Racial-Ethnic Diversity and Foundations in New York City:
The Lessons from the California Experience
A Citywide Forum of the NYC Collaborative for Fairness & Equity in Philanthropy
By Angelo Falcón
Special for the CFEP Update (Novmber 22, 2009)

The New York City Collaborative for Fairness and Equity in Philanthropy (CFEP) held its first forum, “Racial-Ethnic Diversity and Foundations in New York City: Lessons from the California Experience,” on Monday, November 9th in Manhattan, to packed room of over one hundred. The purpose of this session was to promote a discussion of how communities of color in New York can better hold foundations accountable, part of a year-long deliberative process by CFEP.

Jill Williams, a program officer at the Andrus Family Fund and a CFEP Coordinating Committee member, opened the session. She introduced members of the committee and a short film developed for the forum by CFEP-Andrus Graduate Fellow, Thanu Yakupitiyage, which outlined the themes that would be the focus of the forum.

Angelo Falcón, CFEP Chair and President of the National Institute for Latino Policy (NiLP), moderated the forum. He made some introductory remarks explaining that CFEP was created as a result of a series of briefings to New York nonprofits held by the California-based Greenlining Institute this past year. Falcón outlined the strategies being considered by CFEP for New York that ranged from promoting legislation to increase the regulation of foundations, to activities to better educate philanthropy about the needs of the city’s communities of color.

The New York City Collaborative for Fairness and Equity in Philanthropy (CFEP) was established in 2008 as a collaborative of nonprofits of color and foundations to give voice to Asian, Black, Latino and Native American communities in current discussions about fairness and equity in the foundation sector. Among the issues of concern to the New York City Collaborative is the persistent problem of the underrepresentation of Asian, Black, Latino and Native American communities in the governance, staff and funding of foundations in New York City.

According to the Census, of New York City’s 8.2 million residents, about two-thirds (65 percent) are people of color. Latinos are 28 percent of the total population, Blacks are 24 percent, Asians are 12 percent and Native Americans are 0.2 percent. Recent Census population projections indicate that communities of color will become a majority of the country’s population by 2042, eight years earlier than the last official projections that were made.

However, according to an unpublished analysis of the 12 largest foundations giving grants in New York City in 2005, the Greenlining Institute found that only 8.6 percent of their grants and 8.0 percent of their grant money went to organizations led by Asians, Blacks, Latinos and Native Americans. In addition, the Rockefeller Philanthropy Advisors, based on data from the Council on Foundations, found that in New York City-based foundations, people of color made up only 15.4 percent of Board members, 5.6 percent of CEOs and 34.6 percent of all staff.

In the job title in foundations best represented by people of color in New York City, that of program officers, of which 43.8 percent are non-White, there was a wide variation for each subgroup. For example, the largest population group, Latinos, made up only 7.1 percent of the program officers; Blacks made up 18.8 percent, Asians 15.2 percent, and Native Americans 0.9 percent.

The available evidence thus points to a serious problem of underrepresentation of communities of color in the funding, governance and staffing of New York City foundations. The New York Collaborative on Fairness and Equity in Philanthropy was organized to address this persistent problem by working collaboratively with the foundation sector to devise solutions.

The Greenlining Institute and the California Experience

orson-aguilar The first speaker was Orson Aguilar, Executive Director of the Greenlining Institute. He began by describing the work of his organization which he described as developing policy, organizing and leadership in communities of color with the goal of making them part of the decision-making process and part of the movement for racial equity. By 2050, it is projected that California’s population will be 70 percent people of color, making Greenlining’s work important for the state and country as a whole. Greenlining has trained over 300 young persons of color to play leadership roles throughout the United States.

Joking, he announced that the economic crisis is over! But, more seriously, he spoke about the growing racial-ethnic economic disparity that exists, in which communities of color are losing more economic ground than Whites.

Aguilar explained that Greenlining’s work on philanthropy is based on their belief that for foundations to be effective they must engage those communities closest to the problem, a point that foundations like Ford promote. They began by trying to conduct a survey of foundations in California and found great resistance and nonparticipation, with some foundations even threatening to sue. They then conducted the next best type of research based on existing data from The Foundation Center. Among their major findings was the fact that those nonprofits in California that received most of the grants were the least diverse. This report led to a backlash by foundations.

Greenlining felt it then had no choice but to pursue legislative remedies. This led to California State Assembly Bill 624 (AB 624), which got some traction when the legislators sponsored a hearing and found that the foundations were blowing them off. The purpose of the bill was to assure transparency in the operation and character of the governance, staffing and grant-making of the state’s largest foundations. Its purpose was simply reporting of data and other information, with no penalties or fines being involved. Aguilar then showed a slide with a large panic button, explaining that the state’s foundations overreacted, acting as if the world was going to come to an end as a result of this proposed legislation.

Ultimately the foundations headed off the legislation by forming a Foundation (also known as the AB624) Coalition, in which 9 of the largest California foundations committed themselves to providing $30 million in new monies for capacity-building for nonprofits of color. While Greenlining was congratulated by those nonprofits who received some of this money, those that didn’t were critical and pressed Greenlining to do more.

