Imagine if the Bush administration proposed that the Internal Revenue Code be amended to require that nonprofit foundations disclose the makeup -- including gender, race, ethnicity and sexual orientation -- of their boards of directors, their trustees, their employees and of all the organizations that receive grants.
The criticism would be swift and unambiguous: This is absurdly intrusive and a violation of privacy. Foundations would organize to oppose any such legislation. The ACLU would not be far behind.
Yet in California, an equally intrusive measure, AB 624, sailed through the Assembly on Tuesday with barely a whisper of protest. The bill, introduced by Assemblyman Joe Coto (D-San Jose) at the behest of the Greenlining Institute, aims to remedy what the institute describes as the lack of diversity in the world of foundations.
Here’s what our elected officials just approved on a party-line, 45-29 vote. Every private, corporate or public operating foundation in California with assets of more than $250 million (of which there are more than three dozen) would be required to gather information about the gender, race, ethnicity and sexual orientation of its members and its board of directors and then publish that data on its website and in its annual report. Foundations also would be required to publish such “diversity data” percentages about its staff.
Imagine being the employee who has to ask each co-worker about his or her sexual identity and history. Many of these foundations have relatively small staffs; there won’t be many secrets if this bill becomes law.
But the bill’s shameless intrusiveness doesn’t stop there. The race, ethnicity and sexual orientation of the owners of all businesses with whom the foundation contracts is the next bit of data that the bill requires. Is the printer of foundation reports an Alaskan Native? The event caterer an Asian American? The landlord bisexual or transgendered? Those need to be tallied. The state wants to know the percentage of business contracts in those categories and more.
After that, foundations would have to drill down into the composition of the organizations to which it makes grants. How many grants went to groups with a board or staff that is 50% or more minorities? What percentage of foundation dollars did they get? That too would be reported to the world by the foundation.
One of the few voices to speak up against the legislation was the Nonprofit and Unincorporated Organizations Committee of the State Bar of California. The committee concluded that AB 624 would be an administrative burden, wouldn’t improve governance of foundations and could in fact adversely affect the ability of worthy nonprofits to receive grants. “It is intrusive at many levels, both internal and external to foundations,” the committee wrote. And that was before sexual orientation was added to the long diversity checklist.
This legislation stems from benign motives -- to increase funding that affects the least advantaged of Californians. But it is wrong on at least three counts.
First, the minority or sexual orientation makeup of a nonprofit’s board, staff or beneficiaries should in no way be the measure of whether a nonprofit does a good job. As the recent, tragic story of Martin Luther King Jr.-Harbor Hospital made clear to Angelenos, the minority status of decision-makers and staff guarantees very little in terms of outcomes.
Second, the universe of the underserved is not defined by race, ethnicity or sexual orientation. The poor and disadvantaged come in all sizes, shapes, colors and sexual orientation. Focusing on selected groups looks more like special pleading and identity politics than true concern for the disadvantaged.
Finally, the state should not be subtly directing where foundations spend their charitable dollars. Just as private individuals don’t want the government looking over their shoulders when they write charitable checks (so long as the recipients are tax exempt and legal), foundations should not have their discretion impinged upon by someone else’s notions of what is appropriate.
Those concerned about privacy rights, fairness and freedom from unwarranted government intrusion should find AB 624 objectionable on countless scores. It’s now up to the state Senate to stop this offensive legislation, recognizing that it would be pilloried were its authors in Washington rather than in Sacramento.