The recent influx of immigrants to the United States and the corresponding growth in racial/ethnic diversity has increased the visibility of nonprofits that serve primarily people of color (POC). Combining data from an original survey with Form 990 tax returns and Census records, this study focuses on nonprofits designed to serve particular racial and ethnic groups. We explore whether organizations that serve mainly POC or those led by POC face greater financial challenges than others. We find that POC-serving or POC-led nonprofits experience greater financial difficulties stemming from additional challenges in resource development and management. However, POC-serving nonprofits led by executives of color did not show additional disadvantages compared with those serving mainly POC but led by White executives or POC-led nonprofits serving mainly White individuals. We discuss the implications of racialized organizations and how understanding this issue can help address the financial vulnerability of POC-serving nonprofits.
AndreoniJ.PayneA.SmithJ.KarpD. (2016). Diversity and donations: The effect of religious and ethnic diversity on charitable giving. Journal of Economic Behavior & Organization, 128, 47–58.
2.
BaronR.KennyD. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51, 1173–1182.
3.
BloemraadI.GleesonS.de GraauwE. (2020). Immigrant organizations: Civic inequality and civic invisibility. In PowellW. W.BromleyP. (Eds.), The nonprofit sector: A research handbook (pp. 292–313). Stanford University Press.
4.
BoardSource. (2017). Leading with intent: 2017 National index of nonprofit board practices.
5.
BollenK.StineR. (1990). Direct and indirect effects: Classical and bootstrap estimates of variability. Sociological Methodology, 20, 115–140.
6.
BowmanW. (2011). Financial capacity and sustainability of ordinary nonprofits. Nonprofit Management and Leadership, 22(1), 37–51.
CantorG.De VitaC. J. (2008). Civil society structure serving Latinos in the Washington, D.C., metropolitan area. Urban Institute.
9.
CarrollD.StaterK. J. (2009). Revenue diversification in nonprofit organizations: Does it lead to financial stability?Journal of Public Administration Research and Theory, 19(4), 947–966.
10.
ChowB. (2018). From words to action: A practical philanthropic guide to diversity, equity and inclusion. Foundation Center.
11.
CorneliusM.MoyersR.BellJ. (2011). Daring to lead 2011: A national study of nonprofit executive leadership. CompassPoint Nonprofit Services & the Meyer Foundation.
12.
CortésM. (1998). Counting Latino nonprofits: A new strategy for finding data. Nonprofit and Voluntary Sector Quarterly, 27(4), 437–458.
13.
CycyotaS.HarrisonD. (2006). What (not) to expect when surveying executives: A meta-analysis of top manager response rates and techniques over time. Organizational Research Methods, 9(2), 133–160.
14.
DanleyS.BlessettB. (2022). Nonprofit segregation: The exclusion and impact of White nonprofit networks. Nonprofit and Voluntary Sector Quarterly, 51(3), 507–526.
15.
de GraauwE. (2008). Nonprofit organizations: Agents of immigrant political incorporation in urban America. In RamakrishnanS. K.BloemraadI. (Eds.), Civic hopes and political realities: Immigrants, community organizations, and political engagement (pp. 323–350). Russell Sage.
16.
de GraauwE. (2016). Making immigrant rights real: Nonprofits and the politics of integration in San Francisco. Cornell University Press.
17.
DillmanD.SmythJ.ChristianL. (2014). Internet, phone, mail, and mixed-mode surveys: The tailored design method. Wiley.
18.
DorseyC.BradachJ.KimP. (2020). Racial equity and philanthropy: Disparities in funding for leaders of color leave impact on the table. Echoing Green and The Bridgespan Group.
19.
DunningC. (2022). No strings attached: Philanthropy, race, and donor control from black power to black lives matter. Nonprofit and Voluntary Sector Quarterly. Advance online publication. https://journals.sagepub.com/doi/abs/10.1177/08997640211057390
20.
EhrenbergR.SmithR. (2017). Modern labor economics: Theory and public policy. Routledge.
21.
Emergent Pathway. (2019). The case for funding black-led social change: Redlining by another name: What the data says to move from rhetoric to action. ABFE.
22.
European Social Survey. (2010). ESS round 5 Source Questionnaire. Centre for Comparative Social Surveys, City University London.
23.
FanW.YanZ. (2010). Factors affecting response rates of the web survey: A systematic review. Computers in Human Behavior, 26(2), 132–139.
FaulkL.WillemsJ.McGinnis JohnsonJ.StewartA. (2016). Network connections and competitively awarded funding: The impacts of board network structures and status interlocks on nonprofit organizations’ foundation grant acquisition. Public Management Review, 18(10), 1425–1455.
