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Diversity vs. Philanthropic Freedom?

June 25, 2010

(Bradford Smith is president of the Foundation Center. In his last post, he argued that it's time for philanthropy to move beyond the "infrastructure debate.")

1diversity_200411 I'm not buying. The Florida legislature passes AB 998 to prohibit state and local government agencies from requiring foundations to disclose information about the "special characteristics" of their board, staff, or the organizations they support. Emmett Carson fires back in the Chronicle of Philanthropy, blogger Rosetta Thurman joins the fray, and the Alliance for Charitable Reform claims a victory for philanthropic freedom. So where do those of us who care about philanthropic freedom and diversity fit in an increasingly polarized debate that tries to impose a false choice between the two?

Let's start with philanthropic freedom. Philanthropy is the use of private wealth to serve the public good. No one forces the wealthy to use their money in this fashion; they do so primarily out of a sense of moral obligation, indignation, compassion, or charity. Government provides incentives for them to do so in the form of tax exemptions, but the overriding impulse is voluntary. The private and voluntary nature of philanthropy is the wellspring of its independence and, in principle, its innovation and ability to take risks.

Because philanthropy is supposed to serve the public good does not mean, as is sometimes argued, that its resources are public. Anyone working in a foundation has experienced the shock of trying to leverage government funds for a pet program strategy only to have civil servants turn around and request a grant. Public funds are immersed in a web of accountability, oversight, and bureaucracy that are essential to functioning democracies but tend to stifle agility, creativity, and innovation. Philanthropic dollars, though far more scarce, are valued precisely because their private nature makes them so flexible. For foundations and lawmakers, striking exactly the right balance between enough regulation to guard against fraud and abuse without stifling flexibility and innovation is the perpetual challenge.

What about diversity? America is becoming more diverse by the day and a trip to the shopping mall, visiting a corporate headquarters, or simply channel surfing will drive home the point. For those who require hard evidence, just wait until the 2010 census results come in. The armed forces and the private sector long ago embraced diversity because they saw it as both inevitable and strategic. Many foundations, especially those whose values lead them to work predominately with the poor and disenfranchised, already see diversity -- both internal and external -- as an asset if not a precondition for their work. And their ranks will continue to grow, largely because serving the public good in an increasingly diverse nation (and world) will demand it.

The Foundation Center does not take stands on policy matters regarding the operation of foundations. But as a knowledge resource for the field, we believe that more information is better than less, and that greater transparency is the best defense of philanthropic freedom. We provided data to the National Committee for Responsive Philanthropy, which concluded that one-third of all grant dollars benefit "marginalized populations," as well as to the Philanthropic Collaborative, which found that two-thirds of all grant dollars for health go to "underserved populations." This kind of research highlights the need for better data, and the open debate it provokes can only help philanthropy fulfill its promise.

In creating Glasspockets, a portal devoted to transparency in philanthropy, the Foundation Center noticed the growing number of foundations voluntarily posting diversity policies on their Web sites. Some, like the Packard and Kellogg foundations, choose to go further and openly communicate the diversity profile of their staff and boards. These examples inspired us to develop a diversity policy as well and post the Foundation Center's diversity profile on our own Web site. Frankly, it didn't look all that great at first, but it is slowly changing and more than one job candidate has told me how seeing that kind of information online made them want to work at the Foundation Center.

With the movement of money, people, and ideas that globalization brings, the world is growing more diverse before our eyes. But it is also a world in which there is too much poverty, violence, and pollution and not enough justice, beauty, and opportunity. Philanthropy, with its freedom to innovate, must strive to change that. So when it comes to diversity vs. philanthropic freedom, I'm not buying. We've got too much work to do.

-- Brad Smith

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Posted by Mazarine  |   June 27, 2010 at 10:32 PM


What you're saying is that diverse populations, such as Latinos, African-Americans, Native Americans, etc. are "underserved" or "marginalized."

Appreciate your effort, Brad, but first you need to clarify what diversity means TO YOU, and then to other foundations. It can mean different things to different groups, depending on where they are in terms of their awareness of the different types of oppression. Some people might think that diversity JUST means hiring or helping certain racial and ethnic groups. But it also means sexual and gender minorities, differently abled minorities, class minorities, etc.

Your argument would be stronger if you showed you understood the need to address these different groups, and if you disclosed numbers of foundations specifically supporting different racial and ethnic groups, working class people, sexual or gender minorities, and people who are differently abled. If you could break out with specificity who serves on boards, on staff, as volunteers at the foundation center as well as at other major foundations, it would also give more weight to your article.

