Facebook's "vexing and heartbreaking" decisions are causing significant setbacks for civil rights, an audit commissioned by the company says.
The two-year-long review says its actions have left many activists "disheartened, frustrated and angry".
Facebook has already said it will make some - but not all - of the changes called for in the 100-page report.
The official number of advertisers boycotting Facebook over its civil-rights policy is now at nearly 1,000.
Facebook commissioned the review in May 2018, a month after founder Mark Zuckerberg faced intense questioning at a congressional hearing.
"With each success, the auditors became more hopeful that Facebook would develop a more coherent and positive plan of action that demonstrated, in word and deed, the company's commitment to civil rights," it says.
"Unfortunately, in our view Facebook's approach to civil rights remains too reactive and piecemeal.
"Many in the civil rights community have become disheartened, frustrated and angry after years of engagement where they implored the company to do more to advance equality and fight discrimination, while also safeguarding free expression."
But the audit report also praises Facebook for progress in some areas, such as its improved consultations with rights groups.
Facebook said the report was "the beginning of the journey, not the end".
"What has become increasingly clear is that we have a long way to go," it said.
"As hard as it has been to have our shortcomings exposed by experts, it has undoubtedly been a really important process for our company."
The auditors also referenced Facebook's decision to allow a controversial post from US President Donald Trump to remain on the platform.
- Facebook staff anger over Trump post
- Zuckerberg accused of setting dangerous precedent
"When it means that powerful politicians do not have to abide by the same rules that everyone else does, a hierarchy of speech is created that privileges certain voices over less powerful voices," the report says.
It calls for:
- a more effective policy to tackle voter suppression that "prohibits content like the Trump voting posts" and more consistent enforcement ahead of the US presidential election at the start of November
- civil rights to be "more visible" and made a consistent priority in Facebook's decision-making
- Facebook to invest more in addressing "organised hate" against Muslim, Jewish people and other groups
- a ban on the "praise" and "support" of the ideas underpinning white nationalism "even where the terms themselves are not used"
- more concrete, specific actions to address worries about bias in the company's algorithms
"This report outlines a number of positive and consequential steps that the company has taken but at this point in history, the auditors are concerned that those gains could be obscured by the vexing and heartbreaking decisions Facebook has made that represent significant setbacks for civil rights," it adds.
Chief operating officer Sheryl Sandberg said the audit had already had a "profound effect" on the company and Facebook had already acted on many of its recommendations.
"While we won't be making every change they call for, we will put more of their proposals into practice soon," she said.
She also noted that two years ago, the company could not have predicted the audit would be published at a time of a major advertising boycott of Facebook.
Organisers of the boycott said a meeting with Facebook's senior management this week, including Ms Sandberg and Mr Zuckerberg, had been "disappointing".
"It was abundantly clear in our meeting today that Mark Zuckerberg and the Facebook team is not yet ready to address the vitriolic hate on their platform," the Stop hate for Profit group said, adding the company would not respond directly to the demands of the boycott.
And it accused Mr Zuckerberg of offering "the same old defence" society had "heard too many times before".
"Facebook wants us to accept the same old rhetoric, repackaged as a fresh response," it said.
Color of Change president Rashad Robinson also said the meeting "was a disappointment".
This audit is grim reading for Facebook.
What makes it so significant is the report looks at whether Facebook itself is driving people towards extremism.
"Facebook should do everything in its power to prevent its tools and algorithms from driving people toward self-reinforcing echo chambers of extremism," it says.
And that is not just a criticism there is nasty stuff on the platform.
It is criticism the platform itself may drive hate.
Failure to act can have dangerous and life-threatening real-world consequences, the report says.
And it will add momentum to the Facebook ads boycott that had gone a bit quiet over the past few days.
Meanwhile, it has emerged Facebook's much-lauded oversight board will not now launch until late-autumn. The board will be an independent body that can decide what kind of content can and cannot be on Facebook - with the power to overrule the company's own decisions.
When asked, the Oversight Board Administration said the tweet did not necessarily mean the start date would be after the US Presidential election on 3 November.
"There has been no change to the oversight board's timing for becoming fully operational, and we expect it to begin its work in the coming months," it told the BBC.
"No effort is being made to avoid any particular event, and the board aims to begin its work as early as possible. No exact date can be set yet as the technical and operational systems are still being set up."