Should foundations collect diversity data?

There's a deal being made in Sacramento to get the state's largest foundations to give more support to minority-run non-profit groups. In this Assignment 7 report, we take a look at why this issue has led to a proposed new law.

Non-profit groups provide local communities with important services and opportunities. Most do fundraising to support their programs, while many receive grants from foundations. Grants to non-profits totaled $40 billion nationally in 2006.

However, in a state where minority groups form a majority of the population, critics think funders can do better. They want foundations to start collecting data about their own diversity and the organizations they support.

"We just really want foundations to look at what they're giving, have those numbers so they can analyze and assess how they're going to move to actually serve minority and low-income communities," says Sasha Werblin with the Greenlining Institute.

Sasha Werblin and Adam Briones have been studying foundation grants. They work at Berkeley's Greenlining Institute which thinks major foundations would give more support to minority-run programs by tracking their diversity record.

A bill to require diversity data collection was passed by the State Assembly and was making its way through Senate committees.

Colin Lacon, the president and CEO of Northern California Grantmakers, speaking on behalf of 450 foundations statewide, thought the legislation was unnecessary.

"I really believe that philanthropy really understands that diversity is important and that it is key in regards to both grantmaking and reaching the outcomes which we want to see," says Lacon.

A Greenlining Institute study finds that California's largest foundations are either strong or weak in supporting minority-run programs.

On the strong side is the California Endowment which directed 22.5 percent of its grant money to minority programs in 2004, followed by the California Wellness Foundation at 17 percent and the James Irvine Foundation at almost 12 percent.

By contrast, Oakland's Wayne and Gladys Valley Foundation alotted three percent, Los Angeles-based W.M. Keck Foundation at 1.6 percent and in San Francisco, the Gordon and Betty Moore Foundation at zero percent. Gordon Moore was chairman, CEO and a co-founder of computer chipmaker Intel, a company known for its diversity initiatives.

"Corporations, for example, are much more diverse than foundations, and that's not to say that foundations aren't doing good work. Foundations are still doing wonderful work, but they could be doing better," says Werblin.

The proposed bill would apply only to California foundations with assets of $250 million or greater. Thirty-five grantmakers fall in that category. Their spokesman says this doesn't give credit to smaller foundations that are funding minority programs.

"I do believe that the larger community beyond the 35 really care about these issues and are doing a lot of things within these communities, and I think that that sharing and that discussion -- not including them in the discussion or not including them in sort of the sense of it -- leaves out the broader sense of what to accomplish," says Lacon.

The two sides of this issue believe there is middle ground. They have been talking about a potential compromise.

The bill is due to expire Friday unless it clears two committees this week. Sources at first thought a compromise deal might be announced Monday, but now it looks like it could be Tuesday.

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