Investments in Racial Equity Need to Move Inland

Governor Newsom meets with Mayor Tubbs and community members in Stockton.

As leaders in the philanthropic community question the ways philanthropy has contributed to racial inequities, there have been many calls to take strong corrective action. But when most funders and policymakers think about racial equity, they tend to exclusively picture coastal cities like New York and Los Angeles, or other large metropolitan areas like Detroit, Chicago, and Atlanta. While it is certainly heartening to see such concentrated attention on advancing racial equity, it would be a mistake to overlook inland counties and medium-sized cities, areas whose rapid population growth, significant racial diversity, and worse health and economic outcomes than coastal areas also demand our attention.

Take, for example, the Inland Empire region of Riverside and San Bernardino County, with its majority Latinx population and a Black population that has grown so significantly in the last two decades that one out of every 7 Black residents in California lives there. But while whites account for just over 30 percent of residents, they are disproportionately represented in the share of good jobs, college degrees, elected office, and nonprofit leadership.

Similar disparities hold true in California’s Central Valley, where rapidly growing Latinx populations are falling farther and farther behind in achieving the American Dream, whether measured by attaining a college degree, having access to health insurance, or getting on a career path that provides upward mobility. Even outside of California, most Black-majority and Latino-majority cities and counties are in non-coastal areas, with life outcomes that lag behind the rest of the country.

By overlooking these regions, philanthropic giving only reinforces these disparities. Nonprofit organizations from inland areas operate on budgets that pale in comparison to their coastal counterparts: while Bay Area nonprofit organizations receive $745 per capita, Inland Empire organizations receive just $31 and San Joaquin Valley just $9. This funding disparity has forced inland nonprofit leaders to address a global pandemic, economic crisis, and the struggle for racial justice with a fraction of the resources of their coastal counterparts. And these regional disparities in California are reflected across the United States, where the promise of the American dream has failed to reach those in smaller metropolitan and rural areas of the country. If we don’t invest in the community-based leaders who are fighting to lift up these inland communities, we cannot achieve equitable or sustainable economic development for all Californians or for all Americans.

We urgently need a playbook for investing in the intersection of racial equity and regional equity.

 

What might such a playbook look like? To find out, the California Governor’s Office, Center for Social Innovation at UCR, and Freedman Consulting conducted a study that included surveys of over 350 nonprofits in the Central Valley and Inland Empire, as well as seven virtual listening sessions that reached over 100 community-based organizations and 55 residents in these inland regions. In addition, we held briefings of our preliminary findings with community organizations as well as statewide, regional, and community foundations.

Here are the recommendations for equitable and sustainable investments that flow out of this research (which we presented in more detail to Philanthropy California, along with a summary of our listening sessions): 

1. Strengthen Nonprofit Ecosystems by Investing Large and Small

Inland communities are already dealing with decades of disinvestment. This is particularly true of organizations led by people of color, who have not benefited from public and private financing to the same extent as their white-led counterparts.

Take, for example, the South Modesto Partnership, an organization mobilizing the residents of underserved neighborhoods in Modesto in support of better health outcomes for the community. Over the past two years the organization has invested in collecting health information from their mostly-Latino residents to address disparities. Yet despite their close ties to their community (and being well-positioned to address the COVID-19 crisis), the organization operates on just $3,000 per year because they cannot get access to grants because they lack the connections to foundation program officers, most of whom are located a several-hour drive away on the coast.

The South Modesto Partnership is not an isolated example. We could tell a similar story about small nonprofits like the Inland Empire Immigrant Youth Collective and even somewhat larger ones like Congregations Organized for Prophetic Engagement (organizing Black populations in San Bernardino County), and Leadership Council for Justice and Accountability (organizing residents in Fresno and Coachella Valley). Organizations led by people of color in the Inland Empire and Central Valley tend to be smaller, under-resourced, and under-appreciated, even when they are the most connected to and trusted by the communities most adversely affected by COVID-19. 

