Five Insights About Donors of Color

Five Insights About Donors of Color

Oct 12, 2021 Patrice Onwuka

Charitable giving has a long and rich history among communities of color in the U.S. Black, Hispanic, Asian and Native American groups have supported each other with their time and treasure for generations. Like all Americans, donors of color come together to address the immediate and long-standing needs of their communities. However, the means they use are not always fully captured by philanthropic research.

A new report by the Lilly Family School of Philanthropy, Everyday Donors of Color: Diverse Philanthropy During Times of Change, sets out to fill in gaps in this research. Through an examination of the response to the pandemic and social justice movements in 2020, researchers explored the methods and motivations for donors of color as well as the destinations of their dollars and time. 

People of color share common goals of wanting to support friends and even strangers who are struggling with difficult circumstances, as well as the desire to uplift their people as a whole. Key areas where people of color devote their giving to advance philanthropic aims are education and economic empowerment. However, non-white donor groups differ in how and where they give compared to each other, white donors and donors overall. For example, in comparison to other groups, some donors of color prefer to give more goods and volunteer time versus giving cash. Religious centers, such as churches, also receive more charitable dollars from some minority groups, who contribute at a higher rate to these institutions than donors overall. 

These are just a few of the insights into giving by communities of color highlighted in this report. The value of this research is that it can help philanthropic groups and individual donors uncover and support charitable efforts already underway, especially those that demonstrate impact. For example, if African-American churches are trusted sources within Black communities both to receive funds and to give support, then donors may find it more strategic to partner with them on projects and to fund initiatives where everyone’s missions and goals align.

Here are five key insights about donors of color:

  1. Faith and self-help are the strongest motivations for why donors of color give.

For Black donors, giving is closely tied to their faith and religious beliefs. The church has been a destination for those philanthropic dollars, a source of support for social services, education and work, as well as the backbone of civil rights movements of the past. The report also says that minority groups use philanthropy as “an economic weapon to fight against racial oppression of racial or ethnic groups,” a form of self-help that is a big motivator for minority groups. In addition, people of color form mutual aid groups to share resources with one another. Finally, they believe that their giving can “level the playing field” and provide better pathways to success for younger generations.

  1. Education funding is fundamental

Minority donors, especially African Americans, view education as critical to the future of their children, economic mobility and cultural upliftment. Higher education is a popular destination for Black philanthropic dollars. Asian Americans also value education highly, and that is reflected in their giving to higher education. In general, donors who want to amplify the charitable efforts of communities of color should look at such educational efforts. While the report did not dive deeply into the kinds of institutions and organizations that minority groups support, Historically Black Colleges and Universities (HBCUs) are likely popular at the higher-education level. At the K-12 level, efforts to expand school choice may be ways for non-minority donors to make a difference.  

  1. The more personal the better. 

Blacks and Hispanics give to people they know at higher rates than their white counterparts. People of color give to strangers at higher rates as well. Interestingly, people of color avoid what the report calls “mainstream philanthropic institutions” out of distrust and to avoid paying nonprofit overhead costs. Instead, they provide help directly, locally and immediately through giving circles and online platforms.

  1. Technology breathed new life into mutual aid.

Mutual aid in the Black community goes back as far as the colonial period in the U.S. Freed slaves paid fees to support their families after their death, and to help illiterate and untrained individuals find work. These voluntary associations grew over time to become cultural centers for Black and immigrant communities, funding every life cycle event such as birth, sickness, child care, education, retirement and funerals as well as life insurance and disaster relief. 

During the pandemic, Black and Hispanic donors used technology to tap into the trust, cooperation and reciprocity of mutual aid societies to create formal and informal opportunities to give, through crowdfunding platforms and online payment apps, and using social media to reach people. They raised funds, recruited volunteers and organized activities such as food and cleaning supplies drives, paying rent and delivering care packages to the elderly. Social media both spread the word and set the narrative that this was the community helping itself.

  1. Time and talent are major for minority donors.

According to the report, “after controlling for important factors that impact giving, such as education and income, there is no statistically significant difference in giving rates across racial and ethnic groups.” However, there are differences in how these racial groups give. Asian American and Black households donated goods to others at higher rates (both 71%) than they gave monetary gifts (46% and 65% respectively). Hispanic households gave money at a higher rate (67%) than they donated goods (65%). All non-white groups volunteered, gave through crowdfunding and social media, and donated blood at higher rates than white donors. This underscores that people of color may not give as much in cash as their white counterparts, and that their giving may not be captured by traditional philanthropic research because it’s going directly to individuals.  

These insights aside, much of this report is focused on charitable giving and the advancement of social justice causes that garnered national attention following the murder of George Floyd.

This report and similar new research aim to shift attention to social justice philanthropy and advocate for counting philanthropic giving targeted to social justice causes as an overlooked aspect of minority charitable giving.

Researchers note, “Recent movements for racial justice, as well as an understanding of the historical and cultural origins of philanthropy in diverse communities, require a more expansive definition of giving than has traditionally been used in measuring charitable donations. This definition encompasses the breadth of individuals and institutions to which donors may give in their efforts to advance racial justice, extending beyond the contributions to 501(c)(3) charitable organizations that many data sources are limited to.” They consider social justice philanthropy as giving to individuals and families affected by or addressing racial injustice (including through crowdfunding sites like GoFundMe and mutual aid groups), grassroots organizations addressing specific issues related to racial equity and nonprofits focused on addressing broader issues related to racial equity and disparities in areas such as education, health or environment. 

The report found that giving by all Americans to these categories rose from 13% in 2019 to 16% last year. Asian Americans and Blacks were the most likely to give to these causes. Counting their definition of social justice giving may be reasonable if it provides a more holistic picture of giving in minority communities. What we should be wary of are critiques that philanthropy doesn’t do enough to address racial inequality based solely on data that only counts grantmaking tagged with cherrypicked keywords such as “systemic racism” in grant descriptions or referring to specific races in the grant recipients’ information.

American Enterprise Institute Senior Fellow Howard Husock recently highlighted how problematic this is, noting, “A grant for direct services in a community of color, such as for a library in a low-income community, health clinic, parent-teacher group, scholarship fund or even a charter school, would not qualify unless it mentioned those specific code words, which implicitly favor advocacy over direct service.” It’s possible that donors of color seek out social justice organizations when they want to support advocacy for policing reform, but also give to their church’s college scholarship program. Only one is counted toward social justice even if both advance the goals of advancement and opportunity.

This report tries to provide a broader view of giving by minorities and recognizes that social justice philanthropy is increasingly popular among minorities, but it’s not the only way they achieve their goals of uplifting others in their communities.

Overall, this report confirms what many of us donors of color have always known: we contribute to the rich tradition of giving in America … even if we do so in untraditional ways.