Black-Led Nonprofits Struggle as 2020 Racial Reckoning Funding Fades Two Years Later

NEW YORK — The outpouring of financial support for Black-led nonprofits following George Floyd’s murder in May 2020 promised transformative change. Corporations pledged billions to address racial inequities, foundations expanded grants to minority-serving organizations, and individual donors flocked to causes addressing systemic racism. Yet a sweeping new analysis by Candid, a leading nonprofit research firm, and ABFE—a Black philanthropy advocacy group—reveals that the vast majority of these funding gains were short-lived. Between 2020 and 2022, only a narrow slice of large Black-led nonprofits experienced temporary increases in donations, while smaller organizations—those most embedded in marginalized communities—saw little to no lasting financial relief. The findings underscore a persistent gap in philanthropic equity, with many Black-led groups now grappling with the dual challenges of rising operational costs and dwindling support as broader economic pressures mount.

The Promise and Reality of 2020’s Philanthropic Surge

In the immediate aftermath of Floyd’s death and the nationwide protests it sparked, the nonprofit sector braced for a historic infusion of capital. Major corporations such as Bank of America, Apple, and Nike announced multimillion-dollar commitments to racial justice initiatives. Foundations like the Ford Foundation and the Open Society Foundations pledged to direct more resources to Black, Indigenous, and other communities of color. Even small donors participated, with platforms like GoFundMe reporting a 1,400% increase in donations to racial justice causes in the weeks following Floyd’s murder. Yet by 2023, the euphoria had largely evaporated. The Candid-ABFE study, based on an analysis of 4,000 nonprofits, found that while 62% of large Black-led organizations (annual expenses exceeding $1 million) received some form of increased funding between 2020 and 2022, only 15% of small Black-led nonprofits (those with expenses under $1 million) saw similar gains. For context, Black-led nonprofits make up just 6% of all nonprofits in the U.S. but serve disproportionately high numbers of low-income and minority communities.

A Fractured Recovery: Why Large Nonprofits Fared Better

The disparity in funding outcomes is rooted in long-standing structural inequities within philanthropy. Large Black-led nonprofits, such as the NAACP or the Thurgood Marshall College Fund, often have established relationships with foundations and corporate donors, allowing them to weather fluctuations in giving. These organizations typically receive multi-year general operating support—grants that can be used flexibly for staff salaries, rent, or other core expenses. In contrast, smaller nonprofits, which make up the backbone of community-based advocacy, often rely on project-specific grants that expire after one year. According to the report, only 34% of Black-led nonprofits received general operating support in 2022, compared to 54% of their non-Black counterparts.

“Foundations didn’t have relationships with Black organizations of any scale prior to 2020,” said Susan Taylor Batten, CEO of ABFE. “When the protests happened, they scrambled to find grantees, but those relationships weren’t built on trust or long-term investment. It was transactional at best.”

The Burden of Unreliable Funding: Stories from the Frontlines

For many Black-led nonprofit leaders, the post-2020 funding surge felt like a mirage. Asiaha Butler, CEO of the Resident Association of Greater Englewood (RAGE) in Chicago, saw her organization’s funding pool explode from a handful of consistent supporters to more than two dozen new donors in the summer of 2020. Butler, who co-founded RAGE 15 years ago to combat negative narratives about her predominantly Black neighborhood, described the influx as a “curse in disguise.”

“We started seeing this revenue and thinking we were gaining really great relationships with funders,” Butler said. “But really, those priorities shifted quickly. By 2021, half of those new funders were gone.”

The pattern mirrored struggles faced by other small nonprofits. Kandee Lewis, CEO of the Positive Results Center in Los Angeles, which supports survivors of domestic violence, recalled receiving checks from corporate donors eager to align with the racial justice moment. Yet most of these gifts were one-time donations, with no follow-up or commitment to ongoing support.

“They were so busy trying to figure out who was who that they didn’t really take time to get to know people,” Lewis said. “The funding came because we were Black-led, not because they understood our work.”

