Discussions of Minority Philanthropy Require Many Perspectives

To the Editor:

We would like to extend our appreciation and congratulations for your series of articles on racial and ethnic communities and philanthropy (“A Changing Palette,” January 10). Your balanced representation of all four major American racial and ethnic communities was particularly impressive, as was your coverage of both the giving and the receiving angles of this important story. We would like to add our points to the discussion:

First, in his story, “Tapping Ethnic Wealth,” writer Michael Anft did a great job identifying several issues related to advancing philanthropy within communities of color. However, perhaps one of the greatest impediments to significantly increasing charitable giving in communities of color is that it’s already happening, but not in formal, traceable arrangements.

The recent giving and volunteering study by the Institute for Nonprofit Organization Management at the University of San Francisco that you reference in your article, “Minority Homeowners Give More to Charity Than Whites, Study Finds,” showed that when statistical controls for income, education, and immigration status are applied, differences among major racial and ethnic groups disappear.

By making a special effort to assess the relationship between charitable giving and race and ethnicity, the Institute study showed that, in contrast to findings in Independent Sector’s giving and volunteering studies, there is, in effect, no difference in giving and volunteering levels between whites and nonwhites. If the Institute findings hold true in other parts of the country, perhaps fund raisers would be better off trying to redirect rather than increase contributions by racial and ethnic donors.

Second, regarding the issue of the amount of philanthropy for racial and ethnic communities, we believe it is vital to differentiate between giving to and giving for racial and ethnic communities. Three studies on corporate philanthropy conducted by the National Committee for Responsive Philanthropy showed that corporate giving for people of color (for example, a grant to Harvard University for minority scholarships) always exceeded giving to people of color (for example, a grant to historically black Howard University).

Minority organizations greatly need infrastructure support. Giving to a predominantly white institution for people of color aids those individuals who receive assistance from the white institution. However, to build community infrastructure, racial and ethnic communities require direct support to racial- and ethnic-controlled organizations.

Third, related to the amount of funding, it is important to remember that the Foundation Center grants database includes only grants of $10,000 or more. The aforementioned National Committee for Responsive Philanthropy studies on corporate philanthropy for racial and ethnic communities indicated more than 60 percent of corporate grants for communities of color were in the $1,000 to $10,000 range and were thus overlooked in the Foundation Center’s data.

Some companies give generously to communities of color, but more than 90 percent of their grants are less than $10,000. This is not to excuse the generally outrageous disparity between U.S. population figures for racial and ethnic communities (about 30 percent) and even the most generous estimates of foundation giving for racial and ethnic communities (14 percent to 15 percent in the National Committee for Responsive Philanthropy studies), but rather to provide a more accurate starting point from which real discussions about funding disparities may begin.

Fourth, overall, we remain optimistic about both the philanthropic giving and receiving levels for and in racial and ethnic communities. If current economic conditions are sustained and current income trends continue, the annual consumer buying power in U.S. racial and ethnic communities will triple during the next decade from $1-trillion to nearly $3-trillion.

On the giving side, this will mean that Hispanic, African, Asian Pacific, and Native Americans will have much more disposable income to contribute to the charities of their choice. On the receiving side, due to increased racial and ethnic buying power, corporate officials will look more favorably at racial and ethnic charities.

This isn’t a cynical point of view, just a bow to the reality of the current corporate philanthropy paradigm that states corporate philanthropy must be used to attract, keep, and please the company’s consumer base. Already, several corporations in the telecommunications and banking industry have dramatically shifted their giving patterns to support their growing consumer bases within racial and ethnic communities.

As corporate philanthropy shifts to racial and ethnic charities, it will provide greater exposure for these charities, which in turn may motivate private and community foundations to follow suit.

William Diaz
Director, Program on Public Policy, Philanthropy and the Non-Profit Sector
Hubert H. Humphrey Institute of Public Affairs
University of Minnesota

Steven Paprocki
Director of Corporate Research
The Philanthropy Project
Minneapolis