Examining philanthropic funding for racial equity across the United States

About 90 million Americans—roughly one-third of the US population—are economically insecure.¹Earning below 200 percent of the Federal Poverty Level. They are disproportionately people of color,²Includes the following racial and ethnic identities (according to the US Census): Hispanic or Latino, Black or African American, American Indian and Alaskan Native, Asian, Native Hawaiian and other Pacific Islander, and two or more races. who account for more than 50 percent of economically insecure Americans but for only some 40 percent of the US population as a whole. Economic insecurity is strongly correlated with worse socioeconomic outcomes, including higher rates of housing insecurity, food insecurity, and mortality.

Philanthropic capital can help communities across the nation to achieve more racially equitable outcomes. But for that to happen, funding should be targeted to meet the needs and realities of the communities it seeks to help. We wanted to better understand the degree to which philanthropic funding earmarked for racial equity flows to areas where it is needed most. To that end, we built on existing research³Several analyses published since 2020 have focused on philanthropic-funding flows for racial equity, examining topics such as the discrepancy between corporate and philanthropic funding committed versus disbursed, funding to advance racial equity compared with funding for racial justice, giving to organizations led by people of color, giving to women and girls of color, and the distribution and scale of funding across different focus areas (Candid, the McKinsey Institute of Black Economic Mobility, Ms. Foundation for Women, Philanthropic Initiative for Racial Equity, PolicyLink–Bridgespan Group, Washington Post). Our analysis seeks to build on this important work. to map the level of US philanthropic giving targeted for racial equity relative to the level of economic insecurity and racial income disparities. The analysis—while limited and by no means comprehensive (see sidebar “Data limitations of our research”)—attempts to shed light on the geospatial distribution of more than 165,000 grants from 2019 to the first quarter of 2023 (see sidebar “Methodology: ‘What-if’ scenario data analysis”).

Philanthropic funders and community stakeholders can explore the map below to consider important questions such as these:

• How does the philanthropic funding for racial equity that some geographies receive compare with the relative need in those areas? What is responsible for this outcome, at an aggregate level and within the grant makers’ portfolios?
• Which geographies might be worth further exploration as potential grant-making strategies are developed and assessed?
• How might philanthropic capital work more closely with other place-based investors (such as governments and the private sector) to catalyze investment in communities where there is significant need?

This analysis was developed by McKinsey’s Philanthropy Practice and the McKinsey Institute for Black Economic Mobility. McKinsey’s Philanthropy Practice supports foundations, high-net-worth individuals, and family offices in their efforts to translate their resources into impact. The McKinsey Institute for Black Economic Mobility is a research institute and think tank dedicated to advancing racial equity and inclusive growth in the United States and globally.

Data sources

1. Candid. Customized data set of racial-equity and racial-justice philanthropic grants for the years from 2019 to the first quarter of 2023 (last updated in March 2023). Candid developed its methodology to code and classify grants for racial equity and racial justice in partnership with the Philanthropic Initiative for Racial Equity. For our analysis, racial equity includes funding for both racial equity and racial justice. Pledges and commitments in the data set were excluded. For more information on Candid’s data, visit Candid’s grant-data fact sheet.
2. US Census Bureau (2017–21). Median household income in the past 12 months (in 2021 inflation-adjusted dollars); American Community Survey five-year estimates.
3. US Census Bureau (2021). Poverty status in the past 12 months; population below 200 percent of the Federal Poverty Level; 2021 American Community Survey one-year estimate.
4. US Census Bureau (2021). Total Population; demographic and housing estimates; 2021 American Community Survey one-year estimate.

Data license

Candid racial-equity data set 2019 to Q1 2023; used with permission.

Key indicators and definitions

Funding per person of color. Total philanthropic funding Candid recorded for the period from 2019 to the first quarter of 2023 (excluding pledges) divided by the total population of color (including all racial and ethnic categories from the US Census, except non-Hispanic Whites) in a given county.

Income disparity. Ratio of the median income of White households divided by the population-weighted average of the median income of Black or African American, American Indian and Alaska Native, Hispanic or Latino origin (of any race), and Asian households.

Economic insecurity. Percentage of families living below 200 percent of the Federal Poverty Level. Data disaggregated by race is not available at a county level.

These maps are a summary for general information only and rely solely on publicly available and licensed third-party data that have not been validated or independently verified by McKinsey. The maps and any outputs therefrom do not constitute, and should not be interpreted as, policy, legal, or other regulated advice, or as a recommendation from McKinsey on any specific course of action. Advice of legal and other relevant certified/licensed experts must be sought prior to any consideration of the issues raised herein.

Data from these maps is provided under the terms of use.

For questions or more information about these maps, please get in touch with Philanthropy_Practice@mckinsey.com.