March 03, 2009
Group Pushes Foundations to Give More to Minorities and the Poor
By Ian Wilhelm
Washington
Foundations should spend at least half of their grant dollars to help poor neighborhoods and minorities, a foundation watchdog group here said today as part of a series of recommendations on how grant makers should improve their giving and management.
The proposal by the National Committee for Responsive Philanthropy received support from a member of Congress and at least 120 charitable leaders, but several associations that represent foundations have criticized it, arguing that the approach would stifle philanthropy.
As part of a new report, the watchdog group suggested about a dozen standards.
These include pushing foundations to provide 50 percent of their grant dollars to pay for the operating expenses of charities, 25 percent to support advocacy efforts, and to give away a total of 6 percent of their assets in grants each year. Federal law requires foundations to give 5 percent of their assets in grants and for other charitable purposes, including some administrative costs.
The pressure to get more philanthropies to help the poor and minority populations has generated the most controversy and comes on the heels of similar advocacy efforts in California and other states.
According to three years of giving data from over 800 grant makers, the organization said that only 13 percent of the foundations it examined meet its criteria for giving and that 1 out of every 3 grant dollars benefits “lower-income communities, communities of color, and other marginalized groups, broadly defined.”
“This is, frankly, appalling, and it must improve if foundations are going to be relevant to addressing the most important problems facing our nation,” said Aaron Dorfman, the executive director of the National Committee for Responsive Philanthropy, during a press event to announce the standards.
He said his organization wants to trigger a debate about how foundations should operate, especially today during a recession when charities and many people are strapped for cash.
‘We Have an Obligation’
Rep. Xavier Becerra, a Democrat from California, agreed. Mr. Becerra, who is a member of the Ways and Means Committee, which oversees tax matters, said the standards will help members of Congress examine how foundations are performing.
He said he and some other lawmakers are calling for Congressional hearings that would explore whether foundations are spending their money wisely. With the busy schedule on Capitol Hill, he did not know when these hearings could happen. But given the tax benefits philanthropies receive, Congress needs to keep an eye on them, he said.
“We have an obligation to see that taxpayer money is being well invested,” he said.
Mr. Becerra said he is not considering legislation that would require foundations to make changes in their giving or governance, but wants to bring some “sunshine” on their activities.
Mr. Dorfman said that his organization is not seeking greater regulation of philanthropies, but will be sending its report to lawmakers to educate them about the issues facing philanthropy.
‘Cannot Endorse Mandates’
Several grant makers, including the Atlantic Philanthropies, endorsed the standards. But the Council on Foundations, the Philanthropy Roundtable, and other nonprofit associations oppose them.
Given the diversity of philanthropic organizations and causes, “we cannot endorse mandates, or imposed measures that seek to promote a one-size-fits-all approach,” said Steve Gunderson, president of the council, which represents about 2,000 grant makers.
The Philanthropy Roundtable, which represents both foundations and wealthy donors, said in a statement: “These benchmarks have nothing to do with measuring effectiveness. In fact, the natural consequence of these benchmarks will be to reduce the scope and diversity of the foundation sector to one that serves a more narrow set of highly politicized interests.”
The roundtable said the criteria set by the National Committee for Responsive Philanthropy would hurt charities whose missions do not directly benefit the poor or minorities, like National Public Radio and the Make-A-Wish Foundation.
Mr. Dorfman said his organization was not asking philanthropies to stop giving grants to the arts, the environment, or other causes not related to alleviating poverty. “We’re not saying an arts funder should abandon the arts and fund social services,” he said.
Instead, he said he would like all foundations, regardless of their mission, to consider how the programs they support could do more to include poor people, blacks, Latinos, and others.
“Critics will say that total, unfettered freedom is what makes philanthropy valuable and that NCRP’s criteria are somehow a threat to that freedom,” he said. “But every industry in America thinks it can operate best with total and complete freedom, and we all know that’s not true.”
The National Committee for Responsive Philanthropy’s report, “Criteria for Philanthropy at its Best: Benchmarks to Assess and Enhance Grantmaker Impact,” is available on the organization’s Web site.
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This is ridiculous. The medical research, the art exhibits, the community playgrounds and thousands of similar “race neutral” projects supported by American foundations benefit all our society equally. But even if that was not the case, people with wealth establish foundations for the long-term benefit of causes they believe in. They populate their foundations with directors and program managers who share their vision. If the NCRP feels there are important causes that are not being served, they should start their own foundation. This is an elegant form of extortion and the NCRP should be prosecuted by the attorney general. Another way of phrasing the arguement NCRP is making is that if they don’t like a foundations politics they will jerk the tax exemptions and spend those extra tax dollars on program they feel are “more valuable”. This is thuggish.
— marcus Mar 3, 04:08 PM #
Marcus is right. NCRP is quietly fostering another form of wealth-distributing taxation.
— Realist Mar 3, 04:14 PM #
I also agree with Marcus. This is yet another example of political activism attempting to force their worldview on all without completely thinking through what the consequences would be. Will we ever be free of polical correctness?
