Nonprofit funding is skewed toward the top 10 LGBTQ+ organizations, leaving smaller, newer organizations to fight for scraps

With over 2,763 LGBTQ+ nonprofit organizations in the United States, it is almost impossible to be familiar with them all. Most people can only name the industry’s largest and most funded organizations, and maybe their local community organizations. 

According to the Indiana University Lilly Family School of Philanthropy, LGBTQ+ organizations receive less than 1% of all nonprofit contributions, totaling $560 million in 2019. The top ten funded LGBTQ+ focused organizations account for nearly a third of all yearly contributions, leaving little for other queer charities. Although funding has increased tremendously over the last decade, the vast majority goes to very few places and the remaining LGBTQ+ nonprofits and the populations they serve stay underfunded.

The top 10 LGBTQ+ nonprofits receive 39% of overall nonprofit funding

The top ten most funded organizations received $216 million in 2019, and the rest of the relatively small pool of donations –$344 million– was shared among the additional organizations, according to the IUPUI Lilly Family School of Philanthropy. This divide creates a mean yearly revenue of $124,502 per organization for almost 3,000 other nonprofits.

The Trevor Project received close to $30 million in contributions in 2019, which makes up almost 19 percent of the total contributions given to all LGBTQ+ nonprofits that year. Large nonprofits often receive more recognition and funding as they grow, creating an upward spiral.

Progressive cities with higher concentrations of queer people receive the most funding, leaving smaller LGBTQ+ communities in red states underfunded

Progressive cities tend to have more concentrated populations of queer people and therefore need more funding on average. However, such extreme disparity in donations result in the top funded organizations overshadowing smaller organizations, even those that may be more effective in solving certain specific LGBTQ+ obstacles. 

Although each state has at least four LGBTQ+ nonprofit organizations, representation and funding largely varies by region. States with the most LGBTQ+ access to assistance are progressive states with known queer cultures and histories. California and New York have the most organizations per state – 429 in California and 243 in New York – and are receiving the most funding. 

In 2021, according to LGBTQ Funders, the Pacific region received the most local, state, and regional LGBTQ funding, almost 20 percent of all donations to LGBTQ communities and issues. The majority of this funding was solely due to California’s $38.9 million in donations, by far the highest funded state for LGBTQ+ work. New York was the second most funded state, with $12.3 million. 

The other 48 states received less than $10 million in LGBTQ+ local and state funding. The lowest funded state was North Dakota, with only $2,500, despite the population's immediate need for assistance, now more than ever. The Human Rights Campaign declared North Dakota on track to pass more anti-LGBTQ+ legislation this year than any other state. 

The funding disparity per state and region leaves organizations and clients outside of liberal regions struggling to keep up with the need for assistance and relying on delegated funds from liberal states. 

Funding is typically only reserved for LGBTQ+ organizations established before 2000

Not only are all of the 2019 top ten funded LGBTQ+ organizations in liberal regions, they are all organizations established before 2000, with 70% founded before the end of 1985. Brands and corporations tend to attach themselves to recognizable and “trusted” names for their large fundraisers and Pride month campaigns. 

Larger organizations monopolize the large sum of donations, funds, and attention of shoppers and patrons during Pride, leaving less for smaller organizations. The majority of large campaign Pride donations are made by corporations like Walmart, Target, and Deloitte to push public statements of alliship with the LGBT community. Pride donations are given in bulk to very few well-known organizations, while smaller organizations rely on individual donations and local grants. 

Best practices for companies looking to donate to nonprofit organizations

Larger organizations don’t necessarily know their clients, populations, or regions better just because they have more funding. Highly funded nonprofits can often offer "band-aid" solutions, helping more clients per program, but at the cost of less specific assistance per situation. More established organizations can be less adaptable, more reliant on tradition, and take longer to implement change.

In contrast, smaller organizations may be more open to change, more trusted by community, in better position to use creative strategies, and offer more diverse services to help their community. 

To best ensure that your contributions are making the most meaningful impact, here are some best practices for picking a nonprofit organization to fund:

1. Consider your intentions. Who do you want to assist? How would you want to enable change with your donation?
2. Research nonprofit organizations on local, state, and national levels. Try to understand how larger and smaller nonprofits in your areas work together, or hinder each other from creating positive change for the populations in need.