American philanthropy is the envy of the world…. Yet American generosity is under fire. A growing number of activists and politicians argue that foundations should meet diversity targets in their giving and on their staffs. If foundations fail to diversify “voluntarily,” threaten the race, ethnicity, and gender enforcers, they risk legislation requiring them to do so. In other words, the diversity police … now want to fix philanthropy. And instead of rebuffing this power grab, the leaders in the field have rolled over and played dead.
The idea that foundations should view the world through the trivializing lens of identity politics dates back to the 1980s, when some liberal foundations, including the Ford Foundation, started asking groups seeking grants to report the race and sex of their staff and board members. But today, politicians are getting into the act. This latest diversity push began in 2005, when the Greenlining Institute, a “multiethnic advocacy group” in Berkeley, started pumping out studies claiming that foundations were ignoring “communities of color.” (This despite the fact that in California, 39 percent of large foundations’ grants primarily benefit minorities, according to the Foundation Center, a respected research body.) Greenlining’s definition of helping a community of color: bestowing foundation grants on a nonprofit whose staff and board are at least 50 percent minority. In other words, the Greenlining effort is purely a jobs racket. The racial composition of a nonprofit’s staff and board has exactly zero relation to whether it is actually helping minorities. Agronomists supported by the Rockefeller and Ford Foundations helped wipe out famine in Southeast Asia by developing high-yield cereal crops; pressure to diversify their labs would have hindered their research, not advanced it.
Greenlining went on to claim that big foundations were devoting only about 5 percent of their assets to the “minority-led” nonprofits—the implication being that 5 percent was shockingly low. But no one knows how many nonprofits meet Greenlining’s test of being minority-led. A 5 percent donation rate may actually overrepresent the number of nonprofits with 50-percent-minority boards and staffs.
Nevertheless, Greenlining’s crusade leaped into the political arena. The California Assembly passed a bill in January 2008 that would have required all California foundations with assets of over $250 million to report not just the race and sex of their grantees’ board and staff members, but the race and sex of their own board and staff members as well. Note again the patent shakedown effort. The racial and sexual composition of a foundation is also irrelevant to whether it is helping minorities—except, of course, for those quota hires who end up in cushy foundation jobs. In the late 1920s, Julius Rosenwald, an early president of Sears, Roebuck, used his foundation to build 5,000 schools for rural blacks in the South, somehow managing to do so without a 50-percent-minority board….
The legislation was steaming its way through the California Senate when California’s ten largest foundations promised to pump hundreds of millions of dollars into minority-led nonprofits in exchange for the bill’s withdrawal. But the fuse had been lit. Similar diversity efforts have been spotted in various stages of development in Florida, Illinois, Michigan, New York, New Jersey, Texas, and Pennsylvania. And at the federal level, Xavier Becerra, a congressman from Los Angeles …, has warned foundations: “If you don’t police your own, you’re going to be policed.”
A foundation that remains colorblind in giving and hiring is suspect, even criminal, in other words…. Becerra argues that foundations’ assets, because they are tax-exempt, are virtually public money. Foundations are simply private managers of those public funds, in this view, and should be responsive to political pressure. Until now, Congress has required only that tax-deductible dollars go to educational, charitable, scientific, or religious purposes. Becerra, the Greenlining Institute, and other diversity advocates seek to constrict donors’ discretion in their charitable giving to supporting minority-run (or female- or LGBT-run) organizations or those that purport to serve the poor. But rather than rewriting the tax code to limit the tax deduction to these purposes, they have chosen a politically easier strategy: strong-arming foundations through the diversity-reporting requirements. These public-disclosure mandates put extra-legal pressure on foundations to obey the advocates’ definition of charity. Given how politically correct the philanthropic sector already is, foundations that do not have enough blacks on their boards or in their list of grants will rightly fear stigma. If stigma doesn’t work, Becerra has signaled his willingness to take on the tax code itself….
What has been the foundation sector’s response to this assault on philanthropic freedom? Total collapse. Its spokesmen have embraced the two false premises of the diversity movement: that the skin color and sexual profile of foundation and nonprofit personnel are meaningful performance indicators, and that philanthropic enterprises can be pigeonholed as benefiting this or that particular “diverse” group. Take Steve Gunderson, head of the Council on Foundations, the leading philanthropic lobbying organization. Gunderson’s only disagreement with the diversity agenda is that, in his view, it should be driven from within the sector “voluntarily,” rather than legislated from without….
The Council on Foundations is hardly the only mainstream institution to have ratified the diversity agenda. The Foundation Center is developing a survey instrument designed to test whether a foundation’s “diversity” profile—race, gender, and sexual orientation—predicts “diversity” grant-making. The new, foundation-funded Diversity in Philanthropy Project is spending approximately $2.2 million promoting hiring quotas at foundations, in order to make diversity an “essential consideration in funders’ day-to-day strategic decisions and actions.” …
Excerpted from “Never Enough Beauty, Never Enough Truth,” by Heather MacDonald (City Journal, Winter 2009).
Never Enough Beauty, Never Enough Truth
By Heather MacDonald
The Latest Charity Shakedown
By The Wall Street Journal
November 5, 2008