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A dangerous and precedent-setting intrusion

By David A. Lehrer and Joe R. Hicks

June 12, 2008 | 2:32 pm

The next few weeks will be the moment of truth for Assembly Bill 624, the so-called, "Foundation Diversity and Transparency Act," as it comes before the state Senate Business, Professions and Economic Development Committee chaired by State Sen. Mark Ridley-Thomas (D-Los Angeles).

The bill is an unprecedented intrusion by government into the realm of charitable giving. While purporting to promote "transparency" in terms of who is giving to whom, in fact it is the first step in setting government-mandated priorities as to where charitable dollars should go.

The Greenlining Institute, a decidedly left-of-center Berkeley-based nonprofit organization whose mission is to "empower communities of color," are the drafters of this bill. Greenlining claims only to want to track where large foundations' dollars go. It has rarely discussed what the real motivation behind AB 624 is -- to ultimately direct where charitable dollars go. In a televised discussion of the bill last year, Greenlining Institute's associate director, Orson Aguilar, made a telling admission:

"We think that foundations have a lot of power in society today. So what we want is to make sure that foundation dollars are reaching our communities so that's basically what we're asking for ... equal dollar amounts."

As the first step in that effort, Greenlining's bill mandates that the race, ethnicity and gender of large foundations' staff and board members must be made public, as well as the race, ethnicity and sexual orientation of the board and staff of grantee organizations and of every business contact that the foundations have. (AB 624 passed the state Assembly in January; that iteration of the bill required that foundations survey everyone on their boards and staffs to determine their sexual orientation -- i.e. lesbian, gay, transgender or bisexual -- and make that public, too.)

If the Bush administration had proposed such a line of inquiry, it would have been rightly castigated as inappropriate government snooping.

This is bad policy, and it will ultimately drive our largest foundations to set up shop outside of California. Many of these foundations are resistant to demanding of their staff, grantees and business contacts the kind of intrusive, private information that bill requires.

The bill has other serious legal and policy deficiencies, beyond what it portends in terms of future government policies.

The Nonprofit and Unincorporated Organizations Committee of the State Bar of California has weighed in twice on this legislation. In its most recent opinion, it concluded that the bill is unconstitutional, burdensome on foundations, poorly drafted and invasive of privacy. There is no equivocation in its analysis; the bill has fatal flaws.

What's disturbing is that the bill is totally unneeded. Despite the bill's implications, the universe of the underserved is not defined by race, ethnicity, disability or sexual orientation. The poor and disadvantaged come in all sizes, shapes, colors and sexual orientations, and most large foundations take their charitable giving seriously.

The bill, by identifying certain groups as the ones that need to be reported on, sends a message that the designated groups are the ones that matter and government is watching. As the Greenlining Institute has baldly said, foundations need "to be held accountable for their giving."

Greenlining doesn't simply favor certain segments of society; it manifests open contempt for those causes it doesn't favor. Its executive director, John Gamboa, has derisively dismissed contributions to "elite universities and the opera" as "pet causes."

AB 624's reporting requirements amount to crass identity politics -- harming those who aren't among the select and, ultimately, benefiting those who are.

Interestingly, the statistical "data" proffered by the Greenlining Institute over the past year to justify the need for their bill, alleges that just 3 percent (or more recently the claim is 3.6 percent) of foundation giving went to minority-led organizations in California, and that only 10 percent went to benefit low-income communities.

Although few eyebrows have been raised as Greenlining repeated its claims again and again, Greenlining's data -- the rationale on which its legislation is predicated -- is as fatally flawed as the bill. An independent study of its research by George Mason University's Statistical Assessment Service concluded that the Greenlining's research "contains several analytical problems, involving sampling strategies, data collection, operational definition, and data analysis. As it is, the foundation community seem 'set up to fail' by the comparisons used in the report." After that critique, there isn't much left for Greenlining, or its supporters, to hang their hat on.

Nevertheless, despite its manifest flaws and being based on erroneous and skewed research, Assembly Bill 624 sailed through the state Assembly in a virtual party-line vote in January of this year -- every Democrat voted for it, every Republican, save one, opposed it. The fear of being "politically incorrect" apparently trumped common sense.

Students at UC Berkeley, hardly a bastion of conservative or libertarian thought, editorialized on AB 624, in the campus newspaper, The Daily Californian, and got it right, "AB 624, however, is less an effective treatment for pervasive inequality than a horrendous intrusion by the state into the affairs of private institutions."

Hopefully, our legislators will think twice before reflexively voting for a measure that will do far more harm than good.

David A. Lehrer is president and Joe R. Hicks vice president of Community Advocates Inc. (www.cai-la.org), a Los Angeles-based human relations organization headed by former mayor Richard J. Riordan.

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