26.
FredetteC.Sessler BernsteinR. (2019). Ethno-racial diversity on nonprofit boards: A critical mass perspective. Nonprofit and Voluntary Sector Quarterly, 48(5), 931–952.
27.
FreemanD.AquinoK.McFerranB. (2009). Overcoming beneficiary race as an impediment to charitable donations: Social dominance orientation, the experience of moral elevation, and donation behavior. Personality and Social Psychology Bulletin, 35(1), 72–84.
28.
FultonB. (2020). Bridging and bonding: Disentangling two mechanisms underlying the diversity–performance relationship. Nonprofit and Voluntary Sector Quarterly, 50(1), 54–76.
29.
GleesonS.BloemraadI. (2013). Assessing the scope of immigrant organizations: Official undercounts and actual underrepresentation. Nonprofit and Voluntary Sector Quarterly, 42(2), 346–370.
30.
Gonzalez-RiveraC.DonnellC.BrionesA.WerblinS. (2008). Funding the new majority: Philanthropic investment in minority-led nonprofits. The Greenlining Institute.
31.
GoodenS.EvansL.PerkinsM.GoodenC.PangY. (2018). Examining youth outcomes of African American–led nonprofits. Nonprofit and Voluntary Sector Quarterly, 47(4_suppl), 34S–54S.
32.
HagerM.GalaskiewiczJ.LarsonJ. A. (2004). Structural embeddedness and the liability of newness among nonprofit organizations. Public Management Review, 6(2), 159–188.
33.
HansmannH. (1980). The role of nonprofit enterprise. The Yale Law Journal, 89(5), 835–901.
34.
HolleyL. (2003). Emerging ethnic agencies: Building capacity to build community. Journal of Community Practice, 11(4), 39–57.
35.
HungC. R. (2007). Immigrant nonprofit organizations in U.S. metropolitan areas. Nonprofit and Voluntary Sector Quarterly, 36(4), 707–729.
36.
HungC. R.OngP. (2012). Sustainability of Asian-American nonprofit organizations in US metropolitan areas. Nonprofit and Voluntary Sector Quarterly, 41(6), 1136–1152.
Joassart-MarcelliP. (2013). Ethnic concentration and nonprofit organizations: The political and urban geography of immigrant services in Boston, Massachusetts. International Migration Review, 47(3), 730–772.
KarimiF.GénoisM.WagnerC.SingerP.StrohmaierM. (2018). Homophily influences ranking of minorities in social networks. Scientific Reports, 8(1), 1–12.
42.
KasperG.RamosH. A.WalkerC. J. (2004). Making the case for diversity in philanthropy. Foundation News & Commentary, 45(6), 26–35.
43.
KimM. (2017). The relationship of nonprofits’ financial health to program outcomes: Empirical evidence from nonprofit arts organizations. Nonprofit and Voluntary Sector Quarterly, 46(3), 525–548.
44.
KimM.PotochnickS.OlsonK. (2022). The prevalence of ethnic, cultural, and folk nonprofit organizations in increasingly diverse communities: A case of demand heterogeneity. Nonprofit and Voluntary Sector Quarterly, 51(2), 301–326.
45.
KunreutherF.Thomas-BreitfeldS. (2020). Race to lead revised: Obstacles and opportunities in addressing the nonprofit racial leadership gap. Building Movement Project.
46.
LaFrance Associates. (2005). The 2005 Santa Clara County nonprofit benchmark study. Community Foundation Silicon Valley and CompassPoint Nonprofit Services.
47.
LecyJ.Van SlykeD. (2013). Nonprofit sector growth and density: Testing theories of government support. Journal of Public Administration Research and Theory, 23(1), 189–214.
LeeB.FraserI.FillisI. (2017). Nudging art lovers to donate. Nonprofit and Voluntary Sector Quarterly, 46(4), 837–858.
50.
LeeC.WongK.PfeifferD. (2017). On the front lines of immigrant homeownership: Asian American nonprofits during the great recession. Nonprofit and Voluntary Sector Quarterly, 46(6), 1209–1230.
51.
LeRouxK. (2020). Racial diversity and organizational performance in the U.S. nonprofit sector. In RutherfordA.MeierK. (Eds.), Race and public administration (pp. 119–139). Routledge.
52.
LinN. (2000). Inequality in social capital. Contemporary Sociology, 29(6), 785–795.
53.
ManducaR. (2018). Income inequality and the persistence of racial economic disparities. Sociological Science, 5, 182–205.
54.
MeierK.O’TooleL. (2013). Subjective organizational performance and measurement error: Common source bias and spurious relationships. Journal of Public Administration Research and Theory, 23(2), 429–456.
