By Robert J. Hansen | OBSERVER Staff Writer
A recent report highlighting Black nonprofits’ economic impact emphasized the need for sustainable government funding for such nonprofits.
The report, commissioned by the Black Equity Collective and based on 2023 data, showed increased funding but noted a subsequent pullback by government and philanthropic sources. Those funding cuts coincided with rising demand, creating a financial squeeze.
The Black Equity Collective aims to empower and strengthen the long-term sustainability of Black-led nonprofits in Southern California.
Black Equity Collective founder Kaci Patterson told The OBSERVER that in the aftermath of the George Floyd protests and the COVID-19 pandemic, Black-led organizations received an influx of funding, mostly from government grants and contracts. Such funding is being cut by the Trump administration.
She said the cuts are having a chilling effect, reducing not only government investment but also philanthropic, and that potential funding organizations “don’t want to be targeted” in the administration’s attacks around DEI.
Patterson said the report’s findings emphasize Black-led organizations’ ability to maximize their limited resources and strengthen communities and local economies by creating jobs, supporting nearby businesses, and investing in the development of future Black leaders.
“We could see these values and assets as well as their contributions playing out, but that is not the prevailing narrative that you hear,” said Patterson, adding that the narrative typically focuses on the needs of Black-led organizations rather than what they provide.
Roughly one third of California’s Black-led organizations were surveyed for the report, which found they employed more than 4,000 people, provided more than $335 million in salaries and paid more than $22 million in payroll taxes.
Many of these organizations also employ individuals that have lived experience that historically caused barriers to employment, such as being formerly incarcerated or homeless. Seven out of 10 respondents currently employ staff who have experienced homelessness or are living in temporary housing.
Patterson noted that because Black-led organizations hire people who often are dependent on government resources, it creates a ripple effect and compounds the economic contributions of these organizations.
“These [employees] are the people who don’t typically have access to jobs and housing and typically are, in some cases, dependent on the state,” Patterson said. “If we have an organization that is actually providing an economic base that’s being reinvested back into the community and then back into the state, then you actually have fewer people who are dependent on the social services that the state is providing.”
Even though 47% of respondents reported a significant revenue increase since the height of the COVID-19 pandemic, 80% of respondents reported that their current staff level remains insufficient.
What’s more, 82% of survey respondents experienced increased service demands from 2023 to 2024. That concerns Patterson because most respondents anticipated further increases in service demands in 2025 – demands that, given funding cuts, very possibly cannot be met.
“When [organizations’] largest sources of funding get pulled back, then in the same way investment had a positive multiplier effect, divestment has a negative multiplier effect,” Patterson said.
Berry Accius, founder of the local organization Voice of the Youth and survey respondent, told The OBSERVER that his organization’s experience closely mirrors what this report laid out.
Voice of the Youth has two full-time employees and four part-time employees. He said that ideally he would have an additional 10 employees to support his summer and after-school programs.
“There is a high need but I am unable to help everyone that calls me,” Accius said. Voice of the Youth receives requests to help with filing lawsuits, mentoring high school students, job placement and even for food and school supplies.
From 2020 through 2023, Sacramento has been able to fund certain organizations that work to prevent gun violence with local, state and federal dollars. In 2020, the city allocated $3 million to expand the Youth Peacemaker Fellowship Program, a program focused on preventing gun violence among young people involved in gangs.
In May 2021, the city provided $1 million to six community organizations for gang violence prevention efforts..
Accius said he received funding for gun violence prevention in 2023 but has not received any more support despite supporting many families who lost loved ones to gun violence in the last two years.
He said that he has had to leverage other contracts and hold fundraisers to sustain his organization the last couple of years.
“For the last year or so it’s really been sink or swim,” Accius said.
Since 2018, Voice of the Youth’s Summer Nights of Impact program has employed 20-30 high school students each summer. This year it lacks the funding to do so.
“I don’t have the capacity to risk not having the resources to make sure I can pay the youth,” Accius said.
The report recommends that the government create conditions for Black organizations to partner effectively on shared goals. One specific recommendation was to ensure invoices are paid on time and to even make advance payments available.
The report found that most Los Angeles nonprofits are not paid on time by their government funders and that they have limited cash. Accius, who received funds for last year’s summer program in December, has had the same experience with the City of Sacramento.
“In reality, I’ve been getting reimbursed for my money,” Accius said.
Patterson emphasized that the report provides a road map for future investment.
“This is not just about social safety nets. This is about an economic safety net for communities and for people who are living on the margins because, by and large, that’s who our organizations are employing,” Patterson said.