A grainy screen and distorted audio over Zoom can’t disguise the fact that Yodit Mesfin Johnson is processing a substantial amount of grief and anger right now.
Following long months of quarantine and disruption, and now absorbing the murder of George Floyd, Mesfin Johnson, the president & CEO of Detroit- and Ann Arbor-based nonprofit support organization Nonprofit Enterprise at Work (NEW), has been working 12 to 15-hour days shoring up resources for her clients in Michigan’s nonprofit sector, which employs approximately 11% of the state’s workforce.
Throughout her long career in nonprofits, Mesfin Johnson has had a close-up view on how the sector has been impacted by the racism that has led, among so many other inequities, to the disproportionate impact of COVID-19 in Black communities and the deaths of Black Americans like Floyd at the hands of police. In her daily work with nonprofit human services organizations, racism is front-and-center. And during COVID-19, that’s only been intensified.
![]()
Yodit Mesfin Johnson. Courtesy photo.
“I'm seeing and experiencing people of color who are working on the front lines,” says Mesfin Johnson. “Few of us are on the boards of nonprofits, and more of us are program staff. And I am seeing them navigate real trauma, and still having to show up to make sure families get fed and get help. I'm sitting, as a woman of color, in spaces with other people of color who are burnt out and exhausted.”
The experiences of recent months have led Mesfin Johnson and her colleagues to begin discussing more openly how the systems within which the nonprofit sector operates often serve to perpetuate racial and economic inequality. They say that a lack of diverse leadership, inadequate funding, and restrictions on how funding can be used are some of the factors crippling the effectiveness of nonprofits as a vehicle for social change. During COVID-19, some of those factors have begun to change out of necessity, and Mesfin Johnson and other nonprofit leaders are thinking about how those changes can be made permanent.
Allandra Bulgur is the executive director of Co.Act Detroit, a hub launched in 2019 in Detroit to facilitate collaborative action between the region’s nonprofit organizations. She began coordinating a weekly call for nonprofit support leaders to come together and share their challenges and learnings.
“It’s really about building the pieces to the system's level response to the crisis, but also beyond the acute experience of the crisis,” says Bulgur. “A lot of these challenges have been long-standing, and our challenge now is to amplify the fact that there is a root cause of injustice and inequity in the challenges that nonprofits face, and take this opportunity to double down on solutions.”
As the responsibility for basic human services like food, health, and education has been pushed out of the public sector and onto the nonprofit sector over the years, Mesfin Johnson says, philanthropic dollars have not kept up. In Washtenaw County, she says local philanthropic dollars are typically able to fund less than half of the overall need.
![]()
Allandra Bulger. Courtesy J. Lindsey Photography
That gap, Mesfin Johnson says, goes some way towards explaining continued poverty in the United States. But the structures governing and funding nonprofits also play a role, she adds.
“Many foundations were formed as tax shelters for wealthy families and businesses that have extracted labor and resources and then put those resources into an endowment, and are only required to give off just 5% of that,” she says. “So what I'm seeing in light of the virus is that an already overtaxed sector is taxed even more. We are the ones that are helping the employees of the businesses that have shut down and sectors that have laid people off. They are coming to us for food and healthcare.”
Shamyle Dobbs is CEO of Michigan Community Resources, a Detroit-based nonprofit that supports grassroots organizations serving low-income communities in the city. She points out that leadership in foundations often skews white, and that can mean funding programs are often out-of-touch with the needs of communities of color on the ground.
“There is a lack of diversity in philanthropy. You have boards of trustees that are largely white,” says Dobbs. “The very essence of what we're trying to change will not be changed if the structures by which we're leading create solutions that are baked in white supremacy.”
And, Mesfin Johnson points out, nonprofits, which emerged during the progressive era as a way to coalesce people and resources around a common social mission, must abide by constraints that are modeled on capitalism and placed on them by philanthropy. Those limitations can often impede the ability of nonprofits to approach problems collectively.
“I think that we have created a nonprofit industrial complex that now depends upon people staying employed, but doesn't have an incentive to shift and move on to the next issue or the next opportunity,” says Mesfin Johnson. She points to nimble mutual aid networks that have emerged during the pandemic to serve communities' needs, as well as worker-owned cooperatives, as alternatives to the current nonprofit model.
But some of those restrictions have begun to change in the wake of the pandemic out of necessity. Foundations have begun loosening restrictions on funding, giving more, relaxing requirements and trusting nonprofit leaders to do their work.
![]()
Shamyle Dobbs. Photo by Nick Hagen.
For a nonprofit, the ability to use restricted program funds for unrestricted operating costs is a substantial benefit -- especially during a time when opportunities for earned revenue and in-person fundraisers have virtually dried up. During COVID-19 it has meant the difference between many organizations being able to continue operating vs. shutting down entirely. Mesfin Johnson would like to see funders sustain more unrestricted giving over time.
“Unrestricted dollars help because they can allow us over time to build in those reserves,” she says. “Without it, you only ever get enough money to run the next program, but not to be strategic or adaptive or responsive, which is what unrestricted cash allows us to do. Otherwise, we're only ever making incremental changes.”
Mesfin Johnson hopes that by continuing to have candid, collaborative conversations like those being convened by Co.Act, the region’s nonprofit leaders can find a way to deepen their relationships and create a shared vision. She’d like to see the sector to get away from what she calls a “panic and trauma response” and move towards “values-driven response” which is less about individual or organizational survival and more about finding flexible and collaborative ways to make meaningful change in communities.”
And acknowledging the role of racism in creating both the challenges faced in the community served by nonprofits, as well as the structures that can inhibit their success, will be key to moving forward, she adds. And it must be called by its name.
“I think we just have to call the thing a thing,” adds Dobbs, “and figure out how to deal with it, and be bold.”
This story is part of the Nonprofit Journal Project, an initiative to invited nonprofit leaders across Metro Detroit to contribute their thoughts via journal entries on how COVID-19 is impacting the nonprofit sector—and how they are innovating. This series is made possible with the generous support of our partners, the Michigan Nonprofit Association and Co.ACT.