As California goes, so goes the nation. California is now leading the quest to impose new racial and gender reporting requirements on foundations as well as the charities that receive grants from them and the businesses that work with them. Such legislation will have national consequences as the framework is already being discussed in Washington, D.C. It is therefore critical that the costs associated with such reporting requirements be understood in advance.
Racial and gender reporting requirements will impose serious compliance costs on foundations, charities, and the businesses they work with. These are resources that could be used to support the many good works undertaken and completed by charities — from providing shelter to the homeless, to food for the hungry, to education for the poor, to assistance for those in difficult circumstances, to support for the elderly. The benefits of such requirements will in no way come close to offsetting these serious and disconcerting costs.