The Hidden Costs of ‘Trend Funding’ and Transactional Philanthropy

The Candid-ABFE report highlights a troubling trend in philanthropy: the rise of what experts call “trend funding”—short-term grants tied to current events rather than long-term mission alignment. T’Pring Westbrook, a nonresident fellow at the Urban Institute’s Center on Nonprofits and Philanthropy and co-founder of a consulting group for small nonprofits, argues that this approach undermines sustainability.

“Maybe during Black History Month there will be a funding campaign,” Westbrook said. “But the thing about a campaign is it doesn’t build sustainability. It’s performative.”

The Administrative Burden on Small Nonprofits

Small Black-led nonprofits face additional barriers beyond inconsistent funding. Many foundations require grantees to submit detailed reports—sometimes weekly or monthly—detailing how funds are used. For organizations with limited staff, this administrative load can be crippling. Jaleesa Hall, founder of Raising A Village Foundation in Washington, D.C., which focuses on educational equity, described the process as “the juice not being worth the squeeze.”

“Small, Black-led nonprofits simply aren’t in those rooms to begin with,” Hall said. “Foundations haven’t cracked how to find potential grantees outside of their existing networks. We’re constantly going on first dates with new funders and hoping someone will invest in us.”

Policy Shifts and the Erosion of Early Gains

The philanthropic retreat coincided with policy changes that further strained Black-led nonprofits. During the Trump administration, federal funding for diversity, equity, and inclusion (DEI) initiatives was slashed, and the future of social service programs became uncertain. The nonprofit sector’s struggles deepened as agencies cut staff and froze grant cycles. Cliff Albright, co-founder of Black Voters Matter, noted that the organizations now tasked with addressing rising healthcare costs and food insecurity are the same ones that were promised support in 2020.

“We’re literally being asked to do more with fewer resources,” Albright said. “The post-George Floyd moment created a false sense of security. Now, we’re back to square one.”

Key Takeaways: The Lingering Crisis in Black-Led Philanthropy

• Only a minority of large Black-led nonprofits (15% of small groups) saw temporary funding increases post-2020; most gains were fleeting.
• Black-led nonprofits received general operating support at half the rate of other nonprofits (34% vs. 54%), hindering long-term sustainability.
• ‘Trend funding’ and transactional philanthropy prioritize optics over impact, leaving community-based groups vulnerable to funding cliffs.
• Administrative burdens and lack of existing relationships with funders disproportionately harm small Black-led organizations.
• Policy rollbacks and economic pressures have compounded the challenges, forcing nonprofits to rely more on public funding.

What’s Next? The Path to Equitable Philanthropy

While the Candid-ABFE report paints a grim picture, there are signs of progress. The philanthropic sector has begun embracing trust-based philanthropy models, which emphasize multi-year general operating support and reduced reporting requirements. A 2022 survey by the Center for Effective Philanthropy found that 68% of foundations had adopted at least one trust-based practice, up from 40% in 2018. However, Black-led nonprofits have largely been excluded from these shifts. Susan Taylor Batten of ABFE argues that foundations must do more to build authentic, long-term relationships with Black organizations.

“We cannot move the mission of racial equity in this country if we do not evolve this sector,” Batten said. “Foundations must stop treating Black nonprofits as charity cases and start treating them as partners.”

The Human Cost: Delayed Dreams and Unmet Needs

The funding shortfall has had tangible consequences. For Asiaha Butler, the delayed dreams of a nearly $7 million capital project in Chicago’s Englewood neighborhood—a 8,800-square-foot building that would house a Black-owned restaurant and workforce development programs—highlight the stakes. Butler secured a $1 million grant in 2023 but described the search for additional funding as “pulling teeth.” Past philanthropic partners withheld support, leaving her to turn to public funds. The City of Chicago provided a $2.5 million grant, and a $1.5 million state award is pending, but the project’s timeline has been pushed back years.

“Things shifted, and so we didn’t want to start soliciting for a capital campaign,” Butler said. “The timing was off. We’re still here, but the resources aren’t.”

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