Five lessons from the New Commonwealth Fund: ­How to advance racial equity through philanthropy

How could this happen? What can I do? How can I help? Where do I start? These questions and many others raced through my mind—and gnawed at all of us—in May 2020 when the brutal murder of George Floyd sent shockwaves across the country. In Boston, my network of friends and peers, who are Black and Latinx executives and leaders at their companies and institutions, also wrestled with these questions. We were collectively horrified and felt compelled to act.

At the same time, we were also witnessing the profound effects of COVID-19 on Black and Brown neighborhoods. We saw serious issues exacerbated by the pandemic—health disparities, widening educational gaps, dramatic food insecurity, loss of housing, and the inability of families to earn a living wage— that required immediate and significant action.

In the weeks following Mr. Floyd’s murder, we decided to merge the access to resources, capital, and power that our respective roles in corporate America provided and—informed by our personal and shared experiences as Black and Latinx Americans and our intimate understanding of the issues affecting Black, Latinx, and Indigenous neighborhoods—take collective action. The steps we took during those few weeks led to the formation of the New Commonwealth Racial Equity and Social Justice Fund (NCF), a nonprofit organization that invests in Black, Latinx, and Indigenous leaders and community-based organizations serving the Black, Latinx, and Indigenous communities of Massachusetts. 

What we’ve created at NCF, it turns out, is more than an organization that invests in BIPOC leaders, organizations, and communities across the commonwealth of Massachusetts. It’s a model of philanthropic success that others can explore and apply as they look to get funding most efficiently and effectively to organizations that are working to make significant progress on racial equity issues. At NCF, while raising over $40 million, we’ve already invested about $11 million—roughly 25%—in leaders and organizations working on the ground in their communities to turn the tide of racial and social inequities in tangible ways. Our goal is to break from a traditional foundation model focused on long-term giving—which means many foundations distribute just 5% of their funds annually. Instead, we aim to rapidly direct unrestricted dollars to leaders and organizations that can make a real impact now.

The lessons we’re learning at NCF—whose mission is to provide essential support, resources, and thought leadership to uncover and dismantle systemic racism in all its insidious forms in Boston and across Massachusetts—are valuable for those across the country who are interested in advancing racial equity and other causes.

Complex, interconnected issues like social justice require comprehensive, disruptive approaches. Charitable donations are necessary but not sufficient. At NCF, we find that a more effective approach to problem-solving involves a combination of investment, capacity building, and ecosystem work—all focused on building collaborative, respectful, and trust-based relationships with nonprofit leaders. Below are five insights for philanthropists and nonprofits looking to create momentum for racial equity and social justice. 

1. Prioritize underestimated and underfunded Black- and Brown-led local nonprofits

NCF sees the nonprofit sector, particularly local organizations working in Black and Brown neighborhoods, as the strongest levers for change. These organizations are embedded in their communities and understand racial equity issues firsthand. But they don’t receive adequate resources. The numbers tell an alarming story: The National Committee for Responsive Philanthropy reports that, based on its analysis of some of the largest community foundations in the United States, only 1% of community foundation grantmaking goes to Black communities. Organizations with Black leaders don’t fare well, either. A study from Echoing Green and The Bridgespan Group reports that nonprofits led by Black leaders had 45% less revenue and 91% fewer unrestricted assets compared to white-led organizations focused on the same work. Location can also be a limiting factor. In Massachusetts, very few philanthropic dollars escape Boston. The net effect? If you’re a Black- or Latino-led organization in New Bedford, for example, you’re very likely not receiving much philanthropic funding.

At NCF, we prioritize grant dollars for Black, Latinx, and Indigenous leaders, entrepreneurs, and nonprofits in diverse locales. To date, 92% of NCF-granted dollars have gone to Black- or Brown-led organizations. We have granted to nonprofits in all 26 “gateway cities”—midsize urban centers that anchor regional economies but are slow to draw economic investment—plus others. We’ve supported over 150 impressive groups—like La Colaborativa in Chelsea, which makes an incredible difference to the social and economic health of Latinx immigrants and communities. Another example is the Sportsmen’s Tennis & Enrichment Center in Dorchester, which provides tennis, academic, and life skills for underserved youth in transformational ways. We’re proud to support these and other under-the-radar groups whose on-the-ground work in local communities has direct and immediate impact. 

2. Listen to nonprofits and bring them together

Building collaborative partnerships with nonprofits—and creating an ecosystem for them to connect with one another—is essential. Our NCF founders contacted nonprofits and started personal conversations with them. We listened and learned: What support do you need? What’s broken in the system? Does this granting model resonate with you? We also found that the nonprofits weren’t connected with one another. In fact, they were competing for scarce resources. By creating a safe space for them to talk and work together, and providing much-needed flexible resources, we turn competition into collaboration.

In 2021, NCF brought together three organizations, each with a different focus (health equity, youth development, and arts and culture), from three different neighborhoods to build an outreach model that allowed each of their programs to grow participants and audiences. While they were all embedded on the same five-mile corridor referred to as Blue Hill Avenue, they had never partnered before and weren’t even familiar with one another’s programming. We consider this kind of activity to be at the core of what NCF claims as strengthening the ecosystem.

3. Measure results in a way that’s mutually beneficial

Many nonprofits are primed to do excellent work, but they feel forced to drastically change their core approach to satisfy grantor measurement standards. This can detract from an organization’s impact. When we heard this concern, NCF started approaching measurement collaboratively. We talk with nonprofit leaders to learn what impact looks like for them. How do they measure success? Can we incorporate their insights into our metrics? It’s a two-way experience. We explore success more deeply—to go beyond “How many people did you serve?” to “Are relationships with police actually getting better?” A critical layer to our approach related to impact measurement is our firm belief that it is our responsibility, as a funder, to help each organization reach its impact goals—not expect them to do the work alone.

4. Co-design and simplify granting—respecting and trusting the expertise and innovation of nonprofits  

Our granting process is a co-design model. At first, we called organizations, saying, “You’re doing great work, and we want to learn more. How can we support you?” We spoke to every group we gave money to. Now, groups can contact us through our web portal, and we keep the process streamlined and focused on dialogue: What would you do with this kind of investment? What are the things you want to do but can’t get to today? We conduct due diligence on the backend to make the process less onerous for the nonprofits so they can spend time on mission-driven work.

5. Address underlying causes, not symptoms

In 2020, people asked: How can we turn this moment into a movement? I’ve been thinking about that question through the mindset of how pharmaceuticals work to cure diseases— understand the science, identify the root causes, and direct resources toward developing treatments. Philanthropy can use the same approach: Focus on causes, not symptoms. At NCF, we identified our five pillars of granting— economic empowerment, health equity, identity and culture narrative, policing and criminal justice reform, and youth development—as areas having both the largest impact on quality of life and where systemic racism is deeply embedded. By focusing on these areas, we become strategically precise.

A hopeful look ahead

As chair of NCF, I lead a group that is just as passionate as it was during the summer of 2020. We’re just starting our journey to shift more giving to Black and Brown communities and nonprofits. The philanthropic sector must not ignore these groups because some people think they won’t benefit the majority. To the contrary, as a society, we rise and fall together. We must also work together. One of the things I’m most hopeful about is that we now see NCF-like hubs growing around the country. Leaders in Houston, Minneapolis, and other cities are reaching out to learn about the NCF model. With a connected, like-minded group of people committed to addressing the underlying causes of racial inequity, we’re making an impact. It’s an investment that we believe will pay off.