It's not enough to say a population is "underserved." This is grant-jargon double-talk and means nothing.



Posted by Tim  |   July 02, 2010 at 04:34 PM

I have been hearing a lot of reflectivity and diversity buzz lately and I have yet to see evidence that reflectivity or diversity at the foundation, national or local non profit board, or program level actually results in improved social impact and outcomes in the inner city.

In fact, what seems to be happening is that a new kind of quota activism and stigmatization of governance practices is taking place. Well educated and experienced professionals tripping over themselves to express notions of race and social justice in safe neutral terms. Seeking revenge not justice with terms that keep changing. Reflectivity and diversity in non profits seems to be assuming a kind of white guilt based reparations form, rather than rationale policy form.

On the ground I hear managers talking about means testing, special hiring grants, and enriched salary offers for minority candidates that are not better qualified than their non-minority or extra-protected class peers. It seems that discussing the merits of diversity and reflectivity is a sacred cow. And those that want to explore the rationale behind it are smeered and slaughtered. A certain irrational activism is afoot, we need to name it and stop the cycle of revenge and payback social policy.

When I go into the inner city and ask local community leaders; can a white youth worker serve your community as effectively as a black, latino or other youth worker? I more often than not hear, "yes but we would really like to find people of the community to serve the community." When I ask; can an outsider effectively create cohesive community and social capital value within your neighborhood? I more often than not hear, "yes but we would really like to help our community ourselves, control our own destinies."

So much of this feedback is about preferences, turf, and crowbarring for authority and control; not about maximizing social good or outcomes. It is, unfortunately an outdated welfare mentality in a new skin. Now it's we need set asides as social policy in foundations to achieve social equality. I would posit that what "we" need are more foundations started by people who advance these values.

We need to be vigilant against insidiously subtle takings of private property by the public sector or in the name of social justice. A foundation's reputation is one form of intangible property that will be subjected to shaming and smeering and all manner of stigmatization until what some groups think about "doing the rigth thing" is accomplished. Privacy is also a kind of property.

Foundations are not public institutions and ought not to be compelled to demonstrate their diversity or reflectivity. Especially when the foundations for these mandates remain on liquified intellectual strata. Bound up in revenge politics, failed quota public policy, and divorced from research on impact and outcomes.

Posted by DJ  |   July 06, 2010 at 04:48 PM

Mazarine - while well meaning - demonstrates the troubles with this issue. However "diverse" a foundation can be in it's leadership and focus/practices, there's always going to be some group somewhere that - while deserving - decries being left out.

Government should not demand foundations disclose any of that type of information, because the very next steps are government demands that compel foundations to meet certain arbitrary and changeable standards. Don't think it wouldn't happen given a chance. And it is at that point that foundations end, and individuals either keep their money, or choose other vehicles to give.

As part of a best practices standard, foundations SHOULD release that info on a voluntary basis, and would be smart to do. If the data reveals a truly underserved group, someone will move to fill the gap

Posted by Marc Brenman  |   July 18, 2010 at 08:48 AM

There seems to be some misunderstanding here. Foundations receive a very significant benefit from the government in the form of tax exemption. In return, they're supposed to accomplish a significant social benefit and do no harm. One of the harms they are not supposed to do is discrimination. The IRS code is clear that tax exempt organizations are not supposed to discriminate against people protected by federal civil rights laws. There are exemptions granted, for example, for positions in which certain religious qualifications are needed. To ascertain whether discrimination is or is not occurring, it is logical that some racial/ethnic and other data would be required to be reported. It is also a reasonable expectation that foundations not be hypocritical. That is to say, their internal policies and practices should reflect their intentionality. To a certain extent, their management should reflect their client base. Third, foundations should seek, obtain, listen to, and act on input from their clients. Fourth, the wise foundation is aware of and adjusts to the changing world around it. That world is becoming more diverse. If foundation management doesn't also become more diverse, it becomes increasingly isolated from the world around it.

Posted by DJ  |   July 19, 2010 at 12:41 PM

To ascertain whether discrimination is or is not occurring, it is logical that some racial/ethnic and other data would be required to be reported

>>> Sort of has a "guilty until proven innocent vibe", doesn't it?

Suppose the information you seek is released - if the board of a foundation is deemed to be insufficiently "diverse", does that automatically prove discrimination? Is it evidence of hypocracy? And what remedies and penalties do you force on the guilty party?

I'm all for foundations disclosing this info voluntarily but until some of these questions can be answered, it needs to stay that way.

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