
  
• Sponsor a series of networking/educational meetings to respond to information needs identified by grantees.
  
  
• Create mentoring opportunities to foster leadership development within foundations and emerging funds.

Foster fundraising/endowment training of nonprofit and philanthropic development staff to enhance the expertise available to organizations in communities of color.

• In collaboration with partner organizations, develop and test a mechanism to meet identified educational needs and engage new participants at the state and regional levels.

Work through organizations and networks respected within communities of color to increase understanding about endowment and the benefits of solidifying philanthropies in communities of color.

• Develop targeted strategies for key groups (African American churches, tribal leaders, and others) to expand available information on the benefits of endowment and lay the groundwork for a long-term strategy to expand endowment of philanthropies in communities of color.

Develop and test tools to enhance endowment-building efforts among communities of color.

• Foster the creation of media campaign materials to support awareness raising and public relations goals in support of long-term objectives. The current social, economic, and political context impels organizations and communities to respond to greater needs. However, resources are not increasing fast enough to keep pace with needs. Philanthropic organizations, nonprofits, and other institutions are among those being challenged in this environment. Increasingly they are being asked to do more. Within this context, philanthropies, like other organizations seeking to promote sustainable change, must strive to become more systematic and rigorous in their methods and more strategic and intentional in their modes of support.

Conclusion

The current social, economic, and political context impels organizations and communities to respond to greater needs. However, resources are not increasing fast enough to keep pace with needs. Philanthropic organizations, nonprofits, and other institutions are among those being challenged in this environment. Increasingly they are being asked to do more. Within this context, philanthropies, like other organizations seeking to promote sustainable change, must strive to become more systematic and rigorous in their methods and more strategic and intentional in their modes of support.

The Emerging Funds for Communities of Color Initiative illustrates the power and potential of such a strategic approach. Working through partnerships, timely intervention and provision of modest support have exposed an untried path for capacity building in communities of color, and produced information to guide future programming and inquiry.

The discerning reader of this and related Council on Foundation reports will find compelling reasons to conclude, as we have, that developing the capacity of ethnic communities to expand their philanthropic base will not have a fractionalizing effect. On the contrary, we have uncovered a strong connection among our planning grantees, national fundraising focus groups, major ethnic donors responding to our surveys, and students of the subject that this strategy can have positive effects. They include expanding the pool of both ethnic and other donors to philanthropy. In effect, ethnic-based philanthropic development can benefit the entire population in need, and at the same time strengthen the fundraising capacities of institutions of communities of color.

The fruits of EFCC represent a fraction of what must be learned and developed to strengthen the philanthropic reserves of communities of color. Yet this first effort has served to generate energy, raise awareness, establish and deepen partnerships, and suggest promising next steps. Given the demands of the times and the changing composition of communities across the nation, this initial investment can inform choices for integrated programming within and among philanthropic organizations.

As an element of community stability, philanthropy is as basic to a community’s well-being as education, jobs, housing, and health care. Seen from this perspective, enhancing endowments in communities of color is closely related to efforts fostering diversity, economic viability, and self-determination in fragile communities. Continuing and building on EFCC work may not only prove to strengthen philanthropies, but identify another tool for enhancing community development in communities of color as well.

EFCC Resource Documents

Background:

Chavez, Cynthia A. Rivers of Compassion: Bridging the Philanthropic Divide, a report prepared for the W.K. Kellogg Foundation, November 1994.

Materials Developed Through the EFCC Initiative:

Berry, Mindy L. Native American Philanthropy: Expanding Social Participation and Self-Determination, November 1998.

Chao, Jessica. Asian American Philanthropy: Expanding Circles of Participation, October 1998.

Keiser, Nanette M. Case Study Report: Emerging Funds for Communities of Color, June 1998.

Newman, Diana S. The Role of Community Foundations in Establishing and Growing Endowment Funds by and for Diverse Ethnic Communities, November 1998.

Ramos, Henry A.J. Latino Philanthropy: Expanding U.S. Models of Giving and Participation, October 1998.

Roper Center. Ethnic Patterns In Attitudes To Philanthropy, November 1998.

The Winters Group, Inc. Reflections on Endowment Building in the African American Segment, November 1998.

Wyatt Knowlton, Lisa, and Royster, Gene. Foundation Center Grants Search Summary, October 1998.

Wyatt Knowlton, Lisa, and Royster, Gene. Emerging Funds for Communities of Color, WKKF Board Report, Draft, October 1998.

EFCC Contact Information

Mr. Luis A. Miranda, Jr.
Hispanic Federation of New York City
84 William Street, 15th Floor
New York, NY 10038
PH: 212-742-0707
FAX: 212-742-2313

Mr. Julian Johnson
Executive Director
Associated Black Charities
Suite 915
105 East 22nd Street
New York, NY 10010
PH: 212-777-6859
FAX: 212-777-7904

Ms. Gail Kong
Executive Director
Asian Pacific American Community Fund
Suite 590
225 Bush Street
San Francisco, CA 94104
PH: 415-433-6859
FAX: 415-433-2425

Mr. John Couchman
Interim Director
Diversity Endowment Fund
The Saint Paul Foundation
600 Norwest Center
Saint Paul, MN 55101
PH: 612-224-5463
FAX: 612-224-8123

Ms. Sherry Salway Black
Vice President
First Nations Development Institute
The Stores Building
11917 Main Street
Fredericksburg, VA 22408
PH: 540-371-5615
FAX: 540-371-3505

Ms. Joanne Scanlon
Senior Vice President
Professional Development
Council on Foundations
1828 L Street, NW
Washington D.C. 20036
PH: 202-467-0475
FAX: 202-467-5722

Joel J. Orosz
Program Director

Ricardo A Millett
Director of Evaluation

W.K. Kellogg Foundation
One Michigan Avenue East
Battle Creek, MI 49017
PH: 616-968-1611

FAX: 616-968-0413

Acknowledgments

The Emerging Funds for Communities of Color Initiative represents the work of a great many talented, dedicated individuals. Their contributions in conceptual development, implementation, and analysis are reflected in this and other documents. But in a larger sense, the spirit of joint exploration and inquiry the EFCC Initiative fostered is the product of their collective interests and gifts. Special thanks to:

Our foundation partners:

Michael Selzer, Ford Foundation
Hugh Burroughs, David and Lucile Packard Foundation

W.K. Kellogg Foundation Advisory Committee members:

Sonia J. Barnes, Winnie Hernandez-Gallegos, Octavia Hudson, Valorie J. Johnson, Christine M. Kwak, Robert F. Long, Marvin H. McKinney, Ricardo A. Millett, Joel J. Orosz, Rosana G. Rodriguez, and Frank C. Taylor

Our research partners:

Joanne Scanlon, Council on Foundations, and Consultants
Mindy L. Berry
Jessica Chao
Cynthia A. Chavez
Diana S. Newman
Henry A. J. Ramos

Our Learning Grant consultants:

Gene Royster
Lisa Wyatt Knowlton
Nanette M. Keiser

Editorial staff:

Ricardo A. Millett
Mary B. Cohen
Joel J. Orosz
Sonia J. Barnes
Lisa Wyatt Knowlton
Gene Royster

Print Design:

Robert Slocum, Designworks

 

WKKF Publication Number 811