Institutional racism is a form of racism that takes place in institutions like universities, banks or corporations. The difference between individual bigotry and institutional racism lies in the set policies and practices of an organization that discriminate against an ethnic group and subsequently disadvantage that particular group or race.

The results of institutional racism are most evident when minorities are barred from joining or attending various institutions such as schools and clubs. Victims of institutional racism may be denied fair access to resources such as health care, bank loans and employment opportunities. Other often cited examples of institutional racism are the unusually high proportion of minorities in American prisons and the disparity between the average incomes of minorities and white Americans.