He explained that it was not clear that this bill would have survived in any case. The governor of California, for example, is a Republican and given the controversy over the bill probably would have ultimately vetoed it. The positive outcome of the introduction of this legislation was the dialogue that it generated on these issues, eventually forming part of a national conversation on philanthropy and diversity issues.

In thinking about lessons learned, Aguilar noted that communities of color need some leverage to have an impact on this conversation, whether this means increased government regulation or the threat it presents. However, he also found that many nonprofits of color decided to wait out the controversy because of their fear of not getting funded.

During this debate over the proposed bill, he spoke about a number of myths that were being propagated. The main one was that Greenlining and this bill wanted to change donor intent. He pointed out that by increasing diversity foundations could more effectively produce results that fulfilled donor intent. He cited the research of the National Committee for Responsive Philanthropy for empirically-grounded research that made this very point.

Aguilar concluded by making the following recommendations:

Track the data: there is a need to regularly report on foundation giving patterns, board composition, and even asset management and the diversity of their investments, issues which Greenlining is currently pursuing.

Be at the table: while foundations are notorious for hiring consultants on diversity that produce reports that grantees and the public never see, it is important to recognize that nonprofits of color themselves can be a resource to foundations on these issues and that they usually are willing to provide such advice for free.

Create a public-private partnership with foundations: the proposal of AB 624 created a hostile atmosphere when what was needed was the building of trust among all concerned.

He felt, however, that there is a need for strategies that use both the carrot and the stick. He closed by observing that philanthropy cannot succeed if it excludes.

Criteria for Philanthropy at Its Best

The next speaker was Aaron Dorfman, Executive Director of the Washington, DC-based National Committee for Responsive Philanthropy (NCRP). He started by explaining that the technique he would be using for his presentation was one he recently was asked to use at the annual conference of the Independent Sector called Pechakuche (Japanese for “chit chat”) that calls for, among other things,  presenting 20 slides in 20 minutes.

Dorfman informed the group that his organization was established in 1976 as a foundation watchdog. The basis of holding foundations accountable is that they give out what are partially public dollars, in which the taxpayers are partners.

He cited research that found that diverse groups make better decisions. The results are fairness, justice and inclusion, enhanced by a multi-faceted diversity.

His organization’s research has found that only $1 out of $10 benefits marginalzed groups, and this is with a very broad definition of diversity. In their recent report, Criteria for Philanthropy at its Best, they suggested that foundation should devote 50 percent of their grant-making to these marginalized populations, but found that only 13 percent met or exceeded this criterion.

The reaction to this report suggesting ways foundations could be more effective was met with strong criticism from certain foundation leaders, some charging it with promoting quotas. Dorfman argued that it is this type of misidentifying problems that hinders progress, such as the definition of the problem by some foundation leaders for the lack of diversity in their funding being the lack of capacity by nonprofits of color rather than, for example, the foundations making decisions in isolation.

Some foundations have adopted the criteria the report recommended, while others panicked. They received the biggest pushback from foundations on two issues: its promotion of diversity, and the characterization of foundation funds as public dollars.

The NCRP conducts studies that present evidence-based cases of best practices, which help to build the collective voice of grantees. Dorfman finds that foundations rely on grantees to do their work.

He feels that policymakers need to provide more leadership in this area. Part of this is promoting the need for better data on diversity because, as he put it, we value what we measure.

Now, he argued, is the time to press for these changes. Foundations, grantees, philanthropic trade associations and policymakers need to get more involved.

He pointed to the recent study by Philanthropy New York, in conjunction with the Foundation Center, Benchmarking Philanthropy, as an example of the type of work that needs to be done. This study found, for example, that 16 percent of CEOs of foundations in New York City were people of color and women, compared to 6 percent nationally; and that 17 percent of trustees in New York foundations were people of color and women, compared to 13 percent nationally. Although he cautioned that he had serious questions about the adequacy of the sample sizes used in this study, he thought that this type of research was important.

In holding foundations accountable on the issue of diversity, the question was which should be the focus. Should it be on the lack of CEOs, the beneficiaries of the grants, the support of minority-led organizations, the composition of trustees? What the focus is will determine the different strategies that need to be pursued.

These strategies need to be developed at both the micro- and macro-levels. At the macro-level there is a need for more education and research. At the micro-level, specific foundations that are seen as being “moveable” on diversity issues need to be identified and actively engaged.

Dorfman explained that his organization promotes such changes as getting foundations to focus more of their grant-making on the most vulnerable populations, get more resources to programs that promote systemic change, more funding going to unrestricted, general support grants, more multi-year grants and easing the paperwork requirements of applying for and reporting on grants. These also include such things as stopping the compensation of foundation trustees, moving more endowment investments in socially responsible ways, and making foundations more open in their operations.