— Jim Mar 3, 04:34 PM #
Does Mr. Dorfman believe that the only people who attend cultural events are white? If this is the case, he needs a better grounding in the cultural life of our country before he makes judgements about foundations who donate to cultural institutions.
— Debbie Mar 3, 07:29 PM #
The article addressed the inadequate responsiveness to low income and minority communities. I do not understand why this has become a racial issue. I don’t believe low income whites living in the Appalachia Mt. can appreciate the investments made in culture institutions.
— B.D.N. Mar 3, 09:25 PM #
Most programs support EVERYONE regardless of race: mentoring, afterschool programs, tax assistance, credit counseling, food pantries, etc. Isn’t it better to have programs available to everyone? Maybe the real issue here is more communication in minority communities so they take advantage of services available?
— AP Mar 4, 03:22 PM #
Foundations and non-profits should serve as an important mechanism for the just re-distribution of wealth to affirm equality and equal opportunity. Clearly there are is a gross disparity between rich and poor. And the rich are the very ones controlling these foundations. The Obama administrations plan to move governance of these foundations under government oversight will bring about a more just distribution of wealth. Only in this way can our society have a uniformity that affords equality for all.
— Malcom Mar 4, 06:30 PM #
Full disclosure: I am a board member of NCRP. (Anyone else have an affiliation they should disclose?)
NCRP’s Criteria is not a set of “standards” foundations must meet or submit to. The book doesn’t call for any mandatory changes either. The Criteria and each benchmark are meant to help guide grantmakers in thinking about if and how they can improve their grantmaking. They do not infringe the autonomy and liberty of grantmakers, nor are they “politically correct.” Instead, the criteria, especially the set around prioritizing socially and economically disadvantaged groups, grow out of our conception of justice – based in Rawls, Sen and others – that a just society works to not only ensure liberty for the individual, but also seeks to include and promote the development of all. Any kind of grantmaking, from fine arts to climate change to pure scientific research, and everything in between, can make a positive contribution to justice by taking this into account. And we believe foundation leaders both want to, and are fully capable of, taking justice into account in their grantmaking, whatever their field of interest.
— Pete Manzo Mar 5, 01:52 AM #
Mr. Manzo’s comment is well taken. As with so many issues that come before the public, we all tend to get extremely edited versions of the entire issue and also, being human, we all tend to read into the discussion what we want to see or what we want to oppose. I would suggest that the NCRP refocus the disucssion on the broad issues of justice and support an industry-wide conversation on these broad concepts. This would put the emphasis on the mission related choices all NGOs can adopt while still keeping their grantmaking focused on their particular fields of interest.
As soon as you begin talking about congressional action, etc. you take the discussion out of the theoretical and begin inspiring thoughts of carrots, sticks, limits, and punishments, as the comments above indicate.
— Fred Mischler Mar 5, 11:55 AM #
Actually, NCRP has always been consistent in its “holier than thou” attitude. It’s just a shame that it can pull so many other good people into its rhetoric. I spend a lot of time with community foundations and have learned that charitable people have thousands of beliefs as to what elements are important to a good life, whether its religion, the arts, education, or social justice. We agree on a set of joint priorities through government, and pay for it with taxes at every level. At what point are people allowed to choose how to spend their disposable income?
— Rick Schwartz Mar 5, 07:36 PM #
OK, I have tried to ignore it. I have told myself that the issue in the above article is on what I should be focused, not an offhand remark from another Commenter who probably meant well. However, I have concluded that my irritation is justified. Stereotypes can be harmful even in philanthropic minds.
On March 3 B.D.N. included the following as part of his or her comment: “I don’t believe low income whites living in the Appalachia Mt. can appreciate the investments made in culture institutions.”
Huh? Having been born and raised in the coal fields of the Appalachian Mountains I can affirm that a great many of the people living there have a wonderful appreciation for “culture institutions.” There are museums, colleges, theaters, craft fairs, music concerts, gardens, clubs, etc. throughout the region. Low income whites (and people of every color and economic status) are no less cultured than anyone else; unless your definition of “culture” only means that which is experienced at the Met, MOMA, the New York Philharmonic, or the Kennedy Center. Leonard Bernstein is a cultural icon, but so are Ralph Stanley and Bruce Springsteen.
While I no longer live in the region, I do maintain an appreciation for the culture/cultures that exist there. I also have a great empathy for low income individuals and underserved populations, whatever race they may be. I volunteer my time and donate my money and resources to a couple of worthy causes that help the underserved of any race. Hunger and homelessness can afflict anyone at any time; I believe the current economic situation as well as Hurricane Katrina have proven that to us all.
Does this mean I believe the only “cultural institutions” in Appalachia that deserve grant funds are those who are operated by minorities or who are only using the money to help “uplift” the poor? No. Does that mean these “cultural institutions” aren’t worthy causes? No.
Foundations give funds to causes that match their missions. Maybe the problem isn’t that they aren’t giving enough to help minority populations and the poor. Maybe there aren’t enough people giving money to foundations with those priorities in their missions.
— Melissa Mullins Mar 6, 05:29 PM #