Pressed by Legislator, Nonprofit Foundations Agree to Invest in Minority-Led Organizations

Faced with legislation that would require them to disclose their ethnic composition and detail grants awarded to minority organizations, 10 of California’s largest foundations agreed Monday to a multimillion-dollar, multiyear investment in minority communities.

In return, Assemblyman Joe Coto, D-San Jose, dropped a bill that opponents said was an effort to impose racial diversity on charities and threatened to drive donors out of California.

Many foundations enjoy tax-exempt status. But according to a 2006 study by the Berkeley-based Greenlining Institute, which sponsored Coto’s legislation, only 3.6 percent of grant dollars from the nation’s top 24 private foundations went to minority-led organizations.

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The foundations—including the William and Flora Hewlett Foundation, the Ahmanson Foundation and the California Endowment—said in a joint statement that nonprofits play a critical role in addressing the challenges facing minority and low-income communities.

The foundations reaffirmed their commitment to help minority organizations compete for grants and said they would issue annual reports about their efforts.

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The deal was announced at a meeting of the Senate Committee on Business, Professions and Economic Development, which was scheduled to vote on Coto’s Assembly Bill 624.

The legislation had already cleared the Assembly and would have required foundations with assets of more than $250 million to disclose the ethnic, racial and gender makeup of their boards and staffs.

It also would have required them to make public the number of grants and dollars awarded to minority organizations.

In a letter published Monday in The Bee, Richard Atkinson, a member of the Koret Foundation and president emeritus of the University of California, derided the proposed legislation.

He called it an “intrusive attempt to redirect the distribution of charitable dollars away from legitimate nonprofits” to others “anointed as more ‘worthy’ by the state.”

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Fred Ali, president and chief executive officer of the Weingart Foundation, {snip} said the deal was reached “in a cooperative manner” by the foundations and the leadership of the Legislature’s Latino, African American and Asian/Pacific Islander caucuses.

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Other foundations involved in the agreement include the James Irvine Foundation, the UniHealth Foundation, Ralph M. Parsons Foundation, the California Wellness Foundation, the Annenberg Foundation and the David and Lucile Packard Foundation.