You’ve probably heard of the racial wealth gap: White Americans control nearly seven times as much wealth per household as black Americans do.

That discrepancy, argues Edgar Villanueva, translates directly into a racial philanthropy gap: a bias in how that wealth is dispersed, which keeps control away from people of color, and minimizes donations to groups run by people of color for the benefit of communities of color.

Instead, Villanueva, a veteran foundation official currently at the Schott Foundation for Public Education, argues that the lack of diversity in foundation hiring, and lack of social ties to nonwhite communities, has led the philanthropic sector to reinforce racial inequalities as much or more than it remedies them. In his book Decolonizing Wealth, Villanueva tries to lay out new approaches that foundations can use to break out of that pattern, and use the wealth they control as a way to empower marginalized communities.

We had a Skype conversation about the book, and Villanueva’s recommendations for donors, a few weeks ago. A transcript, edited for clarity and length, follows.

Dylan Matthews

Walk me through some of the racial equity problems facing philanthropy: What are some of the representational and grant-making gaps you’ve discovered?

Edgar Villanueva

Many families and many institutions that have amassed wealth have done so on the backs of people of color and indigenous people. One example I often share is my first job in philanthropy was in North Carolina, and it was all tobacco money. My office was on a plantation.

The R.J. Reynolds family had amassed all this wealth through the tobacco industry. Clearly, slave labor was a major part of that and helped to build this family’s fortune. There are multiple Reynolds foundations that now exist. I think that [money] should be given in a way that sort of centers and prioritizes giving in communities of color that helped amass that wealth.

The latest research that came out from the Philanthropic Initiative for Racial Equality shows that only about 8-9 percent of grant-making from foundations goes into communities of color [in the US].

And so, when you take the historical account as to how indigenous communities and how people of color have contributed to building wealth in this country, and the trauma that exists because of how wealth was accumulated, I think that it’s an easy case to make that philanthropic capital should at least be more inclusive of those communities.

I also think [part of the] race conversation [is] around who actually gets to control, allocate, manage, and spend that money. We have a major diversity issue. 92 percent of CEOs of foundations, 89 percent of executives on foundation boards, 81 percent of management for financial services and 86 percent of venture capital investors are white. We often give to people in our network, and to people that we know and look like us. And so because of that major diversity issue in philanthropy, resources are not going to communities of color.

Dylan Matthews

One of the more disturbing dynamics you write about is this phenomenon where organizations representing communities of color come in and are forced to beg philanthropic grant makers for resources that you argue were earned through processes of exploitation in the first place. Could you talk a bit about how that dynamic influences philanthropy?

Edgar Villanueva

This is where I connect some of the dynamics in philanthropy back to dynamics of colonization. It’s so important for us all to understand the history of this country and how wealth has been accumulated.

I don’t think anyone comes to work into a foundation with any intention to be racist or hurt people or harmed community, but it’s in that lack of understanding of how we’re doing our business that perpetuates the divisions between the haves and the have nots.

One easy example of that is when you look at the application process for many foundations and the bar that we hold organizations to, and who we esteem to be experts in the work that we’re funding. There are no types of adjustments made for folks who are coming from communities of color, or from backgrounds that have been marginalized.

I’ve been in many, many conversations where we’ve been discussing who gets the money, right? We’re looking at the slate of applications and folks will just say things like, “Well, this particular organization, they have more resources, they’re more financially viable, so this is a safer investment.”

For the past 70 years, foundations have [already] been funding that type of nonprofit. So of course they have more resources in the bank, and a bigger staff, and the development director who can write a very strong grant proposal. It’s very simple things like that that I’m bringing to the attention of grant makers.

If we as a sector are really sincere about equity, and not just diversity but equity, that means that we have to overcompensate and give a boost to those organizations that have not been receiving resources for the past 70 years. We’ve got to make up for lost time.

Dylan Matthews

How does that play out internationally? You’re writing in an American context, and you give examples of trying to do community work with marginalized communities in the US. For US foundations that want to work on global poverty or global health — what would you say they should do to avoid perpetuating some of these cycles of underinvestment in marginalized communities?

Edgar Villanueva

I quote a survey in the book that [asked] folks in the UK about how they felt about the British Empire colonizing the world and controlling most of the land and most of the people in the world at one point, and about 60 percent of folks in the UK thought it was a positive thing.

The way that connects with philanthropy there, many of those charities are established from colonial wealth, and it is just absolutely taboo to even have a real conversation about the history and the origins.

I was in one particular meeting with about 30 folks who work in philanthropy. And it was a very painful conversation. People were literally in tears — especially people of color working in these institutions — because of the lack of being able to have a transparent conversation.

None of these folks are trying to overthrow these foundations and shut them down. But the fact that you are commissioned to address social problems in your country, but the root of a lot of those social problems, the systemic racism and the colonization, is not something that is an option to unpack [is a problem]. I felt like I had gone back in time a little bit in some of those conversations, because at least in the US it’s a growing movement to talk more and more about race openly.

Now contrast that to Canada — in Canada they had a decade of truth and reconciliation and it’s widely understood, their history, what has happened to First Nations communities there. For 10 years, there were these community conversations of listening and deeply connecting and coming to terms with their sins as a country.

Things aren’t perfect by any stretch of the imagination, but because they’ve done that work as a society, that translates into philanthropy. I spoke at their national community foundation conference and I went on this tour with events in Vancouver and Toronto, and the philanthropic community there — it’s not starting at ground zero. They understand that what they are trying to do in communities is directly connected to what has historically happened.

We haven’t had a process of truth and reconciliation.

Dylan Matthews

You mentioned the truth and reconciliation process, but your book also goes into a bunch of other concrete things that individual foundations can try to do to heal these inequities. Walk me through what that looks like — if a program officer at a foundation is reading this interview, what might they do to structure their next grant to promote healing and overcoming historical injustices?

Edgar Villanueva

There are some very easy things I think that funders can do right now. One is actually just looking at your data and understanding it. Some foundations are not collecting demographic data. If you’re not collecting demographic data — who you’re funding, what the leadership of those organizations looks like, and who is benefiting from those resources — that’s an easy fix that you should begin doing immediately.

We’ve got to sometimes make grants outside the box, outside of our processes that often create barriers for these types of organizations.

I think we have to, as a sector, understand that we have a major white dominant culture and we need to be experts at everything. And we will never be experts on these communities because of how white we are, how privileged we are. And so we have to settle into a place that we just really trust where others are the experts, and move money there.

The other thing that I think is really important is many folks working in foundations have little to no information at all about the foundation’s investments. There’s a firewall that exists, and you just have your portfolio and you’re giving out money. I think more and more there’s a call for transparency around, the actual investments and assets that foundations have.

The majority of philanthropic capital — $890 billion — is tied up in Wall Street and investments that are very values-neutral. I have heard stories of foundations that are literally making grants to save the environment, but then their investments are in fossil fuels. We’ve got to think about the majority of our capital, which is in those investments — how do we shift that in a way that is actually aligned with our mission? Otherwise, I have a fundamental question around what is the net value of philanthropy, if [that] might be canceling out the good that we’re trying to do.

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