A Higher Ed Funder Pivots, Recognizing Racial Inequity as its Biggest Barrier

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The Lumina Foundation is working on a 25-year goal to increase the proportion of Americans with high-quality, post-secondary credentials, and it can’t get there without addressing racial inequity in the United States. Philanthropy has long directed funding toward equity, and this topic is gaining increased attention in the field. In 2019, Lumina made its dedication to racial equity a more explicit, core part of its work.

The latest step in a journey it’s been on for several years, this higher education funder out of Indianapolis recently published a new commitment to racial equity and announced a new round of aligned grants.

Well-documented disparities in education are driving this heightened focus for Lumina. Racial inequity persists throughout U.S. society, and higher ed is certainly no exception. The foundation has been tracking these numbers through a series of reports that chart post-high-school educational attainment of Americans between the ages of 25 and 64.

According to Lumina’s Stronger Nation reports, between 2008 and 2018, the national average rose 10 points to 48%. So that’s good news, but if post-secondary certificates are excluded, and only achievements of associate degrees or higher are counted, the 2018 average falls to 43%. And within this frame, white achievement was at 48%, while black achievement was at about 32% and Native American and Hispanic rates were around 25%.

When people of color do complete higher education, they face ongoing hurdles, including student debt and enduring racial inequities in employment and pay rates. The pandemic’s disproportionate secondary effects on communities of color can only worsen these established trends.

Public disinvestment in higher education is also a major ongoing issue. It was noted as a concern of funders in a 2019 report from Grantmakers for Education (GFE), in which respondents anticipated consequences of this lack of funding to include “shutting out more and more low-income students from obtaining the degree of their choice.”

Philanthropy is increasingly responding to these racial imbalances in post-secondary learning. In late 2019, a Rockefeller Philanthropy Advisors and TIAA Institute study stated foundations’ support for “low-income students and students of color to begin and complete a postsecondary degree” was “the dominant trend in private philanthropy” for higher ed. And GFE’s 2019 report found 75% of education funders now focus on ethnic and/or racial minorities, low-income populations, immigrants and refugees, and other groups.

Lumina is not alone in its greater focus on race and equity in higher ed. As part of its new efforts in this regard, the foundation recently awarded $475,000 to five funding affinity groups to advance racial equity efforts in the sector.

Lumina’s Vision to Get More Americans Certified

Lumina was created when Sallie Mae bought the nation’s largest student loan guarantor from USA Group in 2000, and its endowment now exceeds $1 billion. The private foundation aims to increase access to post-secondary education that translates into job market success. It “[envisions] a system that is easy to navigate, delivers fair results, and meets the nation’s need for talent through a broad range of credentials.”

Lumina’s core mission, called Goal 2025, is to increase the proportion of working-age Americans with high-quality degrees and other credentials to 60% by 2025.

To get there, Lumina supports many strategies, including education systems based on competency rather than credit, transparent credentialing (clearer descriptions of the needs and requirements behind credentials), efforts to increase the number of associates degrees awarded, easing transitions to higher ed for military personnel and young adults, and more. It funds individual schools and universities, nonprofits and research groups, conducts state and federal policy work, practices impact investing, and encourages cross-sector collaboration.

Between 2003 and 2019, Lumina granted more than $542 million, according to current Foundation Center data. Some of its top grantees during this time were MRDC, an education and social policy research group; the Tides Center, a key clearinghouse for progressive money, to fund post-secondary programs; and the American Association of Community Colleges, which each received more than $14 million during these years. In 2017, it granted $46 million, with one of the largest grants of $666,700 going to Dillard University in New Orleans to “reduce attainment gaps,” among other goals.

Racial Equity as a Key Component of Funding for Higher Ed

In much of its grantmaking, improving access is a big focus, and Lumina has long recognized racial inequity as a barrier to its goals. “We believe that without intentional and focused efforts to address inequality in postsecondary attainment, gaps in opportunity will continue to grow,” it stated in its 2017-2020 strategic plan, which specifically highlights the challenges faced by black, Hispanic and Native students.

As it was for many funders, 2017 was a pivotal year for the foundation. Lumina’s leaders saw Unite the Right in Charlottesville as a call to action and gave a series of grants focused explicitly on racial justice. The bulk of this $2.5 million commitment ($1 million) went to research into racial climates on campuses, in partnership with Rockefeller Philanthropy Advisors. Leadership grants capped at $100,000 went to schools pursuing anti-racism initiatives on campus, and some smaller school grants were also made available. To get more philanthropies working in this realm, Lumina also granted the Council on Foundations, Grantmakers for Education, and Independent Sector $100,000 each to host professional development activities.

