• July 30, 2014

Foundations and Diversity

Tuesday, May 6, at 12 noon, Eastern time

American foundations are often criticized for failing to appoint leaders who reflect the diversity of the nation and for giving too little money to groups that serve minorities.

The concern has grown so intense that California is now considering a measure that would force big foundations to disclose more information about the ethnic and racial backgrounds of their leaders and grantees.

But the measure is controversial and has touched off a wider debate about whether foundations are doing a good job of keeping up with the changes in America's demographics.

Are these criticisms fair? How much attention should foundations pay to diversity

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The Guests

Robert K. Ross is chief executive of the California Endowment, in Los Angeles. Mr. Ross has been a key player in the Council on Foundations' recent efforts to improve the diversity of foundation governance and grant-making practices.

Mark Rosenman is the director of Caring to Change in Washington. Caring to Change, which works with the Aspen Institute, is attempting to work with foundations to create new strategies that have broad impact in advancing social change.

A transcript of the chat follows.

Peter Panepento (Moderator):
    Welcome to today's live discussion on foundations and diversity. We're joining you today from the Council on Foundations annual conference outside of Washington, D.C. With me are Robert K. Ross of the California Endowment and Mark Rosenman of the Aspen Institute. Both are here to take your questions on this important topic.

Peter Panepento (Moderator):
    To ask your question, please click on the "ask a question" link on this page.

Peter Panepento (Moderator):
    We also invite you to check out some recent opinion articles on this topic written by Dr. Ross (http://philanthropy.com/premium/articles/v18/i15/15003501.htm) and Mr. Rosenman (http://philanthropy.com/premium/articles/v20/i14/14003801.htm)

Question from Katie, mid-sized nonprofit:
    For foundations that have made diversity a funding priority, do you think that their interests lie mainly in helping organizations working in their existing fields of interests become more diverse, or is it more a matter of building diversity "across the board" (ie, for organizations working in areas they wouldn't normally fund)?

Mark Rosenman:
    It's difficult to generalize; my sense is that you'll certainly find both types of grants programs. I think that proposals that see strengthening diversity as instrumental to other program and organizational interests and objectives might well be attractive to both of the alterantives you posit for funders.

Question from Katie, mid-sized nonprofit:
    What responsibility do you think foundations have to help fund new diversity initiatives that their grantees undertake?

Robert K. Ross:
    Hi Katie,

First, some context-setting. At our foundation at the California Endowment, we view the emphasis on diversity as central to our mission and our set of operating values. So we draw the critical path from mission to values, values to vision, vision to goals, and goals to outcomes with some degree of linearity. That is, we should not need to twist ourselves into a pretzel to support a diversity initiative. With that context, the short answer is "yes", because the compelling case should be made that the initiative is in line with mission and goals.

Peter Panepento (Moderator):
    Both of our guests are busy answering your questions as we speak. But they will have time for plenty more. Please click on the "ask a question" link on this page to share your questions. Or feel free to join the discussion by posting a comment.

Question from Hsien hong lin ( Joe ) doctrol candidate of higher education administration of KENT STATE UNIVERSITY:
    Foundations play a role in distributing efficiently social resources for social- just sakes. Unfortunately, the current American economy is going into recession. Therefore, foundation roles are a critical stage to replace, more or less, governmental welfare functions. I have two questions: 1.How foundations face and go through the economic recession in order to take care of specific groups who need assistances from Foundations? 2.Diversity has involved in many foundation organizations and leadership according to these referenced articles. Please tell us more about the relationship between diversity and foundation leadership.

Mark Rosenman:
    On your first point, foundations need to be counter-cyclical and part of the reason for growing endowments is to protect their capacity to do so. In times if great need, they should be able to draw down on some of those resources. However, their funds ought not be regarded as a substitute for government dollars. Our economy is not so strained that better public policy priority decision-making would find it impossible to attend to the general welfare you reference.

On your second point, foundation leadership does not yet reflect adequate diversity, so we don't know what its impact would be. Under 6 percent of foundation chief executives are people of color or ethnic minorities; under 13 percent of foundation trustees can be so charcaterized. We do know that increased diversity in the ranks of program officer positions alone has not resulted in a substantial shift in grantmaking patterns.

Question from Ian Wilhelm, Chronicle of Philanthropy:
    Robert, Mark, thanks for answering our questions today.

I wanted to find out your reactions to the proposal to the California government by John C. Gamboa, executive director of the Greenlining Institute, that "half of the annual income of the stateís foundations be devoted to helping low-income victims of the recession for the next two years."

Do you think this will have any political traction? Robert, do you oppose this proposal?

Thanks.

