Compromise Might Greatly Diversify Leadership of California Foundations and Nonprofits

In a compromise announced last Monday, California foundations and legislators agreed to scuttle AB 624, a controversial California bill aimed at disclosing the ethnicity and gender of foundation board members. The compromise preserves the possibility that funders and advocates may cooperate to find better ways philanthropy can serve communities of color, and may also spur similar accords in other states.

Under the compromise, a coalition of 10 leading foundations pledged to:

• make a multi-million-dollar investment in building the capacity of nonprofit organizations serving communities of color and in developing a more diverse pool of foundation and nonprofit leaders;
• report annually on these activities;
• meet periodically with key community leaders to review progress; and “supplement ongoing research with an independent study of the nonprofit sector in California, including the communities it serves, and the number of minority-led, community-based nonprofits and their capacity building needs,” (reportedly, a first version of this study has already been commissioned from and completed by Foundation Center).

The 10 foundation coalition members, seven of which are headquartered in Southern California, include: The Ahmanson Foundation, The California Wellness Foundation, The James Irvine Foundation, The Annenberg Foundation, UniHealth Foundation, The William and Flora Hewlett Foundation, The Ralph M. Parsons Foundation, The David and Lucile Packard Foundation, The California Endowment, and the Weingart Foundation.

All involved – the Greenlining Institute, whose series of studies led to the bill’s introduction, Senator Coto, the bill’s sponsor, and the foundation coalition – deserve praise for this result. With Governor Schwarzenegger likely to veto the bill, each of the parties could have held firm and claimed victory later for standing on principle. Rather than let the perfect be the enemy of the good, they chose to try something workable that, if implemented well, can go a long way toward broadening and deepening diverse leadership in foundations and nonprofits. 

If the ultimate goal of the bill was to increase benefits from philanthropy flowing to either communities of color or low- income communities, then there is still much work to be done. Even if the capacity building called for in the compromise flawlessly succeeds, there will continue to be a need for better data on the reach of philanthropy in communities of color. (A key weakness in the bill is that it did not require the collection of information that would establish who actually is served by grant dollars, as I argued here.) Such data would help funders assess and improve their grant making, as well as enable advocates and public officials to be better informed and targeted in their critiques. 

With a modest investment of time and resources, we can determine which census tracts are served by which organizations, and map the amount of grant dollars relative to the numbers of people living in an area or, more specifically, the particular characteristics of people actually served. This is not a technological pipedream; HealthCity.org, a partnership of nonprofits in Los Angeles sponsored by the Advancement Project, already has built tools and methods for making the flow of grant dollars visible, for several public agencies and private funders, to help them assess their grants in Los Angeles County and throughout California.* Ironically, grants promoting systems change to benefit low- income communities, an increasing trend among many of the foundations involved in the compromise, will be harder to map, but this difficulty can be solved.

A good starting data universe is the grants of the compromise sponsors, perhaps with a few more of the state’s largest funders added. It makes sense to stick with grantees from this pilot set of funders for a couple years or more to evaluate both the usefulness and costs of this approach (the number of new grantee service areas that would need to be geo coded would drop, and the higher initial costs of the system could be smoothed over the period). 

To get beyond the initial set of grants from a small group of leading foundations, we’d need to make the grants data already disclosed by foundations more accessible to advocates, and supplement that with data about the geographic and demographic reach of those grant funds. This likely would mean bringing the grants databases out from behind the firewalls of services like the Foundation Center or Foundation Search, or paying the costs of providing free public access to that data (as I argued in this space previously).

My thoughts are just informed speculation, and there may be better ways to get a handle on which communities actually are served by the grants made by, and leadership developed by, foundations like the compromise sponsors. However, it should be clear that a well-designed system couldn’t very well be mandated in advance through legislation. With this compromise under their belt, advocates for more responsive grant making, like Greenlining and others, and leaders of foundations in California (and elsewhere), have preserved the time and space to explore these possibilities.

*Full disclosure: I am a proud co-founder of HealthyCity.org, and also an employee of Advancement Project.

Peter Manzo is the director of strategic initiatives for the Advancement Project, a civil rights advocacy organization, and a senior research fellow with the Center for Civil Society in the UCLA School of Public Affairs. Previously, he was the executive director and general counsel of the Center for Nonprofit Management. 

Read more stories by Peter Manzo.