55.
MeschD.RooneyP.SteinbergK.DentonB. (2006). The effects of race, gender, and marital status on giving and volunteering in Indiana. Nonprofit and Voluntary Sector Quarterly, 35(4), 565–587.
56.
MoonS.ChoiS. (2013). Ethnic giving versus mainstream giving by foreign-born Korean immigrants in California. Nonprofit and Voluntary Sector Quarterly, 42(4), 803–827.
57.
MosleyJ.MaronickM.KatzH. (2012). How organizational characteristics affect the adaptive tactics used by human service nonprofit managers confronting financial uncertainty. Nonprofit Management and Leadership, 22(3), 281–303.
58.
MumfordS. W. (2022). Doing more with less: Racial diversity in nonprofit leadership and organizational resilience. Journal of Public and Nonprofit Affairs, 8(1), 29–57.
59.
OktenC.OsiliU. (2004). Contributions in heterogeneous communities: Evidence from Indonesia. Journal of Population Economics, 17(4), 603–626.
60.
PaarlbergL.AnS.-H.NesbitR.ChristensenR.BullockJ. (2018). A field too crowded? How measures of market structure shape nonprofit fiscal health. Nonprofit and Voluntary Sector Quarterly, 47(3), 453–473.
61.
PaarlbergL.HannibalB.McGinnis JohnsonJ. (2020). Examining the mediating influence of interlocking board networks on grant making in public foundations. Nonprofit and Voluntary Sector Quarterly, 49(4), 734–756.
62.
PaarlbergL.McGinnis JohnsonJ.HannibalB. (2020). Race and the public foundation grants marketplace: The differential effect of network status in communities of color. Public Management Review, 22(10), 1443–1463.
63.
PatrapornR.PfeifferD.OngP. (2010). Building bridges to the middle class: The role of community-based organizations in Asian American wealth accumulation. Economic Development Quarterly, 24(3), 288–303.
64.
PérezE. O. (2021). Diversity’s child: People of color and the politics of identity. University of Chicago Press.
PrenticeC. (2016). Understanding nonprofit financial health: Exploring the effects of organizational and environmental variables. Nonprofit and Voluntary Sector Quarterly, 45(5), 888–909.
67.
RamakrishnanS.BloemraadI. (2008). Introduction: Civic and political inequalities. In RamakrishnanS. K.BloemraadI. (Eds.), Civic hopes and political realities: Immigrants, community organizations, and political engagement (pp. 1–44). Russell Sage.
68.
RayV. (2019). A theory of racialized organizations. American Sociological Review, 84(1), 26–53.
69.
RosensteinC.BrimerA. (2005). Nonprofit ethnic, cultural, and folk organizations: Baseline data from the national center for charitable statistics. The Journal of Arts Management, Law, and Society, 35(3), 189–203.
70.
RosensteinC.KimM.VakhariaN. (2022). Living cultural heritage and the traditional and folk arts in the nonprofit sector: Data on scope, finances, and funding. The California Alliance for Traditional Arts.
71.
RothB.GonzalesR.LesniewskiJ. (2015). Building a stronger safety net: Local organizations and the challenges of serving immigrants in the suburbs. Human Service Organizations, 39(4), 348–361.
72.
SchaeferR. (2008). Introduction. In SchaeferR. (Eds.), Encyclopedia of race, ethnicity, and society (pp. xlvii–lii). SAGE.
73.
SearingE. (2018). Determinants of the recovery of financially distressed nonprofits. Nonprofit Management and Leadership, 28(3), 313–328.
74.
SloanM.CharlesC.KimM. (2016). Nonprofit leader perceptions of operating reserves and their substitutes: An exploratory study. Nonprofit Management and Leadership, 26(4), 417–433.
Thomas-BreitfeldS.KunreutherF. (2017). Nonprofit executives and the racial leadership gap. Building Movement Project.
77.
TuckmanH.ChangC. (1991). A Methodology for measuring the financial vulnerability of charitable nonprofit organizations. Nonprofit and Voluntary Sector Quarterly, 20(4), 445–460.
78.
VuC. M.NguyenD.TanhD.ChunJ. (2017). Case study of an ethnic community-based organization in the United States. Nonprofit and Voluntary Sector Quarterly, 46(1), 199–217.
YungB.LeahyP.DeasonL.FischerR.PerkinsF.ClasenC.SharmaM. (2008). Capacity-building needs of minority health nonprofits. Evaluation and Program Planning, 31(4), 382–391.
81.
ZellnerA. (1962). An efficient method of estimating seemingly unrelated regressions and tests for aggregation bias. Journal of the American Statistical Association, 57(298), 348–368.
