Bill Seeks Demographic Disclosure From Foundations

Foundations in California may be forced to release demographic information about their organizations if a bill, authored by a group based in Berkeley, passes in the state Senate.

The bill, which was proposed by state Assemblymember Joe Coto, D-San Jose, seeks to raise awareness of what he claims is the underfunding of minority-led non-profit organizations by requiring foundations to release information on the diversity of their staff and the staffs of non-profit organizations to which they provide grants.

The bill was passed by the Assembly on Jan. 29.

The legislation requires foundations with assets over $250 million and non-profit organizations receiving foundation grants to release information about the race and gender of their board and staff members.

In addition, foundations will be required to release diversity information on the groups served by the non-profit organizations to which they grant money.

First drafted by the Berkeley-based Greenlining Institute, the legislation was inspired by an institute study that showed that nonprofits led by minorities received only 3.6 percent of the total grant money given out by foundations in California.

Since its introduction in the Assembly in January 2007, foundations have protested the bill, citing it as unnecessary and as an infringement on the privacy of their employees.

"The race of our organization's executive and staff members is immaterial to whether or not our foundation is serving a charitable cause," said Eric Brown, spokesperson for the William and Flora Hewlett Foundation, one of the largest foundations in California.

Greenlining Institute program manager Adam Briones said having public oversight of foundation activities is

important, especially in California, where 57 percent of the population consists of minorities.

"Foundations are the bloodline for nonprofit organizations," he said. "As these foundations become more and more important in our society, taxpayers have a right to know if these foundations are serving all taxpayers."

While California foundations receive over $40 billion in tax exemptions every year, there is very little available data on their operations and almost no regulation of their activities, Briones said.

Hans Hemann, chief of staff for Assemblymember Loni Hancock, said Hancock supports the bill.

"It will bring another level of transparency to foundation activities," he said.

Following the introduction of the bill in the Assembly, some foundations have done studies on the distribution of their grants.

According to these studies, approximately 20 percent of total grants every year go to nonprofit organizations working for underserved communities, said Armando Chavez, a legislative aide to Coto.

Foundation officials argue that collecting the diversity information would require too much effort from small nonprofit organizations.

But according to Chavez, many non-profits and foundations already gather this information for grant applications.

The bill is currently pending consideration in the state Senate, and foundations are seeking ways to halt its progress. Some foundations have already hired lobbyists, Chavez said.

Despite opposition from foundations, proponents say they can already feel the positive impact of the bill.

"We have already achieved part of our goal; more people are becoming aware of the issue, and many foundations are paying more attention to the bill," Chavez said.

Tags: GREENLINING INSTITUTE, STATE ASSEMBLY