Top of main content
Philanthropy
Diversity
Charity

Supporting racial equality

How philanthropy can take the lead.

Across the United States, people are gathering in public to demand immediate, systematic racial reform. These protests began immediately following the police killing of George Floyd, who was restrained by four officers for nearly nine minutes. The tragic scene, including Floyd's cries of "I can't breathe" in the final moments of his life, was recorded, and has outraged people all over the world.

It has been said that empathy is opposite of racism; if so, then we are seeing profound displays of empathy across the country and around the world for George Floyd and other African Americans who have been killed unjustly.1 Corporate leaders have been quick to issue statements denouncing racism and calling for equality, including Ben and Jerry's powerful statement2, and many pledged financial commitments. The same week, Alexis Ohanian, Co-Founder of Reddit, resigned from the company's board, asked for his seat to be filled by a black candidate, and pledged USD1 million to the Know Your Rights Camp3, and Michael Jordan and Nike pledged to contribute USD100 million to social justice organizations4.

In the wake of Mr. Floyd's death and the protests that followed, HSBC Private Banking has seen an increase in inquiries from philanthropic individuals seeking to support racial equality through their charitable giving. For those interested in supporting this most worthy goal, there are many ways to get involved. We spoke with a few friends to learn what they are seeing; below are some suggestions.

Funding immediate needs.

We have observed that much of the immediate funding has been directed to the following:

  • Support for victims of police brutality and their families. In one week, USD8 million had been raised online for the family of George Floyd. Other victims of police killings, including Breonna Taylor and Ahmaud Arbery, have also generated large public support via online giving platforms.
  • Supporting protests. Groups that organize and lead peaceful protests include established non-profit organizations as well as grass roots coalitions of community members.
  • Legal defense and bail funds. In protection of individuals' civil rights, organizations provide assistance to people who cannot afford bail or legal representation. These groups often also engage in broader advocacy work.
  • Providing assistance for small business owners who've been looted, particularly black or minority-owned businesses and/or funding community clean-up projects in areas that have been looted.

Giving in support of these efforts can be incredibly meaningful, at a time when public attention is high and the needs are great.

Supporting public policy change.

Long-term social impact requires going further than addressing today's immediate needs. For philanthropists who care deeply about supporting racial equality, next steps may include funding public policy work. "Many organizations — including several in which I am involved — took the initial step of providing support to essential healthcare workers and peaceful protestors," says Preston C. Demouchet, estate planning attorney with Carter, Ledyard, and Milburn LLP. "Now, many philanthropic individuals and non-profit organizations I advise are seizing this moment to advocate for needed changes in public policy, and asking how to get involved. There is now a willingness to step outside of traditional models of giving to get involved in efforts to repeal or change policies which perpetuate inequalities."

There are many organizations involved in policy work at the federal, state, and local levels. The NAACP is one of the oldest and largest organizations advancing civil rights public policy through the legislative process; relative newcomer Campaign Zero has listed ten immediate policy solutions to end police brutality using research and data.5 "There is a real and pressing need for our civic and business leaders to step up in this time," says Milton Speid, Partner at Full Impact Advisory, a mission-driven consulting firm. "The demand for swift policy changes is one of the most important topics of conversation I'm hearing right now. The community is calling for legislative and policy changes on par with the Civil Rights Act of 1968 for transformational change to happen." Consider New York Governor Andrew Cuomo's recent reversal of the state law that protected police misconduct records from being disclosed publicly6, and Los Angeles Mayor Eric Garcetti's reversal of the planned USD121 million budget increase for the Los Angeles Police Department7 — two significant examples of the changes that are underway.

As a business operating in markets all around the world, we believe diversity brings benefits for our customers, our business and our people. Different ideas and perspectives are celebrated within our brand.

Addressing systemic racism, including implicit bias.

While immediate and near term work is necessary, philanthropists seeking to make long-term change can meet the moment not only by donating to causes focused on racial inequality, but also by considering the totality of their actions—especially as funders.

A study this year by The Bridgespan Group and Echoing Green demonstrates the extent to which access to philanthropic funds is not equitable across racial lines.8 Notably, black-led non-profit organizations have 76 per cent less unrestricted net assets than their white-led counterparts. Non-profit leaders of color cited four key barriers to fundraising that were attributed to unconscious racial bias: getting connected, building rapport, securing support and sustaining relationships. "Non-profit organizations are saying, "We are supporting low income communities, we are supporting black and brown communities, we are supporting women's rights," etc., however, when you pull back the curtain and look at the leaders of the organizations receiving the most funding, most do not reflect the populations they are committed to serve," says Speid. In this way, the philanthropic community is also culpable in expanding the inequities in society.

