Posted on July 28, 2008

Shaking Down Philanthropies

Wall Street Journal, July 26, 2008


{snip} A proposed bill there would have required foundations with more than $250 million in assets to report the racial, gender and sexual orientation of their board members, staffs and grantees. The bill’s sponsors recently agreed to drop the issue in return for a political payoff of millions of dollars from 10 of the state’s biggest charities.

In 2007, state representative Joe Coto introduced “The Foundation Diversity and Transparency Act” at the behest of the Berkeley-based activist group, Greenlining. The organization claimed that though “communities of color” made up the majority of Californians, the state’s foundations were spending only 5% of their dollars on them. {snip}

{snip} Greenlining only counts money as going to minorities if it’s given to organizations whose board and staff are more than 50% minority. Thus an inner-city Catholic school with a 95% black population wouldn’t qualify if its teachers were mostly white. As well, these are private foundations whose donors gave money for specific causes, such as cancer treatments or the environment. Presumably they’d like the money to go to people who can accomplish these goals most effectively, rather than to some pol’s allies.

Despite the objections of the state’s nonprofit sector to this remarkable government grab, the bill passed through the Democrat-controlled assembly and was heard this spring by the state Senate’s business and economic development committee. Mark Ridley-Thomas, the committee chair and head of the black caucus, had the votes to get it out of committee and through the Senate. Locked in a tight primary race for Los Angeles County Board of Supervisors, Mr. Ridley-Thomas apparently was playing this issue for all it was worth, promising his South Central L.A. constituents that he would, as California political blogger Stephen Frank put it, “make sure the rich white foundations would give their money to local nonprofits.”

Dr. Robert Ross, president and CEO of the California Endowment, a private health foundation that works with underserved populations, was at the Senate hearing. He reports that the state’s foundations “were roughed up pretty badly.” The message, from the bill’s supporters, he says, was that “well-heeled philanthropy is too busy spending money on opera and museums of fine art to make their resources available to minority and low-income communities.” But there was room for compromise, apparently. “Mr. Ridley-Thomas related to us, and to me personally, ‘If you guys show some problem-solving leadership on this, we’ll look to that kindly.’” {snip}

Dr. Ross and his colleagues agreed that by the end of the calendar year they would propose multiyear, multimillion-dollar initiatives to improve the access of minority-led organizations to foundation money and to help “train a diverse pipeline of executives, staff and board members for the nonprofit and philanthropic sectors.” Neither Dr. Ross nor his colleagues at other foundations were willing to give us a specific figure for the commitment, but Orson Aguilar, the incoming executive director at Greenlining, says he’s expecting somewhere in the range of $300 million to $500 million over the next five years.


{snip} Foundations devoted to environmental change, [Orson Aguilar, the incoming executive director at Greenlining] notes, should give money to minority-led organizations because “communities of color suffer most from global warming, if you look at asthma rates.”

When we last wrote about this topic (“The Color of Charity,” Feb. 4), we quoted a letter by Paul Brest, president of the William and Flora Hewlett Foundation, California’s largest foundation, to the state assembly: “[Our] fundamental operating principle is to direct our resources to organizations that have the promise of making the greatest difference in achieving [philanthropic] goals. Thus, we do not focus on the racial composition of our grantees, but rather on how to achieve measurable impact in improving the lives of the communities that our grant recipients serve.” This is still an eloquent summary of the problems with diversity initiatives. {snip}