WCTEO: Becoming an Anti-racist Organization: Legal Issues

The 25th Western Conference on Tax Exempt Organizations takes place virtually on Thursday and Friday, December 2-3, and I’m very excited to be moderating a session on Becoming an Anti-racist Organization: Legal Issues. The session features an esteemed panel: Chai Feldblum, Lauren Haverlock, Jean Tom, and Cherie Williams. Register for the WCTEO here (a bargain at $100).

When we talk about becoming an anti-racist organization, we’re not talking about ensuring that the leadership is not racist; we’re talking about becoming an organization that has as one of its core values the fight against racist ideas, behavior, policies, and structures. This is a journey that will take continual work.

Some Quotes for Context

  • “The opposite of racist isn’t ‘not racist.’ It is ‘anti-racist.’ What’s the difference? One endorses either the idea of a racial hierarchy as a racist, or racial equality as an anti-racist. One either believes problems are rooted in groups of people, as a racist, or locates the roots of problems in power and policies, as an anti-racist. One either allows racial inequities to persevere, as a racist, or confronts racial inequities, as an anti-racist. There is no in-between safe space of ‘not racist.” ― Ibram X. Kendi
  • “The beauty of anti-racism is that you don’t have to pretend to be free of racism to be anti-racist. Anti-racism is the commitment to fight racism wherever you find it, including in yourself. And it’s the only way forward.” ― Ijoema Oluo
  • “If you have come to help me you are wasting your time. But if you recognize that your liberation and mine are bound up together, we can walk together.” — Lila Watson
  • “Philanthropy is commendable but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.” ― Martin Luther King Jr.
  • “We’ve always assumed that people would just participate in the process that we created. We didn’t realize that we really have to be intentional by inviting people to participate, by making sure that we’re reaching out to organizations that are led by African Americans or Asian Americans or Native Americans, to let them know that they belong in our process.” ― Foundation Leader
  • “The Anti-Racist Organization helps people of color become more empowered through taking leadership, sharing in the power, transforming the organizational norms and culture, challenging white allies and other people of color, sharing in decisions about how the organizations resources will be spent, what work gets done as well as how it gets done, the setting of priorities, and allowing people of color to make the same mistakes as white people.” ― Western States Center Anti-Racist Organizational Development Resource Book


Anti-Racism is defined as the work of actively opposing racism by advocating for changes in political, economic, and social life. Anti-racism tends to be an individualized approach, and set up in opposition to individual racist behaviors and impacts. – Racial Equity Tools

Institutional Racism occurs in an organization. These are discriminatory treatments, unfair policies, or biased practices based on race that result in inequitable outcomes for whites over people of color and extend considerably beyond prejudice. These institutional policies often never mention any racial group, but the intent is to create advantages. – National Museum of African American History and Culture (NMAAHC)

Structural racism​ is the overarching system of racial bias across institutions and society. These systems give privileges to white people resulting in disadvantages to people of color. – NMAAHC

Selected Legal Issues with Becoming an Anti-Racist Organization

The following is only a partial list and offered with acknowledgment that legal issues are just one piece of a highly complex network of interconnected issues:

  • Governance (adding diversity, promoting inclusion, building equity, recognizing additional burdens and contributions of BIPOC directors through reimbursements and compensation, duty of care and consideration of ecosystem, shared leadership)
  • Mission-consistency (selection of activities, framing of policies, UBIT considerations)
  • Employment (discrimination, harassment, distributed leadership, labor movements)
  • Internships and Volunteers (selection, terminations, compensation, insurance)
  • Contracts (racial preferences, vendor selection)
  • Grant Agreements (racial preferences, applications, reports)
  • Lobbying and Advocacy (lobbying limits, 501(h) election, education vs. political campaign intervention, boycotts, tortious interference)
  • Data and Privacy (selection, ownership, control, storage, security, uses, automated decision-making, sharing with other persons/entities)
  • Communications and Publications (intellectual property, Creative Commons, defamation, platform terms and conditions)
  • Subsidiaries and Affiliates (choice of entity, tax status, equity participation, UPMIFA)
  • Collaborations and Mergers (surviving corporation, terms and conditions, terminology)
  • Fiscal sponsorships (models, disclosure to Model C grantees of filing and tax obligations)
  • Fundraising (donor restrictions, endowments, naming rights, online, crypto, NFTs, DAOs, donor advised funds, quid pro quo contributions, registration, professional fundraisers, commercial coventurers, fundraising platforms)
  • Investments (PRIs, MRIs, impact investments, UPMIFA)
  • Private benefit – Operational Test
  • Public policy – Operational Test (protests, civil disobedience)
  • Admissions (racial preferences, discounts)
  • Scholarships, Awards (racial preferences)

Selected Online Resources

The Four Principles of Purpose-Driven Board Leadership (A. Wallestad, Stanford Social Innovation Review, Mar. 10, 2021)

Purpose-Driven Board Leadership, Legally Speaking (G. Takagi, Nonprofit Law Blog, Mar. 29, 2021)

Diversity, Equity, and Inclusion in Nonprofit Bylaws (M. Berger, Nonprofit Law Blog, Oct. 18, 2018)

Anti-Discrimination Laws – Section 1981 (G. Takagi, Nonprofit Law Blog, Nov. 10, 2021)

Affirmative Action Plans—A Potentially Important Safeguard for Race-Based Grantmaking (D. Chaya Hoff, Nonprofit Law Blog, Nov. 16, 2021)

Guiding a Giving Response to Anti-Black Injustice (Association of Black Foundation Executives, The Bridgespan Group, Aug. 25, 2020)

The Problem of Nonprofit Data and Equity (T. Kronzak, NTEN, Feb. 24, 2021)

Model C Fiscal Sponsorship: The More Formal, the Better (S. Chiodini, Nonprofit Law Matters, Jan. 25, 2012)

How Foundations Are Using Impact Investing to Advance Racial Equity (Stanford Social Innovation Review)

The Case for Selective Discrimination (A. Tomkin, Nonprofit Quarterly, Nov. 18, 2021)