Institutional racism is primarily characterized by overt acts of discrimination by individuals within an institution rather than by systemic policies that disadvantage minority groups.

Institutional racism refers to the ways in which laws, policies, and practices within an organization or society can create disadvantages for certain racial groups, even if there are no overt acts of discrimination by individuals. This means that the rules and systems in place can favor one group over another, leading to unequal treatment and opportunities. For example, if a school has a policy that requires all students to take a certain test for advanced placement, but the test is biased against students from certain backgrounds, it can limit their chances of being placed in advanced classes. This kind of racism is often hidden in the structure of institutions rather than being obvious acts of discrimination. Understanding institutional racism helps us see that change is needed not just in people's attitudes, but also in the systems that affect people's lives.