October 15, 2010

Diversity Rules for Foundations Stir Debate

Preserving philanthropy's independence is a key theme at this year's meeting of the Philanthropy Roundtable, a Washington group that represents donors.

Adam Meyerson, the organization's president, kicked off the meeting Thursday in Amelia Island, Fla., by praising the passage of legislation in Florida this year that limits what state and local governments can do to regulate foundations and their diversity practices.

While politicians in some states are sending signals that they want to further restrict the work of foundations, Mr. Meyerson said, "Florida has put up a big welcome sign saying, We would like your charitable business."

The Florida legislation bars government officials from requiring foundations to publicly disclose the race, religion, gender, income level, and other characteristics of their board and staff. It also prohibits governments from compelling foundations to award grants based on those characteristics.

The law was prompted by concerns over a bill in California that would have required big grant makers to disclose information about the diversity of their staff, board members, and grantees.

That legislation was withdrawn after a coalition of foundations agreed to develop a plan to help charities that are led by people of minority groups. Greenlining Institute, an advocacy group in Berkeley, Calif. that backed the legislation, had been supporting a Florida group in its efforts to agitate for greater foundation support of minority-led charities, stirring some organizations in Florida to action.

In a conference session devoted to the Florida law and a similar resolution passed this year in Virginia, nonprofit leaders and politicians behind the bills discussed why they think the legislation was important and what donors in other states could do to prevent proposals of the sort introduced in California.

One key message: Your state could be next. Speakers urged donors in the audience to form coalitions and educate politicians about the good work that foundations do before government officials start asking questions.

"It's an issue of fundamental fairness," said J. Robert McClure, president of the James Madison Institute, a think tank in Tallahassee, Fl., that played a key role in passing the legislation.

Saying that the issue is one that ought to be embraced by people of any political persuasion, Mr. McClure advised donors to make the case that philanthropy is the most effective way to support those in need, that it reduces demand for government services, and that people have a right to direct how money they earned will be donated.

He described how his group and others met with lawmakers, formed a coalition of supporters, presented their case to reporters and to the editorial boards of newspapers, and publicized their work on Facebook and other social networks.

Yet all that was done relatively quietly. When the legislation passed, officials at the Greenlining Institute were caught unaware.

But while the Florida legislation attracted very little attention before its passage, it has received quite a bit since. Some of the reactions have been sharply negative.

In an opinion piece in The Chronicle, Emmett D. Carson, president of the Silicon Valley Community Foundation, said the legislation could lead to more government scrutiny of foundations by raising questions about grant makers' commitment to openness and diversity.

A study released Thursday by the Foundation Center, meanwhile, suggests that foundation leaders are divided on the wisdom of both the Florida law and the California legislation.

In a poll of 73 foundation executives, many more said they had a negative opinion of the Florida law than a positive one (42 percent vs. 15 percent). Twenty-six percent said they were neutral, and 16 percent said they were unfamiliar with the legislation.

But the proposed California legislation was also unpopular. Fifty-one percent of respondents disapproved of that proposal, compared with 21 percent who favored it. Twenty percent said they were neutral, and 4 percent said they were unfamiliar with the legislation.

Approximately 400 donors are attending this year's Philanthropy Roundtable meeting, which runs through Saturday.