Thursday, May 8, 2008

The Foundation Earmark

"You get a $32 billion earmark. You're under the microscope so do well."
Congressman Xavier Becerra, May 7, 2008

This statement echoed during and after the first-ever plenary session on diversity at the 2008 Council of Foundation's meeting -- Diversity: Leadership or Legislation. The session didn't resolve issues, but conveyed through conversation the key elements of the debate. This plenary was a part of COF's larger strategy to promote more diversity in philanthropy.

Lots of foundation diversity efforts are underway, but it was clear that pending California legislation that would require foundations to report on diversity related to staff, board, and grantees has riveted foundation attention. And, frankly, the diversity in philanthopy numbers for CEOs and board members has not changed much, and remains whiter than the overall white proportion of our population. That shouldn't be any surprise given the wealth gap as described in The Color of Wealth.

So,the conversation and discussion ranged from what is diversity and how inclusive is inclusive (e.g. disabilities, sexual preference, class, geography, point of view) to how does more diversity actually translate into better grantmaking? All the foundations embraced more diversity -- but several stipulated that it had to be voluntary. One panelist even invoked Mother Teresa as an example that whites can do good without mandates.

Back to the "earmark" language. Those were fighting words. Earmark refers to the tax benefits foundations enjoy because of federal tax exempt status -- and the public responsibilities that come with tax exempt status to fulfill charitable purposes.

Is "earmark" the right analogy -- wreaking as it does of back room deals, lobbyists, add ons, budget deficits? Not really, but it's a great analogy to start an argument. Corporate welfare or the tax incentives for homeownership might have been more appropriate analogies.

In the final minutes of the session truth broke out and some panelists talked about the real problem behind the legislation being the persistence of poverty and growing economic insecurity and inequality. Frankly, neither Congress nor philanthropy has taken this on these issues in a significant way.

But let's face it, sometimes legislation is needed. Think of the Community Reinvestment Act or Community Benefits Agreements. What makes these different, however, is that they are about how resources are spent.

What is the responsibility of any wealth, but especially white-generated wealth, to embrace diversity in how it does good?


Colin Austin said...

The percent of philanthropy that focuses on poverty alleviation and inequality is really quite small. Appeals to diversity may help, but who controls the wealth is the bigger question. If you want to see who is getting the tax breaks, just do like I do and visit your local symphony.

Bob Giloth said...

One of the discussion points at this meeting was how you make this point without scaring off new wealth -- the trillions of dollars potentially coming into philanthropy over the next several decades -- much of which is family foundations.