This study of nonprofit organizations in the human service sector in Philadelphia uncovered both similarities and differences between organizations led by African Americans and those led by white Executive Directors. Overall, there were some similarities — in the background and experiences of EDs, in what EDs do in their daily work, in several organizational characteristics such as age and budget, and in the gender composition and expertise of board members and senior staff.

However, a number of interesting differences emerged. Organizations led by African Americans are smaller, as defined by the number of staff and volunteers. Other work has similarly found this. AA-led organizations have fewer cash reserves and are more dependent on government grants than white-led organizations. The latter likely explains the greater likelihood of AA-led organizations to track data and program outcomes, as accountability measures for public funds has increased over time. These findings regarding cash reserves and government funding may make AA-led organizations more vulnerable to recessions and changes in government, and thus more financially precarious than white-led organizations. Focus group participants (African American EDs) acknowledged the need for diverse funding streams and creative funding strategies.

The findings from this study also show a degree of segregation and isolation between AA-led and white-led organizations.

  • AA-led organizations are more likely to have African American board members and senior staff, and white-led organizations are more likely to have white board member and senior staff. In fact, at 27 percent of AA-led organizations, all board members are African American. At 59 percent of AA-led organizations, all senior staff are African American; at 48 percent of white-led organizations, all senior staff are white.
  • While study participants express the value of leaders and staff reflecting the population they serve, the downside to this homogeneity, particularly among board members, is the lack of diverse professional and social networks, which can negatively impact access to funding.
  • The paucity of African American senior staff at white-led organizations also has implications for the future of African Americans in the nonprofit sector. The pipeline for African American leaders appears to be weaker at white-led organizations.

AA-led and white-led organizations in this study are serving different populations.

  • AA-led organizations are more likely to serve teens, African Americans, and low-income residents than white-led organizations.
  • AA-led organizations are also more likely to be serving and located in low-income Philadelphia neighborhoods.
  • These findings suggest that AA-led organizations are serving some of the neediest populations in Philadelphia. Being located in the places where services are most needed makes the organizations more accessible to clients and allows them to become trusted members of the community. These findings highlight the value of AA-led organizations to the Philadelphia community.

All study participants reported significant challenges with fundraising, particularly with only the recent end of the recession. However, African American EDs reported even greater challenges. While there is a perception of racial differences in funding, this study cannot confirm whether AA-led organizations are not funded as often or as generously as white-led organizations. Funders explained that a large percentage of grants benefit African Americans because nonprofits serve large black populations in Philadelphia. The survey data also showed that nonprofits primarily serve black clients. What is not clear is the whether AA-led organizations receive less funding than white-led organizations, although many believe this is the case. Other studies have found mixed results in disparities in funding and data are lacking.

Overall, this unique and first-of-its-kind study should provide valuable information to the Philadelphia African American Leadership Forum and other city and nonprofit leaders and funders to use to improve the strength of nonprofits in Philadelphia and the services they provide throughout the city, particularly to the neediest populations.