How Foundations Can Do the Most to Advance the Needs of Minorities

At this time last year, the foundation world was swept up in a healthy and heated debate about diversity following the proposal of a new California law that would have required large private foundations to report race and ethnicity data about all grantees.

The California Endowment joined a coalition of 10 California foundations that opposed this legislation and faced tough questions about that position.

Given the endowments longstanding commitment to diversity, it was especially painful to be subjected to public critiques about how our grant-making practices were perceived to have locked out minority-led organizations. As one of the few African Americans to head a large American foundation, Im acutely aware of the many forms of social injustice that still exist and our responsibility to try to end those inequalities.

The question is, how?

I continue to believe that the answer doesnt necessarily lie in adding check boxes for race and ethnicity to our grant applications. Rather, solutions can be found in honest assessments of how we can do better when it comes to diversity and, most of all, in doing right by vulnerable people through grant making that solves problems and delivers results.

Although the controversial new law was not enacted, it did lead to important soul searching at the nations foundations. What did we learn? And what are we doing differently as a result?

First and foremost, we learned that we still had more work to do to get our own house in order. The California Endowment has always had a commitment to diversity as part of our mission to improve the health of needy people and as part of operating in California, the most diverse state in the United States. I am proud that in every report about how foundations perform in terms of the diversity of their boards and staffs and, most important, the diversity of their missions and leadership of the organizations they support, we do better than average and often are at the top of the rankings.

However, when the proposed law (Assembly Bill 624) was being debated, our Board of Directors correctly decided that we needed to refresh the foundations diversity policyand that we needed to explicitly adopt a comprehensive diversity plan for the first time to examine all aspects of our grant making and operations.

That meant we needed to catch up with some best practices pioneered by our sister foundations on data collection, contracting, and mission-related investments. We commissioned and have widely disseminated a tool kit to document those best practices so that other foundations can learn from and adopt these diversity policies. Additionally, we commissioned an independent audit of our progress in carrying out the diversity plan and are now working through the audit findings and recommendations for how to further improve our practices.

Second, AB 624 catalyzed the formation of a new coalition of California foundations that agreed that philanthropy should and could do more to ensure equitable access and to strengthen the capacity of minority-led, community-based organizations throughout the state. We also agreed that we opposed AB 624 as an unnecessary legislative mandate. We were opposed to the definitional debates and divisiveness the legislation would create, applying a rigid legislative solution to a broad array of grant makers and nonprofit groups with a wide range of missions. We also felt this approach would result in a meaningless focus on numbers rather than on the longer-term and more important goal of adoption of diversity and inclusion as essential elements of philanthropic effectiveness.

In The Art of War, Sun Tzu counsels that sometimes better than winning a battle is avoiding it altogether. e.

Legislative mandates to diversify grant making may constitute terrible policy and ultimately may be defeated. However, expending the effort to vigorously lobby against and defeat such legislation comes with a cost: Even if philanthropy defeats such legislation, waging the battle leaves organized philanthropy with a proverbial black eye. It strengthens the perception that philanthropy just doesnt give a damn about the plight of people who are poor or are members of minority groups. So if we lose the legislative battle, we lose. And if we heavily lobby to win the legislative battle, we still loseat least in the eyes and minds of legislators and community leaders fighting injustice, poverty, community violence, and lack of opportunity.

The battle in the court of public opinion has yet to be decided, but the coalition of California foundations has begun to more regularly share ideas and practices to build the capacity of minority-led nonprofit groups and taken action to put good ideas in place. Some of us are supporting leadership programs, some are financing custom-designed efforts to build management and leadership at minority-led groups, and others have explicitly made grants to such minority-led organizations a higher priority. Our foundation coalition has committed to spend $30-million over three years to build and strengthen grass-roots groups led by minorities,

Meanwhile, at the national level, organizations such as the Council on Foundations, the Foundation Center, and other groups of grant makers have worked to focus on diversity.

One of these efforts, called the Diversity in Philanthropy Project, involves three dozen foundation executives and trustees from across the country. The group, which I chair, developed a statement on diversity and inclusion principles and practices that has been adopted or endorsed by 36 organizations and executives of 17 foundations. Together, we are raising the visibility and importance of voluntary leadership practices to strengthen diversity and inclusiveness along the lines of race, ethnicity, gender, sexual orientation, and disability. Those actions will most certainly enhance our effectiveness and impact.

Lastly, the AB 624 debate was all about the numbers, but not the most important ones. It is unfortunate that the dominant story line on diversity and inclusion in philanthropy in the past year has been framed by required number-counting and a fair share approach to distributing money. For disinvested, marginalized, low-income people who must contend with lousy schools, inaccessible health care, and limited economic opportunity, it is fundamentally clear to us that sustainable and meaningful problem solving is what counts the most.

We believe that the best solutions are most likely to come from leaders and organizations that are closest to community problems and can devise approaches that are tailored and culturally relevant. However, these community leaders and their organizations must have more money and other resources so they can focus on problem solving. This is the driving reason why minority-led grassroots organizations need increased access to both grants and management advice.

Beyond the matter of grant making, it is equally important that the broad range of people and groups that disproportionately suffer from social, health, and economic inequity are, to the greatest extent possible, represented on foundation boards, in management, and on staffs. While this philosophical approach does not guarantee that foundation strategies and programs will succeed, we believe it helps buffer our organization against philanthropic arrogance and irrelevance to the very people who are supposed to benefit from our grant making.

The issues of diversity and inclusion are of critical importance because of their strategic value and effectiveness. For our foundation, diversity is not a matter of blind allegiance to political correctness or a numbers game. Rather, it is about the important role that diversity plays in effectively carrying out our mission, producing results, advancing opportunity, and solving civic challenges.

Looking forward, it is important that leaders in philanthropy continue to debate and communicate the role that greater diversity and inclusion play in making the work of foundations more effectiveand in helping our communities and society move closer to opportunity and equity for all.

Robert K. Ross is chief executive of the California Endowment and chair of the Diversity in Philanthropy Advisory Board.