Questions and Answers to the Speakers

A question and answer period of the speakers followed. Falcón asked the speakers about the problem that when discussions are held on diversity issues that the foundations that usually show up to discuss the issues are the “good guys” that have the best records but that those with the worst records never seem to appear in these forums. How, he asked, do you get these foundations engaged. While Aguilar confessed that he was not sure how to do this, Dorfman felt that this is the role that the philanthropic trade associations, like the Council on Foundations and Philanthropy New York, can play. Instead of holding meetings and forums on diversity issues and simply waiting for them to come, these groups should intentionally bring these absent foundations into the broader group. He gave the example of the Council of Michigan Foundations, which has begun to do this.

One person asked Orson Aguilar his advice on the adoption of a legislative strategy in New York. He responded by saying that he would recommend pursuing this avenue only if we thought we could get such a bill passed. If not, his experience was that the introduction of such legislation only created hostility ad divisions among what should be potential partners. Alfred Placeres of the NYS Hispanic Chamber of Commerce asked if the speakers thought that the Sarbanes-Oxley Act of 2002 could be used to hold foundations more accountable. (The legislation set new or enhanced standards for all U.S. public company boards, management and public accounting firms.) Both speakers indicated that they were not aware of ways that this law could be used for this purpose.

Open Discussion on Strategies for New York City

The forum then turned to a wide-ranging open discussion of strategies to hold foundations more accountable to communities of color. This was opened by remarks by Melody Capote, Executive Director of the Caribbean Cultural Center, who cautioned the group to not use the term “minority” when people of color are now, in fact, the majority of the city’s population. She went on to speak about the efforts of the Cultural Equity Group (CEG), which she was representing, that brought together cultural organizations concerned about the underfunding of arts and other cultural institutions of color by government in New York. She explained that CEG was becoming more national and was now starting to look at foundations. She stated that the CEG looked forward to working jointly with CFEP on this issue.

Athena Moore of Black Agency Executives, who is another member of the CFEP Coordinating Committee, expanded on a draft one-page strategies outline circulated to the forum participants that was developed by CFEP. She explained the three-part strategy being considered by CFEP, asking for feedback from the audience.

Moore reported that CFEP seeks to improve the disparate philanthropic support to racial-ethnic minority-led nonprofits compared to other organizations. In its Statement of Principles, she added, CFEP points to institutional discrimination as the primary cause of inequity in foundation giving to non-profits led by and serving communities of color. Additionally, CFEP acknowledged that “racial-ethnic diversity alone is not substantial enough of a goal . . . diversity by itself does not address racism.”

The possible three strategies outlined by CFEP, in order of priority, are:

* Increasing the capacity of nonprofits of color to organize collectively to affect sector-wide change among foundations, promote self-regulation by the sector and monitor progress.

* Work with individual foundations to promote diversity within them and improve their accountability to communities of color.

* Promote increased government regulation of foundations for greater transparency, more reporting on their activities, and greater targeting of resources to the most vulnerable.

Falcón also pointed out that CFEP is considering what organizational form it should take. Currently an all-volunteer effort with no budget, he reported that consideration is being given to the options of remaining informal, to creating a strategic alliance with an existing organization that could act of our fiscal agent, or becoming a full formal nonprofit organization. It is also evident, he explained, the in order to accomplish its goals that CFEP will need resources to develop some basic infrastructure.

In the open discussion that followed, forum participants raised a host of issues and questions. Mario Tapia of the Latino Center for Aging expressed frustration with the problem of the foundation sector’s underfunding of Latino organizations and called for CFEP to push for the adoption of legislation to better regulate foundations. Others felt that there was no need for more research on this issue of diversity in the foundation sector and that action was what was needed. Larry McGill, Vice President for Research at The Foundation Center, spoke about the need for research to guide action and the study they just released on the state of diversity among New York foundations and nonprofits as part of the Diversity In Philanthropy Project they jointly sponsor with Philanthropy New York.

Jessica Chou of the Rockefeller Philanthropy Advisors urged the group to follow the money and to keep our strategies simple. The question of making sure that CFEP does not reinvent the wheel and duplicate existing efforts in this area was voiced by Lillian Rodriguez-Lopez of the Hispanic Federation. One White funder explained that he finds himself acting as a surrogate for people of color in his foundation and stressed the importance of bringing these communities in as full partners in the foundation sector.

Closing Remarks

Falcón closed the forum by stressing that this event was part of an ongoing process of consultation and strategy-building, asking the participants to send any other recommendations that may have to CFEP. Nonya Collier, another CFEP Coordinating Committee member and Greenlining Institute alumnus, informed the participants that CFEP will be holding a General Meeting on December 1st to make decisions on its future directions, encouraging all to attend. Falcón also mentioned that besides the action-strategies that CFEP also has to make decisions about the organizational form it needs to take to effectively implement these strategies. He pointed out that CFEP is currently an all-volunteer effort with no budget, but that the question of whether to become a nonprofit, develop a strategic alliance with another organization or remain an all-volunteer is now on the table.

The expectation is that with initiative like CFEP and the work of organizations like the National Committee for Responsive Philanthropy and the Greenlining Institute there exist important new starting points for a much-overdue reexamination of diversity within philanthropy. But it is only a discussion that will make sense if Asian, Black, Latino and Native American communities can say ¡presente!, fully at the table.