Robert K. Ross:
    Hi Ian,

I believe this is a well-intended bad idea, and for two big reasons. First, at our foundation -- and many others share this view -- "change trumps charity." Philanthropy ought to function as civil society's "passing gear", focusing on ideas and strategies to drive systemic and policy change -- or more broadly defined as social change. Gamboa's idea affirms the old model of philanthropy as straightforward charity, and places handcuffs on those of us striving to move a social change agenda. Philosophically its just a bad idea to impose on the field, and the implied message to federal and state policymakers is: "You can go ahead and cut services for the poor and disenfrachised anytime you want, because philanthropy will step forward and fill in the gap you create." That message will have a disastrous opposite effect on the issue of societal accountability to poor and marginalized communities.

The second reason is it a bad idea is that the math doesn't come close to adding up. Let me use our foundation as an example. The California Endowment will spend about $160mil+ in grants and charitable activities this year. This amount represents about 0.4% (yes, 4/10ths of one percent) of the state's medicaid budget for this year -- and medicaid is just one of several state funding streams in health care for the underserved. Bottom line: foundation funding is rounding error compared to the vast amounts of public sector/governmental funding.

I have an alternative for proponents of this bad idea: how about a coherent and strategic national and state public policy strategies to reduce poverty and improve economic opportunity?

Question from Bernice Sanders Smoot, Saint Wall Street:
    Faith-based programs that serve at the frontlines of human need have the greatest history and diversity of any serving mankind. By my nationwide experience, most are headed by minorities. Why would there even be diversity efforts with insufficient representation of faith and minority leaders, not only in the body, but at the head?

Mark Rosenman:
    I think that faith and minority leaders indeed are engaged in many diversity efforts, as certainly is appropriate. And as has been pointed out by many others, some faith-based institutions themselves would benefit from diversity efforts.

I also agree with the point I believe you are making that diversity needs to be reflected at all levels of organizational life, it needs to implicate power, if it is to be meaningful.

Question from Peter Panepento:
    Dr. Ross, perhaps you can talk a bit about the role foundations can play in promoting equality. Can foundations really be leaders in this area?

Robert K. Ross:
    Hi Peter,

Great question. My view is that not only can foundations be leaders in advancing equity, but they SHOULD be. Inequity of opportunity is the single greatest threat to a vibrant and dynamic democracy here in the U.S., and peace and prosperity abroad. I would argue for two key roles foundations could play -- and large, small, or mid-range foundations can play them. First, funding innovative approaches to improve equity (in economic opportunity, public education, health care, or housing etc) is one role. The second is to provide advocacy support to "scale up" those successful innovations when we find them.

Peter Panepento (Moderator):
    We've reached the halfway point in today's discussion. Thank you to everyone who is taking the time to be here today. We still have time for more of your questions, so please feel free to fire away.

Question from Peter Panepento, Moderator:
    Mr. Rosenman, how much progress has been made by American foundations on promoting diversity and equality in recent decades? Has the difference been noticeable, or has progress been slow?

Mark Rosenman:
    Progress has, in my mind, been much too slow. While the data do show statistically significant growth, to say the the representation of racial and ethnic minorities has doubled or tripled as foundation chief executives isn't particularly impressive when you understand that the total today still stands at under 6 percent. The growth in program officers and trustee (to about 35 percent today) positions held by racial and ethic minorities, and by women, is also statistically significant, but still hasn't yielded much of shift in grantmaking. Progress is noticebable, but it's nowhere close to enough.

Question from Rachel, mid-size non-profit:
    We're creating new positions and expanding programs. When doing so, what is the best way to embark on an initiative to include diversity in a program procedure manual, for example? We talk about diversity and we mention our commitment to it in our bylaws, but what is the best way to get it into our practices, from your experience?

Robert K. Ross:
    Rachel, my view is to begin with the end in mind. Have you had a thoughtful and meaningful conversation at the board and staff levels about diversity? Have you organizationally agreed on how and why you think diversity is supportive of your mission and goals? You MUST reach consensus of why diversity is important (or not important?) to what you are trying to achieve: is it better customer service? Is it expanding the range of ideas and perspectives? Is it part of a community engagement and empowerment strategy? Once you get a handle on why diversity is important to your mission and goals, the rest will become clear.

Peter Panepento (Moderator):
    Dr. Ross was part of a great panel discussion on this topic yesterday and offered some interesting insights into some of the discussions going on in his foundation. Please go to our conference blog, http://philanthropy.com/news/conference for full coverage of his and other sessions at the Council on Foundations conference.

Question from Katie again:
    Diversity can mean different things to different people. How do you suggest that organizations figure out what "kind" of diversity to focus on: ethnic, class, gender, etc?

Robert K. Ross:
    Hi Katie,

I may be a minority-viewholder on this point, but I do not believe in sector-wide definitions of diversity i.e. an omnibus definition that should apply to every nonprofit and foundation. We cannot forget how diverse the field of foundations is, and each needs to define diversity in the context of their mission, region, and priorities.

