The Magazine

No Good Deed...

A bad bill makes its way through the California legislature.

Feb 25, 2008, Vol. 13, No. 23 • By MATTHEW CONTINETTI
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What counts as a "minority-led" group? "A minority-led organization," the authors of "Fairness in Philanthropy" write, "is one whose staff is 50 percent or more minority; whose board of directors is 50 percent or more minority; and whose mission statement and charitable programs aim to predominantly serve and empower minority communities or populations." How many grantees fit these criteria the report's authors do not say.

And they probably can't say, because if they did they would reveal that the fix was in from the start. The United States is a multiracial, multiethnic country, but the combined numbers of "blacks," "Hispanics," and "Asians" equal only about a third of the total population. The "50 percent or more minority" number is therefore entirely un-representative. Also, it's ridiculously high. You could have a foundation whose chairman was a minority, or whose board and staff were both 49.99 percent minorities, and it still wouldn't qualify as a "minority-led organization" in the Greenlining Institute's view. Assemblyman Coto's bill is based on seriously flawed research.

It's also largely unnecessary. One thing the Greenlining study does prove is that a lot of information about the demographic composition of foundations and grantees is out in the open already. "To determine if the grantee met Greenlining's definition of minority-led," write the authors of "Fairness in Philanthropy," "researchers conducted web-based and media searches to collect demographic data on staff members, boards of directors, charitable programs, and organizational missions of listed grantees." In other words they spent a lot of time trolling the web checking out the color of people's skin. And they did so at a time when those organizations were not required by California state law to disclose such information on an annual basis. It is true that they occasionally ran into trouble: "If an organization did not have a website," the report states, "researchers called the organization to gather information about the ethnic makeup of board and staff members."

Now, "in some cases, this information was not available," the authors of "Fairness in Philanthropy" disclose--in those cases, it should be noted, where foundations and their grantees didn't find any particular reason to share their demographic makeup with others. So AB 624 properly should be understood as an attempt to make easier the work of outfits like the Greenlining Institute.

And that is yet another reason to oppose the bill. No one should want to make the lives of racial mau-mauers any easier. What AB 624 won't make any easier is charitable giving in California. The Washington, D.C.-based Philanthropy Roundtable, along with former Stanford law dean and NAACP lawyer Paul Brest, oppose the bill on the grounds that it will actually drive foundations out of the Golden State, as donors who do not want to expose grantees to the onerous reporting burden spend their money elsewhere. And how will California's minorities--and Californians generally--be served by that?

The logical response to donor flight is, of course, to nationalize disclosure requirements. Indeed, the Greenlining Institute aims to do exactly that; we hear the next targets likely will be New York and Illinois, and that Democrats on the House Ways and Means Committee are interested. If AB 624 becomes law, then, California once again will be the place where America's political future happens. Except that such a future--where an entire sector of the economy is brought under the purview of diversity bean-counters--is a place where we don't want to live. If it reaches his desk, Governor Schwarzenegger should veto this bill.

--Matthew Continetti, for the Editors