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California Legislation Requiring Foundations to Report on Diversity, Part 1

February 27, 2008

PhilanTopic contributor Michael Seltzer has been a member of the Association of Black Foundation Executives, Asian Americans/Pacific Islanders in Philanthropy, the Disability Funders Network, Hispanics in Philanthropy, the National Network of Grantmakers, and Women and Philanthropy. In addition, he was a founder of what is now Funders for Lesbian and Gay Issues.

In February 2007, at the urging of the Greenlining Institute, a public policy organization based in Berkeley, Assemblyman Joe Coto of San Jose introduced legislation (AB 624) to require private foundations with assets over $250 million to annually collect and publicly disclose the race, gender, and ethnicity of their board members, staff, and grant recipients. AB 624 also requires private foundations to report the amount and percentage of grants to organizations where 50 percent or more of the board and staff belong to an ethnic or racial minority.

Subsequently, California Assembly Bill 624 was amended to require that foundations include the number of grants and percentage of grant dollars "awarded to predominantly low-income communities." (The legislation does not define "predominately low-income" or explain how it should be measured.) Foundations also would have to report the number of grants and percentage of grant dollars awarded to organizations serving lesbian, gay, bisexual, or transgender (LGBT) individuals, as well as organizations where at least 50 percent of the board and 50 percent of the staff is comprised of LGBT individuals.

On January 29, 2008, almost a year after the bill’s introduction, the California State Assembly passed, by a vote of 45 to 29, an amended version of the bill. The amended bill has been jointly referred to the Judiciary Committee and the Business, Professions and Economic Development Committee in the California State Senate. There is no set timeline, however, for the Senate to take up the legislation.

Ironically, "diversity" legislation in California has surfaced at a time when interest in equity and diversity issues among private foundations is growing. In recognition of that fact, the Council on Foundations convened an historic multi-session professional institute on the topic at it annual meeting in Seattle in 2007, and it recently hired Renee Branch to be its first full-time director of diversity and inclusive practices. Elsewhere, the Diversity in Philanthropy Project now counts more than twenty-five leaders in the field on its national advisory committee. (Disclaimer: I have served on the committee as a founding member.) Growing interest in the issue even led to a special report in the Chronicle of Philanthropy ("Achieving Diversity at Nonprofit Organizations," October 18, 2007) spotlighting the efforts of nonprofits and foundations to diversify their staffs.

Time will tell whether all this activity has truly had an effect on hiring and trustee selection decisions at foundations. There is absolutely no evidence to suggest, however, that a new reporting requirement for a handful of large California foundations will improve the situation.

Yes, we have to continue to strive to make the field of organized philanthropy more representative of our increasingly diverse nation. And yes, it is more important than ever that we fund initiatives that address the legacy of injustice that has prevented so many individuals from participating fully and equally in the life of our country.

This work is too important, however, to leave to prescriptive government intervention. We can do better when it comes to diversity -- and we will. But government reporting requirements are not the way to get there.

-- Michael Seltzer

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