Pressed by legislator, nonprofit foundations agree to invest in minority-led organizations

Original Source By Aurelio Rojas Faced with legislation that would require them to disclose their ethnic composition and detail grants awarded to minority organizations, 10 of California’s largest foundations agreed Monday to a multimillion-dollar, multiyear investment in minority communities. In return, Assemblyman Joe Coto, D-San Jose, dropped a bill that opponents said was an effort to impose racial diversity on charities and threatened to drive donors out of California. Many foundations enjoy tax-exempt status. But according to a 2006 study by the Berkeley-based Greenlining Institute, which sponsored Coto’s legislation, only 3.6 percent of grant dollars from the nation’s top 24 private foundations went to minority-led organizations. “The Greenlining Institute provided us some evidence that the level of investment by these foundations in minority communities was inadequate compared to the level of investment they are making elsewhere,” Coto said. Coto said by asking foundations “to shed some light on their investments,” he hoped “they would then be in a position to make greater investments.” “They saw this as an opportunity to do what we were suggesting and we’ve worked out this agreement that I think will be positive for everyone,” he said. The foundations including the William and Flora Hewlett Foundation, the Ahmanson Foundation and the California Endowment said in a joint statement that nonprofits play a critical role in addressing the challenges facing minority and low-income communities. The foundations reaffirmed their commitment to help minority organizations compete for grants and said they would issue annual reports about their efforts. “By the end of 2008, we plan to announce a comprehensive set of grant-making activities, which we expect to be overall in the multimillion-dollar range and over several years,” according to the statement. The deal was announced at a meeting of the Senate Committee on Business, Professions and Economic Development, which was scheduled to vote on Coto’s Assembly Bill 624. The legislation had already cleared the Assembly and would have required foundations with assets of more than $250 million to disclose the ethnic, racial and gender makeup of their boards and staffs. It also would have required them to make public the number of grants and dollars awarded to minority organizations. In a letter published Monday in The Bee, Richard Atkinson, a member of the Koret Foundation and president emeritus of the University of California, derided the proposed legislation. He called it an “intrusive attempt to redirect the distribution of charitable dollars away from legitimate nonprofits” to others “anointed as more ‘worthy’ by the state.” Coto, chairman of the Latino Caucus, said Monday’s agreement was a win-win for foundations and minorities. “This is a major investment in terms of strengthening the capacity of minority nonprofits up and down the state,” he said. Fred Ali, president and chief executive officer of the Weingart Foundation, one of the signatories to the agreement, told the Senate committee the agreement was unprecedented. “We hope (this) will be a cause of celebration by the nonprofit community, especially in low-income communities of color,” Ali said. Ali said the deal was reached “in a cooperative manner” by the foundations and the leadership of the Legislature’s Latino, African American and Asian/Pacific Islander caucuses. Dr. Robert Ross, executive director of the California Endowment, a leading health care foundation, said the agreement is “a recognition by the foundation community that there’s a serious problem in terms of addressing the needs of low-income and underserved communities.” He said requiring foundations to compile diversity data would not have solved the problem of “capacity building needs in underserved communities and their nonprofit organizations.” “So we wanted to come up with a voluntary approach that actually would pragmatically work to solve the problem,” said Ross, adding the amount of the foundations’ investments is not known “because we need to develop a plan.” Other foundations involved in the agreement include the James Irvine Foundation, the UniHealth Foundation, Ralph M. Parsons Foundation, the California Wellness Foundation, the Annenberg Foundation and the David and Lucile Packard Foundation.