In order to build a nonprofit ecosystem based on community trust and community needs and that supports local problem-solving, philanthropy and government must find new ways to reach organizations led by people of color, whether they are large or small, newer or well-established, big city or inland. They can do so through community foundations that can sub-grant to smaller nonprofits, or through pooled funds like the Sierra Health San Joaquin Health Fund and the Inland Empire Black Equity Fund, which intentionally seek out community leaders as part of their strategy. Foundations need to think more boldly and comprehensively when investing: to ensure systems change, they need to support service providers as well as power builders, and they need to provide as much multi-year and unrestricted support as possible to increase the capacity and resilience of smaller nonprofits.

2. Make Equity a Through-line in All Investments

In the aftermath of George Floyd’s murder, various institutions—from private foundations to large corporations, governments, and nonprofits—have all declared their commitment to fighting anti-Black racism and advancing racial equity. Many have matched their words with financial commitments to support Black-led organizations and others serving racially disenfranchised communities. To make these changes systemic, however, we need to ensure that nonprofit organizations have racial equity as a core value or “through-line,” not just as an optional add-on.

For example, arts and cultural organizations should show not only their overall value but also that they are making meaningful progress in serving and engaging communities of color. Similarly, racial equity should be a through-line in all place-based initiatives, from community health to environmental protection, to workforce development and green innovation. In order to have accountability on these various efforts, nonprofits and funders should arrive at agreed-upon indicators and benchmarks on racial equity, with regular reports to ensure timely progress and assistance where needed.

Funders also need to insist on grantee accountability on racial equity with respect to nonprofit leadership and board membership. Indeed, a recent study of nonprofits in the Inland Empire showed racial diversity and gender diversity as key priorities for senior leadership and board membership. In the short term, foundations can provide support for equity advisors and training programs to support nonprofits in their racial equity journey. In the longer term, however, funders should insist on meaningful progress in leadership diversity as a condition of longer-term support.

3. Invest in Effective Collaboration

Transforming systems is beyond the realm of any single organization, no matter how large or effective. In addition to investing in coalitions of power-building organizations that can aggregate and amplify voices for change from the outside, foundations also need to invest in opportunities for cross-cutting relationships with government agencies and business leaders.

The foundation for strong nonprofit networks is already in place, thanks to deep investments in planning for the 2020 Census: philanthropic organizations and governments poured millions of dollars into community-based organizations reaching out to disenfranchised populations. In many locations, this same Census outreach infrastructure has been mobilized to engage these communities on COVID-19 response.

Funders should invest in strengthening these kinds of “connective tissue”—of relationships, social capital, and goodwill among nonprofits and government agencies—and repurpose them to promote inclusion and equity in community development. In the Inland Empire, for example, Census community partners are building a model of inclusive regional planning called IE RISE, the Inland Empire Roadmap for an Inclusive and Sustainable Economy, which is structuring regional planning in a way that ensures that traditionally marginalized communities are empowered to shape the region’s economic future.

In addition to building on the foundation of Census outreach tables, funders can also replicate efforts to build cohorts of new leaders in rapidly diversifying regions. For example, the New Leadership Network worked for several years in Fresno and Stanislaus County to build stronger relationships across sectors, with emerging leaders at the core. In Fresno these investments helped, in part, to deepen and broaden collaborations across sectors and support the development Fresno DRIVE, an ambitious, multi-year cross-sector collaboration in inclusive and equitable regional development. Foundations should consider investing in these or similar place-based leadership development efforts, like Next Generation Leaders of Color by CompassPoint and customized programs by Rockwood Leadership Institute.

4. Strengthen Funder Ecosystems

Systems change requires greater collaboration not only among nonprofits but also among funders. In order for inland communities to build a broader culture of philanthropy from within, we must invest in home-grown funder networks that build relationships among regional funders, aligning grantmaking on vetted opportunities and offering entry-points for new funders—from “inland curious” national foundations exploring new regions, to family foundations and corporations within each region.