Combatting this requires philanthropists to turn inward and consider the biases that impact their decisions about funding, investment of capital, and interactions with organizational leadership and other philanthropists. While this may seem daunting, experts on implicit bias agree that we can overcome this by acknowledging our own personal biases and practicing thorough, thoughtful decision-making.9 "Start by recognizing and unpacking our own biases," Speid says. "The biases we've developed have shaped the way we view the world. We have to take the opportunity to see the world differently by applying a racial and gender-based lens to our decision-making filters."

For donors and charities alike, uncomfortable conversations about race should be encouraged because they can challenge our thinking, and lead to action. "By being silent, people assume you don't have an opinion at all", says Tracy Redfern, Co-Head of Sales, US International Subsidiary Banking, HSBC, and Advisory Board Member for HSBC's African Heritage Employee Resource Group. Tracy encourages business owners to use their voices, explaining "as a leader—whether you run a business or are involved in your community—it's important to lean into difficult discussions on race. It's up to all of us to create a culture of openness and transparency where people feel they can speak up and speak out – because that's where change happens."

General charitable giving best practices still apply – now, even more so.

Educate yourself. When making a charitable contribution the first thing to do is ask—don't assume—what current needs are. Take the time to listen, educate yourself, and do your own research. Being a good donor includes respecting your grantees, and remembering that many charities are operating at maximum capacity right now. Balance asking questions against being mindful of an organization's limited resources.

Remain flexible. Consider making unrestricted gifts to organizations you support. Donor-recipient trust is incredibly important when dynamics are shifting quickly, and unrestricted gifts allow organizations to channel funds to their most critical needs.

Be in it for the long run. The current momentum we are seeing now is incredible; but true, lasting change will not happen overnight. The philanthropic community needs to be proactively thinking now about how they will sustain their efforts for the organizations and communities they support.

It's an opportunity for change – and Philanthropy can lead.

While the moments following a tragedy can feel dark, the momentum of this moment presents a powerful opportunity for philanthropists to make real, lasting change. "I think what gets lost in all the media frenzy is that there are good people on the front lines doing really good work. I hope to see that continue," says Redfern.

"Legal defense funds are important for protecting constitutional rights. But the harder, longer term work is to address systemic issues that put people in vulnerable positions in the first place," says Demouchet. "African Americans have always been susceptible to health and economic crises, and then were hit the hardest by the coronavirus in the US. It's encouraging to see people from all backgrounds come together now. I expect many individuals and charitable institutions will be putting words into action."

One of the best ways donors can achieve long-lasting impact is to remember why they choose to give in the first place. Speid advises, "remember that philanthropy is personal – support the issues you are passionate about and are personally connected to. For example, if you are passionate about education reform and less about criminal justice reform, I say give more to education. That's where your impact will be the greatest, because you are personally committed to the cause."

How we can help

HSBC Private Banking's Private Wealth Solutions team advises global families on a wide array of philanthropy, family governance, and wealth planning topics. Our philanthropy services include strategic advisory, structuring, and charitable administration. For additional information about how we can help you make a positive change in the world, contact your Private Banking Relationship Manager.

At HSBC, diversity is in our roots: HSBC was founded in 1865 to finance trade between Europe and Asia, and we continue to bring different people and cultures together. As a business operating in markets all around the world, we believe diversity brings benefits for our customers, our business and our people. We want a connected workforce that reflects the communities where we operate and helps us meet the needs of customers from all walks of life. Different ideas and perspectives help us innovate, manage risk, and grow the business in a sustainable way – and difference is celebrated within our brand.

Tax Deductibility: Some Considerations as You Donate

Two types of giving we’ve seen on the rise include gifts to individuals and gifts in support of policy organizations. Both have important tax considerations.

While giving directly to individuals may be an efficient means of providing support, gifts from one individual to another are considered non-deductible personal gifts, not charitable gifts. On the other hand, only a small fraction of Americans actually itemize their deductions (13.7 per centin 2019, according to the Tax Foundation); for those who do not itemize, this may not be a concern.10

If you are interested in supporting individuals, but prefer to rely on the established vetting and government oversight of qualified public charities, there are platforms for doing so. These include crowdfunding sites such as GoFundMe Charity (not to be confused with personal GoFundMe campaigns, which are personal gifts).

