In 2020 Funders for Race Equality (FRE) set criteria and guidance for auditing grant portfolios to enable funders to better understand their funding in relation to racial equality. Our racial justice audit 2022 outlines our funding over the course of that year, using this guidance.
We’re a funder working to end poverty and inequality in London, the most ethnically diverse city in the UK. Racial injustice and poverty go hand-in-hand, and people that experience racial inequity are overrepresented in London’s low-income communities.
Much of our grant-making therefore benefits people experiencing racial inequity as a matter of course. We also actively support racial diversity and leadership within all anti-poverty organisations we fund so that they accurately reflect the communities being served.
For the purpose of this audit, we focused on grants that explicitly aim to benefit communities experiencing racial inequity, rather than grants that incidentally benefit these communities because of the demographic make-up of an area. We included all grants awarded within our current 2018 – 2024 funding strategy that were active as of 6 June 2022 in the analysis. This meant we included 350 grants with a combined value of £40.4m.
The audit criteria
FRE scores grants against four independent criteria.
1. Is the organisation funded a race equality sector organisation?
Of the 350 grants audited, 88 went to the race equality sector. This means organisations with a mission and track record of providing services designed for communities experiencing racial inequity AND with 75% of the board and 50% of the senior staff (at director and ceo level) from a community or communities experiencing racial inequity. This is 25% of our grants.
2: Is the intention behind the grant to benefit communities experiencing racial inequity?
The second dimension of the audit is whether or not the grant aim is explicitly to reduce racial inequity or not, which for us as a funder is also where this inequity intersects with poverty. Of the 350 grants, 184 (53%) were assessed to meet these criteria.
3. What type of project is being funded
The majority of our grants in this sector (73%) go to service provision (mostly tailored advice services, reaching specific communities). A much smaller proportion of race equality sector grants work on campaigning (17%). This is also smaller in comparison to other grants in our portfolio, where 35% are working on campaigning. A significantly smaller amount of race equality sector grants are dedicated to research (2%) compared to other grants (8%).
4. In what way is it addressing racial inequity?
The grants with a specific aim to tackle racial inequity were then further differentiated by whether they aim to address the root causes of inequity or the consequences of it. The majority of our grants – 70% – focus on consequences, while 30% tackle root causes. This reflects the tendency towards service provision grants, focusing on advice work in racially minoritised communities.
The findings of this audit are broadly positive, showing that we continue to provide dedicated support to communities experiencing racial inequity, with about half of our active grants intending to reduce racial inequity. About a quarter of our grants go to dedicated race equality sector organisations - those led by people that experience racial injustice, and that have a mission and track record of addressing it.
In line with our audit in 2020 we can see two trends that continue, and that we have taken active steps to address. Firstly, we can see that there is a gap in overall spend, and average grant size between race equality sector organisations, and other organisation types. Secondly the audit also reveals our funding to be more focused on alleviating the consequences or symptoms of racial injustice rather than tackling the root causes.
After the audit in 2020 we took two courses of action to proactively address these trends. The first included two grants to the Advice Service Alliance. The second, larger initiative is the development and launch of the £4m racial justice fund in 2022 in partnership with City Bridge Trust. The fund’s aim is to tackle racial injustice by reducing poverty in London’s Black and minoritised communities through increased economic empowerment.
These two initiatives will help to strengthen and grow the race equality sector, and provide support and opportunity for organisations themselves to grow and apply for funding, and to tackle the root causes of racial injustice. We hope to see this reflected in our next audit, and welcome the opportunity to keep reflecting on our work tackling poverty in London, and the racial injustice that it creates and sustains.