The report, “California Black-Led Organizations: Strengthening California’s Economy and Community Survey,” shows how such structures, despite being underfunded, are key economic drivers that pay taxes, provide jobs, patronize businesses and stimulate local economies, especially economies of color. In fiscal year 2023, the organizations in the survey employed more than 4,000 people and paid $22 million in payroll taxes and $335 million in salaries. A vast majority of respondents use Black-owned vendors for purchases, hire locally and bank with Black-owned or regional banks and credit unions, fueling a “multiplier effect.” 

This isn’t new, but the report documents for the first time the business-friendly effects of these organizations that are typically overshadowed by their social missions. Patterson said it’s time to acknowledge these organizations’ full value, and to fund them accordingly.

“We often hear about moral reasons to invest in Black communities — there’s disparity, disproportionate harm, marginalization — to draw investment,” she said. “We say, ‘Yes, those moral arguments are true and valid, but how do we have a different ethos that has more staying power?’” 

In this second presidency of Trump, who dismisses any efforts at equity as a drain on resources, Patterson acknowledged “that moral ethos wears thinner faster than an economic argument. We need to see the power of [Black-led organizations] in a different way.” 

That collective power is admirable, and longstanding. Patterson said the report affirms the old maxim that Black people are skilled at making a dollar out of 15 cents, and at taking care of the community with whatever resources they do have. “We got us first,” said Patterson. “The report quantifies a cultural practice that’s existed within us forever.”

Two years in the making, the report grew out of a strategy of the Collective, which launched in 2021, to build new narratives about Black-led organizations. The crisis of underfunding is not a reflection of their performance, said Patterson, but of many funders’ low expectations of viability and growth. 

“The harmful narrative about [Black-led organizations] within the funding community is that they’re risky because they don’t have capacity, because they have small budgets, or they’re new,” said Patterson. 

“They’re seen as being in need of help; always [in] a deficit. There are also anti-Black assumptions about who can do the work, who are the professionals. There’s a tendency to want to bring in outside consultants to ‘build capacity.’ But if we invest in the organizations themselves, they could build their own capacity.”

Patterson added that the findings of the report confront a question frequently raised by opponents of Black reparations, the movement to demand that governments make financial restitution to African Americans who were historically deprived of wealth by segregation and slavery. California is the first state in the nation to address reparations on a state level, a process that’s moving slowly. “There’s a narrative of, ‘Why should we give to Black people?’” she said. “The answer is: Because Black people are giving to this state. Are we getting a return on our investment?…The report is an attempt to enter the conversation a different way.”

The report surveyed 217 Black-led organizations, about a third of the total number in California. Nineteen in every 20 respondent organizations have a Black CEO or executive director. More than three in five (63%) primarily serve Los Angeles County and the rest do so across 12 other counties, including San Bernardino and Riverside in the Inland Empire. More than nine in 10 (92%) serve urban areas, with government the largest source of revenue for more than two in every five respondents, and foundations the primary funding source for a quarter of respondents. The top three areas of focus, which reflect the greatest needs of Black communities, are youth services (21%), health and wellness (10%) and social justice/civic engagement (10%).  

The report says that given additional resources, many such organizations, despite being underfunded, would build on the tremendous good they do or, as Patterson puts it, “unleash their full potential.” 

Beyond the monetary benefits, Black-led organizations add value to communities, notably by sharing their work space with other organizations and offering locations for community events for a nominal fee or for free. Nearly three-quarters of respondents said they mentor young people who sometimes go on to create and serve in other nonprofits and Black-led organizations. Finally, these groups harness a wealth of “lived experience,” including by employing formerly incarcerated and homeless folk. Nearly 30% of the leaders of the surveyed organizations have that experience themselves, having lived behind bars, without housing or through some other significant challenge.

All of this racial equity work is being done on a relative shoestring. 

Half of survey respondents had 2023 operating expenses of less than $250,000 and net assets below $200,000. Six in 10 have a maximum of five full-time staff members. Most saw increases in funding during the COVID-19 pandemic, which coincided with the collective response to the public police killing of George Floyd in Minneapolis and the movement that horror inspired. 

While the demand for services has only increased since then, funding is not keeping up — that is to say, after the surge in 2020-21, it has fallen steadily. While 47% of respondents reported significantly increasing their revenue since the height of the pandemic, 80% of respondents said their current staffing level is insufficient to meet their organization’s needs. Those needs include the ability to do effective and innovative work on violence interruption in local communities, provide culturally relevant health care for those with sickle cell anemia and other conditions, offer special care for Black girls who’ve experienced trauma or abuse, and make Black culture, identity and history central to services of all kinds.

These organizations are so busy staying on mission — and finding money — that the needs of their own staff can get overlooked and underprioritized. 

Patterson said this must change. Fewer than 30% of staff earn a living wage (which, the report reminds us, is not a “thriving wage” but what’s needed for the bare minimum — rent, food and other essentials.) Less than half of the organizations surveyed offer employee health care, while slightly more than half offer vacation and sick time. Just one-third offer retirement contributions. This may not seem so bad, but a closer look at budget data reveals the glaring difference between organizations that are budgeted at over $1 million and those under that threshold: A whopping 89% of the former offer workers health care and related benefits, while only 20% of the latter do the same.  

At this point, the biggest barrier to growth — including expanding justice work and providing more for employees — is what Patterson saw last year: the drying up of new funding for racial equity. 

A quarter of respondents admit that new laws and/or policies are making racial equity work more difficult to do. But Black-led organizations are not disappearing — yet. In terms of the federal government, which is a chief source of funding, Patterson said the scope of the damage to DEI and racial justice won’t be entirely clear for a while. 

“The federal funding is lagging behind the rhetoric,” said Patterson. “We’ll have a real answer next year.” 

But even as traditional civil rights and racial protections are being dismantled very quickly, she said that a bright spot is the opportunity to build new systems to replace old ones that weren’t working well enough. 

“Our bellwethers … are being turned on us, but I don’t know that systems that existed served a vision to ensure Black permanence,” she said. “That said, we wouldn’t have torn them down. But since they’re being deconstructed, why not take the opportunity to build new systems, a new temple?” 

Patterson is confident that can happen. The report ends with another clarion call — broken down point by point — to funders to not just stay the course, but to widen it. 

It’s about reversing a reticence to support Black equity that set in well before the onset of Trump 2.0. 

“We have a set of people who can’t unsee what George Floyd revealed,” she said. “You can’t unknow something once you know it. The possibility is: How do we continue to harness what people know? How do we continue to organize the folks who actually do desire a better outcome but get fatigued because they’ve never had to demonstrate grit? 

“That’s the challenge,” she continued: “To help them” — starting with funders — “believe what they believe about themselves, and about America.”