For example, the IE Funders Alliance is a collaborative group of large regional funding agencies that have joined together to increase communication, collaboration, and coordination among regional funders. In recent years, the IE Funder Alliance has deepened its collaboration by establishing pooled funds for Census outreach, COVID-19, and advancing Black equity. These efforts have succeeded in increasing philanthropic funding from outside as well as within, coordinating investments on collective challenges, and incubating new public-private partnerships, including a recent $5 million investment in COVID relief for nonprofits from Riverside County.

Another channel to support better collaboration to advance inland investments is through support for local community foundations by investing in technology to help improve grantmaking, connecting with shared business and fundraising supports, and providing opportunities for matching grants and funds. Additionally, foundations can streamline funding opportunities to inland leaders by making them more accessible, through new and established pooled funds, or by developing a menu of shovel-ready investment opportunities led by engaged inland funders. Trusted, on-the-ground partners can vet projects and even administer funds for new funders. For example, The James Irvine Foundation recently announced a $135 million commitment to regional grantmaking and The California Endowment is announcing a new investment strategy this fall that advances systems change in inland areas, building on a decade of over $150 million invested in the Central Valley and Inland Empire. Both are committed to sharing insights and investment opportunities that can complement or scale up these important infusions of philanthropic capital in inland areas.

5. Promote and Sustain Community Development Innovation

Finally, as inland communities seek to build plans for economic development that improve health outcomes, increase college attainment, and create higher-paying jobs, we must ensure that racially diverse community-members are leading the way.

For example, the Fresno DRIVE initiative made significant strides in inclusive regional development by bringing together a diverse group of over 100 community leaders. The state has committed to $2 million to support the initiative and the James Irvine Foundation recently announced an initial investment of $15 million that specifically advances racial equity by boosting economic mobility among communities of color in the metropolitan area. Other examples of inclusive, equitable and sustainable efforts include Reinvent Stockton that has introduced innovative solutions to racial equity including universal basic income, the Pittsburgh EcoInnovation District plan that centers racial equity alongside innovation and sustainability, and the IE RISE effort offering a 10-year roadmap for investments in equity and sustainability.

The success of these efforts will depend on governments, employers, and philanthropy all investing together and making sure that community vision and voice remain central. For example, the State of California is helping to ensure that community voices remain central to initiative design and investments. Governor Newsom’s deputy regional directors such as Maria Herrera and Molly Wiltshire, both of whom have deep roots in their communities, have organized and participated in hundreds of community sessions in the Central Valley and Inland Empire this year (including by supporting this research project).

State government grants can also help build resilience for the most vulnerable inland communities, who are also likely to have the least resources to adapt to risk. Just this week the California Strategic Growth Council announced investments in Stockton for $11 million and in Riverside for $31 million to promote resilience in these communities through projects addressing affordable housing and air pollution. Such investments are ripe for partnership with philanthropy, who can provide the nimble innovative capital to support government grants.

Finally, local governments also play an important role. They can adopt new contracting best practices that give preference to local providers and provide up-front payments on critical services. Private and philanthropic partners can also build relevant local capacity through aligned investments with local government in workforce and business development. Finally, local governments can follow the lead of Riverside County, which has entrusted the IE Funders Alliance to administer nonprofit assistance on COVID relief, setting up the potential for more public-private collaborations in the future.

Conclusion

There are many important lessons that flow out of inland California that are relevant for the rest of the country. This region exemplifies many of the country’s challenges, with people feeling as if they have been left behind, whether based on race or geography. But it also represents some important innovations that merit greater investment and replication. If we can double down on investing in leaders of color, and particularly those living in geographically under-represented areas, and give them a seat at the table from the stages of agenda-setting and design, through implementation and redesign, we will make tremendous progress towards building an equitable and sustainable future for all.

Read more stories by Karthick Ramakrishnan & Kathleen Kelly Janus.