Silicon Valley/San Jose Business Journal, February 8, 2008

In January, the Assembly Judicial Committee held a hearing on AB 624, a measure billed as an aid to philanthropy. It's actually a hindrance.

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 and gender composition of the foundation's staff.

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 Web site 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, this costly and burdensome measure demands multiple layers of record keeping. The administrative burden on grant recipients is at least as much as that of the foundation.

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. Legislation should reflect reality.

Private foundations have established their own diversity policy, without any intrusive legislation. They give away private money earned in the private sector. In short, they are doing a fine job and a spendthrift state with a $14 billion budget deficit should leave them alone.

K. Lloyd Billingsley is editoral director of the San Francisco-based Pacific Research Institute.