How Candid hopes diversity data will help aid racial equity

Candid, the major philanthropy research group, is leading a coalition of funders and grantees that want to standardize the collection of demographic information to help enable donations to minority-led groups.

Harnessing such data could help advance racial equity, said Candid’s CEO, Ann Mei Chang, who is launching a nonprofit initiative to amass more such information.

The initiative — dubbed Demographics via Candid, or DvC — hopes to create a straightforward survey that is as widely accessible as a philanthropy’s 990 form for the Internal Revenue Service. If it succeeds, nonprofits would no longer have to provide specialized diversity information for each of its donors. And it would be easier for the philanthropic sector to measure how much money is going to minority-led groups.

“Everybody talks about equity,” Chang said. “But if you don’t have any idea where you stand, you can’t track your progress.”

Corporations and foundations pledged billions for racial equity after the police killing of George Floyd in 2020. But statistics show that philanthropic money flows unequally to white-led and minority-led organizations.

A 2022 survey by the Nonprofit Finance Fund found that white-led nonprofits were more likely than minority-led groups to receive corporate donations. The donations to white-led nonprofits were also nearly twice as likely to be unrestricted gifts, allowing them to use the grants however they see fit rather than for specific programs.

Last month, several major philanthropists — including Melinda Gates’ Pivotal Ventures, Rihanna’s Clara Lionel Foundation and the Ford and MacArthur foundations– issued an open letter seeking more donations for the Black Feminist Fund to correct the underfunding of groups that serve Black women and girls. The fund estimates that only about 0.5% of philanthropic donations go to those groups, even though Black women and girls make up about 7% of the American population.

“Organizations that reflect their communities are far more likely to be successful,” Chang said. “They understand those communities in a way that outsiders can’t.”

Candid’s initiative has so far attracted 36 partners, from local donors like the Lehigh Valley Community Foundation to giants like the W.K. Kellogg Foundation.

PEAK Grantmaking, a nonprofit that’s dedicated to equitable donation practices, was eager to join the initiative, said Satonya Fair, its CEO. PEAK is promoting the survey to its network of 6,000 members and 500 organizations.

“We’re excited to just be an amplifier for what makes sense and to change things that don’t,” Fair said. “Nonprofits already have a lot of work. Don’t make your process be the thing, instead of the core of their mission.”

Kelly Brown, CEO of Viewpoint Consulting, which works with philanthropies, said she believes the initiative will fill an important need.

“The data collection system in the social sector is super, super-fragmented,” said Brown, who is working on the initiative with Candid. “That makes it extremely difficult not only to engage with the data but also to learn from it and to understand it.”

The initiative will ask donors to determine grants based on data collected on the standardized survey, even if it doesn’t contain all the details the initiative would like. It will try to convince grantees, especially at small nonprofits, that filling out the survey is worth the time and effort.

Starting next month, the Kalamazoo Community Foundation, another early partner in the DvC initiative, will require its grantees to fill out the standardized demographic survey and make it publicly available to receive funding, said Allie VanHeest, the foundation’s community investment officer.

The Michigan-based foundation has been working with its 100-plus grantees since last year to prepare for the transition, offering workshops and support services to help collect the information.

“We are really prioritizing racial equity,” VanHeest said. “We hope for and dream of a future where race is not a predictor for quality of life and life outcomes. And we believe that racial equity can be advanced.”

But to measure the foundation’s success as it works toward its goals, it will need deeper demographic information about the organizations it supports, VanHeest said, which is why it jumped at the chance to join Candid’s initiative.

“We’re going to work towards it together,” she said.

She added that in this initial year, her foundation would not immediately disqualify a grantee that had not collected the necessary demographic information.

“We’re still in the learning process with this partnership with Candid,” she said, “and we recognize that our partners are as well.”

Candid is inviting nonprofits to ” join the movement ” at a webinar set for Feb. 14, with hopes of persuading enough donors and grantees to use this survey to bring it widespread acceptance, Chang said. She said she hopes that government agencies will also adopt it as part of their grant applications. She plans to approach them after the initial phase is complete.

“I think you can build momentum for this,” she said. “Our hope is really to work towards a common grant application and common grant reporting to reduce the burden on nonprofits so that they spend more of their precious resources on the important work that they’re doing.”

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