ABSTRACT This article explores the challenges of applying for and receiving music funding for Canadian music workers identifying as Indigenous, Black, or as a person of colour (IBPOC). Using survey data from the Canadian Live Music Association we find evidence of a racialized gap in music funding. Interviews with IBPOC music workers reveal the causes and consequences of the racial funding gap: there are limitations to worker agency wrought by gaps in knowledge of funding opportunities; perceived bias in favour of majority White-racialized music genres; and bureaucratic contradictions in funding applications that disadvantage IBPOC applicants. We argue that the conceptual tenets of racialized organizations and theories of racial inequality in cultural policy and creative organizations explain why gaps in funding persist, despite stated efforts to the contrary. We conclude by outlining a model of how music funding organizations exemplify racializing processes and offer policy implications for scholars and practitioners of arts funding.