When supporting public policy efforts, donors should be mindful that gifts to lobbying organizations are also not tax-deductible. Many organizations that work to change public policy are 501(c)(4) organizations, also known as social welfare organizations. Seeking legislative changes through lobbying is a permissible activity of social welfare organizations, but not of public charities. When planning to claim a charitable tax deduction, ensure donation recipients are public charities, 501(c)(3) organizations.

HSBC does not provide tax or legal advice.

1https://fortune.com/2020/06/02/protests-empathy-enemy/

2https://www.benjerry.com/whats-new/2016/systemic-racism-is-real

3https://alexisohanian.com/home/2020/6/5/what-did-you-do

4https://news.nike.com/news/jordan-brand-statement-on-commitment-to-black-community

5https://naacp.org/issues/federal-advocacy/, https://www.joincampaignzero.org/

6https://www.innocenceproject.org/in-a-historic-victory-the-new-york-legislature-repeals-50-a-requiring-full-disclosure-of-police-disciplinary-records/

7https://www.npr.org/2020/06/03/869242938/amid-protests-against-police-violence-lamayor-eric-garcetti-announces-cuts-to-l

8Stanford Social Innovation Review, https://ssir.org/articles/entry/overcoming_the_racial_bias_in_philanthropic_funding

9Eberhardt, Jennifer, Ph.D., Biased: Uncovering the Hidden Prejudice That Shapes What We See, Think, and Do, Viking 2019.

10https://files.taxfoundation.org/20190418120355/Facts-and-Figures-2019-PDF.pdf


This communication is produced by HSBC Private Banking, a division of HSBC Bank USA, N.A.

 

Where your location of residence differs from that of the HSBC entity publishing this communication, please refer to the Cross Border disclaimer at https://www.privatebanking.hsbc.com/disclaimer/cross-border-disclosure/.

 

This communication is provided to you for informational purposes only and is not a recommendation, offer or solicitation to purchase or sell any service, product, security, commodity, currency or other instrument. This communication does not consider your specific objectives, circumstances or needs, does not provide legal or tax advice, and does not identify or define any or all of the risks that may be associated with the purchase of products or services described herein. The information contained herein should not be construed as investment advice or a recommendation to purchase the products or securities described herein. Prior to making a financial or investment decision, you should conduct such investigation and analysis regarding the products described herein as you deem appropriate and to the extent you deem necessary obtain independent advice from competent legal, financial, tax, accounting and other professionals. No person is authorized to use this communication for any purpose other than the purpose stated above.

 

The information contained in this communication is derived from a variety of sources we believe to be reliable; however, we cannot guarantee its accuracy or completeness, nor shall we be liable for any incidental or consequential losses or damages including but not limited to errors (including errors of transmission), inaccuracies, omissions, changes in market factors or conditions, or any other circumstances beyond our control. The information, analysis and opinions contained herein constitute our present judgment which is subject to change at any time without notice.

 

HSBC Private Banking is the marketing name for the private banking business conducted by the principal private banking subsidiaries of the HSBC Group worldwide. In the United States, HSBC Private Banking offers banking services through HSBC Bank USA, N.A., trust services through HSBC Bank USA, N.A., Delaware trust services through HSBC Bank USA, N.A. – Delaware Trust Office and HSBC Trust Company (Delaware), N.A., securities and brokerage services through HSBC Securities (USA) Inc., member NYSE/ FINRA/SIPC and an affiliate of HSBC Bank USA, N.A., and traditional insurance products through HSBC Insurance Agency, (USA) Inc. affiliate of HSBC Bank, USA, N.A. HSBC Bank USA, N.A. is a Member FDIC. Private Banking may be carried out internationally by different HSBC legal entities according to local regulatory requirements. Some services are not available in certain locations.

 

Investment and insurance products are: Not a deposit or other obligation of the bank or any affiliates; Not FDIC insured or insured by any federal government agency of the United States; Not guaranteed by the bank or any of its affiliates; and are subject to investment risk, including possible loss of principal invested.

 

HSBC Private Banking does not provide legal, tax or accounting advice. Please consult with your professional advisors before making any financial decisions.

 

Copyright © 2022 HSBC Bank USA, N.A.
ALL RIGHTS RESERVED

Listening to what you have to say about services matters to us. It's easy to share your ideas, stay informed and join the conversation.