Foundations Oppose Call to Target Grants

Mike Spector, Wall Street Journal, March 23, 2009

A prominent philanthropy watchdog has riled some foundations by releasing a report suggesting they should devote half their grants to minorities, the poor and other disadvantaged groups.

The report, released this month by the National Committee for Responsive Philanthropy, argued that foundations should meet a handful of benchmarks to practice “philanthropy at its best,” including making half their annual grants to “lower-income communities, communities of color and other marginalized groups, broadly defined.”

Several foundation leaders have called that benchmark overly prescriptive and argued it could exclude philanthropies that pursue missions such as the arts, medical research and education–areas that might not always directly affect the groups identified by the committee. In addition, the committee lobbies Capitol Hill, so some fear the report could spur stricter regulation of foundations’ activities.

Criticism of the report has intensified in recent days, with a well-known foundation president blasting the report’s findings on an Internet blog and another large foundation canceling its membership with the committee. The committee in turn circulated a memo attempting to shoot down criticisms.

Aaron Dorfman, the committee’s executive director, said his group doesn’t seek to codify the benchmarks and that he has been “surprised by the amount of venom” the report’s suggestions have produced.

“We couldn’t have been clearer that this isn’t intended to be a set of legislative suggestions or mandates in any way,” Mr. Dorfman said. “This is a document to spark discussions among the leaders of our nation’s grant makers and to challenge them to be more responsive to marginalized communities.”

The debate over the report comes as foundations face increased economic and political pressures. Foundation assets fell about 28% last year amid tumbling world-wide markets, according to the Council on Foundations, a Washington group that lobbies on behalf of more than 2,000 grant makers.

The committee’s philanthropy benchmark report found that most foundations steer about a third of their grants toward “marginalized groups,” defined to include the poor, minorities, women, people with AIDS, the disabled, the elderly, immigrants and refugees, and crime and abuse victims, among others.

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But the benchmark on grant allocations drew the most fire. Paul Brest, president of the William and Flora Hewlett Foundation, called that proposal “breathtakingly arrogant” in a blog entry on the Huffington Post Web site.

“I don’t agree with it at all,” Mr. Brest said in an interview. “Whether you call it arrogant or inappropriate–you could imagine 10 different organizations deciding the most important issue is cancer” instead of marginalized communities, he said.

The California Wellness Foundation canceled its membership with the committee and asked for money to be returned after reviewing the report. {snip}

Many foundations, charities and nonprofit leaders endorsed the report. Among the most prominent was the Atlantic Philanthropies. Many critics are “misreading” the report, said Lori Bezahler, president of the Edward W. Hazen Foundation, another endorser.

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[Editor’s Note: “Criteria for Philanthropy at Its Best” can be read or downlaoded as a PDF file here. It is also possible to download individual sections.

[Paul Brest’s blog is available at here. In particular, his post “NCRP at Its Most Presumptuous” can be read here.]

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