Recently, Lumina made another round of grants with a racial equity lens, focused on the philanthropic sector. Just before the COVID-19 outbreak, it awarded grants to five groups dedicated to advancing racial equity. The Association of Black Foundation Executives (ABFE), Hispanics in Philanthropy, CHANGE Philanthropy, Funders for LGBTQ Issues, and Asian Americans/Pacific Islanders in Philanthropy (AAPIP) will now conduct a variety of activities relating to racial equity in grantmaking, including research, advocacy, trainings and collaboration.

And late last year, Lumina made its focus even more explicit and targeted when it released a new commitment to racial equity. The foundation now frames all of its work as stemming from a dual commitment to racial equity and quality credentials. The foundation seeks to promote post-secondary education systems that create “fair and just outcomes for people of color,” while also ensuring that degrees and credentials “reflect the learning necessary for workplace success and informed citizenship.” Its newly outlined commitment to quality credentials also has a strong racial focus and includes goals like promoting quality assurance and encouraging public funding for students in need.

As part of the new race-centered outlook, Lumina is now applying an equity lens to its staff makeup and training, its grantmaking and investments, and its efforts to influence the philanthropic field.

Susan Johnson, Lumina director of organizational development and philanthropic practice, says this new commitment differs from its first equity statement of six years ago, which focused on how its partners could address equity, and “said nothing about our commitment as an organization or as individuals within the organization.” She says the foundation team is engaging in self-examination, including through writing and publicly sharing personal equity narratives. These expressions are “an opportunity to be more authentic as a foundation” and demonstrate Lumina’s commitment to center equity in all its work, she says.

“[In] my 11 years at Lumina, I have never been asked to be anything other than who I am,” Johnson wrote in her personal narrative. “I am unapologetic in sharing what it’s like to be a Black woman in a white, male-dominated field… I am unapologetic in focusing on racial equity in my work.”

In some ways, Lumina’s journey in this realm mirrors that of the Nellie Mae Foundation (NMEF, another grantmaker that emerged from a Sallie Mae acquisition). NMEF also recently adopted a racial focus as part of a very targeted funding aim and is also pursuing both internal and external equity reforms. NMEF wants 80% of New England students to be college- and career-ready by 2030. In 2018, its President and CEO Nick Donohue told us the foundation believes this vision “is simply unattainable without specific and targeted attention to the racial inequities that exist in our region.”

Funding Higher Ed and Equity During the Pandemic and Beyond

As we’ve reported, the pandemic is raising a variety of questions about higher ed philanthropy. For instance, how will universities’ fundraising priorities be different after the crisis? According to a recent GFE report analyzing early trends during the pandemic, out of 606 rapid-response funds, only 7% even partially address the disruption to student learning in both K-12 and higher education.

COVID-19 is worsening the interwoven issues of social, racial and economic inequity in the country and in education. When the pandemic closed college campuses, “[Many] Americans simply assumed that all students would have the necessary resources to continue their education with little disruption.” These include a home, high-speed internet access and “access to mental health resources,” Johnson says. Lumina tries to dispel these misconceptions and present a more accurate picture of contemporary students and their struggles through its Today’s Students web project.

According to its site, Lumina has initiated several responses to COVID, including accelerating payout on approved grants and expressing a willingness to “talk about adjusting, delaying or waiving terms and timelines.” Johnson says it created two new funds to serve national and local Indianapolis grantees during this crisis, to which it has directed about $1.5 million.

Lumina is also publishing advice pieces on best practices for institutions of higher learning and local, state and federal governments at this time. They cover topics like student loan forgiveness, online infrastructure development and additional wrap-around supports for students of color and/or those who were already struggling financially before the pandemic.

Years before COVID, in the 2017-2020 strategic plan, Lumina set a number of benchmarks for this year. Based on its estimated trajectories for credentialing, it aimed to increase attainment by 5.9 million above the current rates by the end of 2020. Johnson says the foundation considers itself on track to reach this target, and that it’s possible to attain Goal 2025 to increase the proportion of Americans with high-quality credentials to 60%. But she says reaching Goal 2025 “will require effort far beyond what Lumina can provide.” She says, “Policymakers, employers, philanthropy, civic and social organizations, students and families” will need to work together.