At the Endowment, we define diversity broadly, to include race-ethnicity-gender-disability-sexual orienation and...geographic diversity. There are health access inequities in a number of predominantly white rural communities in California, and we felt compelled to make certain that "their face is in the photograph" of diversity.

Question from Rachel, mid-size non-profit:
    We're creating new positions and expanding programs. When doing so, what is the best way to embark on an initiative to include diversity in a program procedure manual, for example? We talk about diversity and we mention our commitment to it in our bylaws, but what is the best way to get it into our practices, from your experience?

Mark Rosenman:
    Rather than to try a quick response to a complex question, please allow me to refer to a few resources. Independent Sector (www.independentsector.org) has a has an executive staff member directing a diversity project. Diversity in Philanthropy has a rich web site (www.diversityinphilanthropy.com). The Management Assistance Group (www.managementassistance.org) provides technical assistance on these tasks (FULL DISCLOSURE - I'm on their board). The Philanthropic Initiative for Racial Equity (www.racialequity.org) might also be helpful.

Comment from Rachel, mid-size non-profit:
    Just a comment - brilliant! Thank you so much. This answers my question precisely!

Question from hsien hong lin, Kent State University:
    Key point one: Foundations play a role in distributing efficiently social resources for social- just sakes. Unfortunately, the current American economy is going into recession. Therefore, foundation roles are a critical stage to replace, more or less, governmental welfare functions. Hsien Hong Lin requires questions 1. How foundations face and go through the economic recession in order to take care of specific groups who need assistances from Foundations? 2. Diversity has involved in many foundation organizations and leadership according to these referenced articles. Please tell us more about the relationship between diversity and foundation leadership.

Robert K. Ross:
    Hi,

I feel strongly that foundations ought to focus their attention on the innovative and strategic approaches to solve big and small problems. That is, although many foundations provide straight charitable support (homeless shelters, food programs, etc) -- and this is fine -- I would actually rather focus more of our resources addressing the root causes of social inequality: poverty, lack of affordable housing and public education, dysfunctional health systems. The worst thing we can do is send a message to Congress that they can cut programs for the poor and elderly because philanthropy will step in and take up the slack. On the second question, there is a major role to play for foundations to exert leadership on the question of diversity...I am chairing one such group of leaders, and go to our website at www.diversityinphilanthropy.com to learn more!

Question from Randal Mason, Change Matters:
    Is there general agreement among foundations about what constitutes diversity, both in terms of which groups you want to attract and what level of representation from those groups is considered desirable? How will you know when you have achieved diversity?

Robert K. Ross:
    Hi Randal,

At the risk of getting too Zen-like with this answer: the issue of Diversity is more like a journey than a destination. While many have argued for a sector-wide definition, I think this is an idea laden with traps and land mines. We can and should offer definition(s) of diversity as a template to support the exploration by individual foundations. But I don't like the idea of imposing a sector-wide definition. Foundations are far too diverse themselves, and it is my strongly-held belief that foundation boards must decide for themselves whether diversity is important, why it is important, and how they define it. That said, our foundation defines diversity broadly: race-ethnicity-gender-disability-sexual orientation and geographic diversity. Visit the Diversity in Philanthropy website at http://www.diversityinphilanthropy.com to learn more about how a group of foundation leaders is handling the issue...but for my money the quality of board and staff discussion on the issue is of greater value than the the eloquence of a definition.

Question from Bernice Sanders Smoot, Saint Wall Street:
    As someone who's worked with diverse faith-based and community organizations since 1997, I've found that the best way to achieve diversity at program levels is to have diversity at leadership levels. Attracting diversity to the board requires being able to relate, not only your mission to the diverse groups, but the diverse groups to your mission.

Robert K. Ross:
    Bernice,

I say "bingo" -- you have nailed it. Diversity at board leadership and management levels is critical. That is the DNA of any foundations' operating principles and behavior.

Robert K. Ross:
    Regarding "Diversity in Philanthropy", I am pleased to make two announcements. First, our national voluntary Diversity in Philanthropy initiative has released draft statements of "principles" and "practices" to foundation trustees and staff to examine, review and comment. Secondly, a group of foundation leaders is forming a small workgroup on "benchmarking excellence" in diversity in philanthropy. Please contact Henry Ramos or Dr. Bob Ross and/or visit our website at diversityinphilanthropy.com to learn more and become engaged.

Peter Panepento (Moderator):
    Our time is up. Thank you to everyone who took the time to join us today. And a special thanks to Robert Ross and Mark Rosenman from taking the time away from the conference to take part in this important discussion.

Peter Panepento (Moderator):
    A reminder: we have some great discussions coming up during the next two weeks. On Tuesday, May 13, we will discuss how to reach women as potential donors. On Tuesday, May 20, we will be joined by best-selling author and renowned marketing expert Seth Godin, who will take your questions about how charities can more effectively spread their message in a changing world. Both discussions will begin at noon Eastern time. See you then.

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