(BLACK PR WIRE) TechMission has published a report that Google’s Grants program may be hurting Black and Latino-led nonprofits and making the digital divide among nonprofits worse (see http://www.urbanministry.org/nonprofitdiversity). In the past few years, Google has “given away” $300 million in grants of “free” advertising through Google AdWords. The problem is that Google Grants works by giving away “virtual money” that people can then use to bid on ads. They have essentially flooded the market for nonprofit ads with $300 million in virtual money which drives up the prices for nonprofits not receiving grants, but are still bidding on the same search terms. Economic theory would say that this acts as a “tax” on other users, so that only $150 million is donated by Google; however, the other $150 million comes from the increased bid cost for other advertisers, which are primarily nonprofits.
TechMission is a nonprofit organization which runs the largest association of Black and Latino-led nonprofits addressing the digital divide and manages UrbanMinistry.org, which is one of the most visited web portals of Black and Latino nonprofit leaders. The model developed by TechMission estimates that while White and Asian-led nonprofits have secured $157 million in benefits through Google Grants, Black and Latino-led nonprofits collectively have a net loss of $7.3 million. This is effectively a $7.3 million tax on Black and Latino-led nonprofits caused by paying increased advertising fees to provide a subsidy to White-led nonprofits.
The model was developed based on an assumption that in the USA, Google gives 95% of its grants to White and Asian-led nonprofits, while only 5% to Black and Latino-led nonprofits.
The report speculates on the following reasons for this result.
1. Google leaves most of the grantmaking decisions to regular employees are disproportionately White and Asian and from elite schools. This creates a bias in the process. Most progressive grantmakers will ensure that those involved in the grantmaking process are more reflective of the culture and communities they are trying to serve.
2. Google has some of the strongest restrictions toward funding faith-based organizations among any technology company. TechMission’s research indicates that by not funding faith-based organizations, then they are cutting their chances of funding a Black or Latino-led nonprofit by 50%.