$40 million from Ballmers to help New Profit and Echoing Green to build Black leadership in the economic mobility field
New Profit and Echoing Green are partnering with Ballmer Group to address chronic underfunding of Black-led nonprofits due to racialized disparities. The goal: address an undercapitalized market and invest in Black leadership to spur innovation and improve economic mobility.
The grant will fund a five-year initiative to build leadership and sustainability of Black-led organizations focused on economic mobility. Collectively, the seed funding from Ballmer Group will allow New Profit and Echoing Green to support 110 Black-led organizations in the U.S. The nonprofits will receive both capital and operational support to help spur innovative solutions and provide Black leaders with the tools that they need to scale and achieve their missions over the long-term.
With these grants, Ballmer Group builds on a previous approach of using capital to identify untapped opportunity and innovation that exists because of racialized funding gaps. Last year Ballmer Group made a market-driven investment in Black fund leaders and now seeks to address a similar nonprofit funding barrier that sees Black leadership too often overlooked.
Black-led organizations consistently receive less funding than white-led organizations. The result: more than half of Black-founded nonprofits have an annual budget below $250,000, and very few Black-founded orgs have an annual budget above $5 million. This means that Black-led organizations more often fail to reach scale or potential at a greater rate because of systemic barriers, leaving key innovations and leadership untapped.
Ballmer Group Director of Community Impact Eshauna Smith shared the following about why Ballmer Group is taking this important step as a funder:
“Among national nonprofits focused on economic mobility, there is an observable and stark lack of Black founders and leaders running at-scale organizations. This is due in part to the fact that start-up and smaller organizations poised to scale aren’t making it to the top. Research explained why: too often Black-led nonprofits are overlooked in the funding race, creating an ever-widening gap.”
“As a national funder, we have the opportunity to support larger, national organizations that are helping communities at scale. However, what we are seeing is that due to race-based funding gaps, many Black-led organizations that wish to scale are unable to do so. This is a serious problem with implications for both the economic mobility sector and the communities we seek to serve. The good news is that race-based funding gaps are addressable. There are incredible opportunities for funders like us to step up, and we are excited to take this first step.”
Ballmer Group is committing more than $40 million of seed funding over five years to help New Profit and Echoing Green address this issue. Ballmer Group is partnering with New Profit and Echoing Green because of their expertise in identifying leaders and organizations with the potential to scale. Utilizing these two organizations as intermediaries acknowledges the power of proximate leadership. Both New Profit and Echoing Green are led by Black leaders and have more than 60 years of experience between them.
The effort will build the capacity and sustainability of Black-led organizations focused on economic mobility. The commitment employs a two-part strategy to address early (“start-up” and “proof of concept”) and mid-stage nonprofit growth (“early scaling”). Echoing Green and New Profit will support 110 high-potential early- and mid-stage Black-led organizations over five years. Organizations will receive a combination of direct capital and capacity-building supports to help them grow and achieve their missions over the long term.
This partnership recognizes that Black leadership is essential for the economic mobility sector. In general, diverse leadership teams, particularly those with lived experience with the communities they serve, achieve better outcome. These grants represent a powerful opportunity for philanthropy to address historic funding inequities, support Black leaders, spur innovation, and build nonprofit capital through trusted intermediary partners, Echoing Green and New Profit.