Small Foundations Say Equity Is Important, but Few Have Diverse Boards, Study Says

A survey of relatively small foundations found that 37 percent say racial equity is very relevant to their missions, but only 15 percent of their boards include more than one person of color.

“Thirty-seven percent is an anemic number. It should be 100 percent, but it’s a step in the right direction,” said Henry Berman, chief executive of Exponent Philanthropy, which conducted the survey of its members.

The organization, which represents foundations with few staff members, also found that the average smaller foundation has seven board members, and three of them are women. CEOs tend to be female (65 percent), but those women earned on average 85 cents for every dollar their male CEOs made in 2017. Berman said that pay-gap finding mirrors other industries, but he had hoped charities would perform better.

Fifteen percent of small family foundations had people of color on their boards, compared with 35 percent for independent foundations, the study said. Also, a little more than 20 percent of respondents had or were in the process of completing training and employee self-assessments on racial equity. Berman said most of those organizations were in the beginning phases of creating training programs and seminars.

“We’re fooling ourselves if we think throwing money at it will change things quickly. We’re talking about changing centuries of thinking here,” Berman said. There is no one-size-fits-all approach to investing in equity, he added. Future annual reports by Exponent could include qualitative assessments, such as anonymous responses to questions and specific case-studies.

Other findings from the study:

• 84 percent of the foundations surveyed give locally; 26 percent give internationally.
• 25 percent allocated more than three-quarters of their grants budget to one cause, while 23 percent funded six or more. The top causes funded were education (79 percent), human services (68 percent), and health (61 percent).
• 79 percent awarded general operating-support grants, while 69 percent give capacity-building grants. Berman said smaller foundations in their network might be more aware of the challenges of finding general operating support, which may be why the study showed many of them have a strong relationship with grantees.
• 17 percent are engaged in impact investing.