Big Brother Targets Foundations and Nonprofits

Big Brother Targets Foundations and Nonprofits

SACRAMENTO – Last Tuesday, the Assembly Judicial Committee held a hearing on AB 624, a measure billed as an aid to philanthropy. It’s actually a hindrance to philanthropy and is troublesome in many ways.

The bill, introduced by Assemblyman Joe Coto, a San Jose Democrat, wants all private foundations in California with assets of more than $250 million to collect and publicize data on the racial composition of its board of directors, including the percentage that are African-American, Asian-American, Pacific Islander, Caucasian, Latino, Native American, and Alaskan Native. The bill mandates reporting on the board’s gender composition and also wants to know the racial composition of the foundation’s staff, along with the male-female breakdown.

AB 624 wants the percentage of business contracts awarded to businesses owned by African-Americans, Asian-Americans, Pacific Islanders, Caucasians, Latinos, Native Americans, and Alaskan Natives and the number of grants awarded to organizations serving the same groups. It also seeks the percentage of grant dollars awarded to organizations serving those groups and the number of grants awarded to organizations where 50 percent or more of the board members are ethnic minorities. Not to be left out are the number of grants awarded to organizations where 50 percent or more of the staff are ethnic minorities. All this is to be displayed on the foundation’s website and included in a “diversity” section of the annual report.

As the Business Affairs section of the California State Bar, Nonprofit and Unincorporated Organizations Committee, pointed out last April, this costly and burdensome measure demands multiple layers of record keeping, requiring the foundation to collect ethnic data on every person with whom it interacts. The administrative burden on grant recipients, the committee noted, is at least as much as that of the foundation. They would have to prove the diversity requirements. In cases where foundations support clinics, hospitals, and soup kitchens, gathering the data would not only be difficult but could violate individuals’ right to privacy.

AB 624 targets private foundations with the racial and gender gerrymandering that California voters rejected for state employment, education, and contracting in 1996 when they passed Proposition 209, the first time voters had any say in such matters. AB 624 proceeds from the politically correct orthodoxy that all institutions, including private foundations, must reflect the ethnic breakdown of society, and if they don’t, the cause can only be discrimination and the only solution must be government action. That doesn’t follow, any more than various branches of the U.S. Postal Service or the WNBA could be charged with discrimination on a similar basis.

This orthodoxy is not science, not part of the U.S. or California constitution, and has nothing to do with justice. It violates common sense by ignoring such key factors as personal differences, effort, and choice. Statistical disparities are the rule, not the exception in California life, and should not require any foundation or recipient to prove anything, let alone their innocence from an imaginary problem. California courts do not presume guilt on the basis of ethnicity or “minority” status, which is also a problem.

In California, strictly speaking, minority means everybody. As the 2000 U.S. Census revealed, there is no longer any ethnic majority in the Golden State, a reality recognized even by then-Lt. Gov. Cruz Bustamante, a liberal Democrat who suggested we should all just call ourselves Californians. Legislation should reflect reality and respect existing state law.

Private foundations have established their own diversity policy, without any intrusive legislation. Free and voluntary action, unfortunately, is not enough for backers of AB 624, which threatens philanthropic independence. Legislators should reject this racial Stasi regime and if it passes, Governor Schwarzenegger should respond with a veto. That would set an example for the rest of the nation.

Private foundations give away private money earned in the private sector. California’s foundations are doing a fine job and a spendthrift state with a $14-billion budget deficit should leave them alone. What needs more scrutiny is California government.

It recently emerged that state tax collectors owe some $40 million to small businesses across California, and that the state seizes and retains money from private accounts, including those of some legislators. Californians could also use a regular report on whether California government is becoming more or less intrusive. AB 624 would make it a lot more so.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.