Aiming to help often ignored Black social innovators grow, Echoing Green is launching a $15.6 million fund to provide them capital.
Called the Signal Fund, the tool provides funding to social innovators at critical growth stages, according to a news release. The cash infusion will largely target and prioritize founders who have overlooked the potential for scalable social impact.
Despite being among the most influential drivers of social change, it was disclosed that leaders of color are being hit the hardest by insufficient funding. A social innovator is a person who uses entrepreneurial methods to provide solutions to societal problems and improve the well-being of the world.
For instance, research from Echoing Green and The Bridgespan Group revealed that revenues for Black-led organizations were 24% less than those of their white counterparts. The data also showed that donations to Black firms were 76% smaller than those of their peers led by whites.
Further, this study
showed parallel disparities with startups led by underrepresented founders, including women, who received just 43% of funding versus white male founders.“In the current economic climate, fundraising for entrepreneurs has become increasingly difficult,” Echoing Green President Cheryl L. Dorsey said in a statement. “Through Signal Fund, we are strengthening and de-risking a new pipeline of social innovators — ones that we believe will expand the set of leaders who are too often overlooked by mainstream philanthropy and financial institutions.”
She added, “This fund can help proven social innovators move past the proverbial valley of death that so many startups face, achieving organizational milestones recognizable to traditional investors without compromising impact.”
Echoing Green is a nonprofit that supplies seed funding to organizations. As part of a two-year pilot, the Signal Fund plans to make 20 investments in Echoing Green Fellowship recipients and provide them with $100,000 to $500,000 in catalytic capital during that period.
The fund was disclosed to have disbursed $3.6 million to 12 social innovators. As such, recipients have already leveraged an extra $18 million in funding for their organizations.
The Echoing Green Fellowship reported supporting nearly 1,000 innovators over the last 36 years, including notable leaders like first lady Michele Obama, 2024 TIME100 recipient Kennedy Odede, and the founders of Teach for America and One Acre Fund.
Check here for more details about the fund.