The Wall Street Journal-20080204-The Color of Charity

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The Color of Charity

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Just when we thought we'd heard everything from the diversity police, here they come trying to prescribe even the color of charity. The California Assembly last week passed a bill sponsored by state Representative Joe Coto to require foundations with assets of more than $250 million to disclose the race, gender and sexual orientation of their trustees, staff, and even grantees. Look for this to arrive in a legislature near you.

A Berkeley-based advocacy group called the Greenlining Institute hatched this idea because, allegedly, racial minorities aren't well enough represented in California policy debates. John Gamboa, Greenlining's executive director, blames foundations for failing to donate enough money to "minority-led" think tanks and community groups and businesses, and he hopes this legislation will "shame" them into giving more. What counts as a minority-led organization? According to Greenlining, the board and staff should both be more than 50% minority.

This certainly takes the spoils system of racial preferences to a whole new level. Heretofore the government has tried to enforce a pigmentation principle in government jobs and contracts, and in private employment through the threat of lawsuits. But this is about telling private citizens how to give their own money away.

Mr. Gamboa says these philanthropies have tax-exempt status, so the public has a right to this information. "Minorities are paying a little more in taxes but are not receiving their fair share of benefits," he says. This seems an odd claim, since so much private charity is targeted explicitly at minorities. But it makes sense once you understand that what he means is that not enough of this cash is channelled through certain minority-run activist groups, such as, well, his own. It's no accident that such ethnic lobbies as the Black Business Association and the Centro Legal de la Raza also love this idea.

There's also the little problem of accountability and donor intent. Private citizens typically establish foundations with specific charitable goals in mind -- such as wetlands conservation, or medical research, or even promoting free market ideas. If donors are suddenly supposed to allocate grants by the color or sexual lifestyle of the grantee, that donor intent will be distorted at the very least. Presumably we want money for cancer research to support the most promising research ideas, not to be based on whether the labs have a rainbow coalition of Ph.Ds. The goal is to cure cancer.

Paul Brest is a former NAACP attorney and president of the William and Flora Hewlett Foundation, California's largest foundation. And in a letter to the state Assembly on Mr. Coto's proposal, he put it this way: "[Our] fundamental operating principle is to direct our resources to organizations that have the promise of making the greatest difference in achieving [our philanthropic] goals. Thus, we do not focus on the racial composition of our grantees, but rather on how to achieve measurable impact in improving the lives of the communities that our grant recipients serve."

Lest you think this idea is too wacky to go anywhere, it is also expected to pass the California Senate and could soon land on Governor Arnold Schwarzenegger's desk. The Greenlining staff is already lobbying House Ways and Means Chairman Charlie Rangel for Congressional hearings. Foundations and charities that don't want to start apportioning their donations by skin color, or between gays and heterosexuals, had better start describing this idea as the political shakedown it is.