The Wall Street Journal

Your post-election day editorial attack on community organizers (“The Latest Charity Shakedown,” Nov. 5 – See Below) is inconsistent with the Journal’s recent strong support for transparency and scrutiny of the Wall Street firms that have helped cause the economic meltdown.

Many members of the heavily tax-subsidized foundation world often act like irresponsible hedge funds or subprime investment houses with exorbitant salaries, high-end retreats and lavish offices. All of this is subsidized by the taxpayer. Foundations with $700 billion in assets receive an estimated $40 billion annually in tax subsidies without any effective federal or state scrutiny.

Your attack on the Greenlining Institute — an organization representing the aspirations of 110 million minorities — for “shaking down” foundations is misplaced. All we have requested is that foundations award a far larger percentage of their philanthropic dollars to the people who live on Main St. rather than to pet causes that serve the wealthy and elite. As a small part of this effort, we have urged foundations to provide the same race and ethnic data that many Fortune 500 companies regularly share with the public.

According to a recent study conducted by the Foundation Center entitled “Embracing Diversity,” only nine independent foundations (of 50 analyzed) in California targeted more than 20% of their grant dollars to minorities in 2005. California’s communities of color make up 60% of the state’s population. In a nation founded on the principle of no taxation without representation, would our Founding Fathers be called “shakedown artists” for requesting fair and equal treatment of taxpayer dollars?

Now that the electorate is increasingly speaking for greater regulation and scrutiny, the responsibility for overseeing foundations can be transferred from community organizers to Congress itself. We hope Sen. Chuck Grassley and Rep. John Lewis will examine issues such as: why such a small percentage of foundation annual income is awarded for philanthropy; whether the more than $40 billion annually in tax subsidies a year from federal and state taxpayers are justifiable; and whether goals and incentives should be set so foundations serve the poor and working-class communities that live from paycheck to paycheck.

Orson Aguilar
Incoming Executive Director
The Greenlining Institute
Berkeley, Calif.

Len Canty
The Black Economic Council

Oakland, Calif.

The Latest Charity Shakedown

Do you know the color of your donees?
The Wall Street Journal
November 5th, 2008

What if the Greenlining Institute held a shakedown and nobody paid up?

The Berkeley-based outfit invited representatives from America’s top 50 foundations to come to their offices two weeks ago for a chat on the urgent national priority of “diversity in philanthropy.” Among the questions posed: “What percent of the asset management firms under contract with your foundation are minority-owned?” We’re delighted to say that not a single one of the foundations sent Greenlining any data and no one showed up to the meeting. Maybe they’re starting to catch on to this con game.

It’s been four months since 10 of California’s largest foundations agreed to hand over millions of dollars to “minority-led nonprofits.” This “gift” was an attempt to head off legislation pushed by Greenlining that would have required California’s foundations to disclose the racial composition of their boards, staffs and grantees. In the age of Barack Obama, we apparently still need to color-code America’s nonprofits.

That shakedown worked so well that Greenlining is taking its race gambit national. Eight foundations in Pennsylvania have received a letter from state Representative Jake Wheatley of Pittsburgh. “Considering the projected dramatic demographic shifts that are projected [sic] for Pennsylvania,” he wrote, “I believe that it is important to start conversations early on what philanthropy is doing to empower minority communities.” He requested “demographic data” — that is, a racial headcount on foundation grantees.

Greenlining thoughtfully agreed to sift through this data and, as Mr. Wheatley put it, “reveal opportunities to better serve Pennsylvania’s diverse population.” The institute previously claimed that while racial minorities made up 50% of California’s population, they received only 5% of philanthropic dollars. Of course, it all depends on how you count. The idea that a charity must be “minority-led” in order to assist minorities is silly. Should Teach for America insist that only blacks can work in minority-dominated schools, or should Catholic Charities have a racial quota for its employees? Many foundations also do not have, as part of their missions, the mandate to “empower” minority communities. They prefer to fund cancer research, say, or to save the whales.

It turns out that Greenlining’s methodology also leaves much to be desired, according to a recent report from the Statistical Assessment Service at George Mason University. “The sampling and response rate problems alone invalidate any conclusions that go beyond a small and unrepresentative group of foundations in terms of both their number and the amount of assets they control,” says the report.

Which brings us back to Pennsylvania. Mr. Wheatley told us that he got a “100% response rate” from the foundations that he surveyed. Which isn’t entirely true. Douglas Root, a spokesman for the Heinz Endowments, emailed us: “We supplied no data to Greenlining.” He explained that, “Reducing an important issue, and a complex one, to a single data point is shallow methodology.”

Brent Thompson, the director of communications at the William Penn Foundation, says his group also gave away nothing. While the staff did provide Mr. Wheatley with a list of the foundation’s grantees (which are publicly available anyway), Mr. Thompson says they offered no racial information: “We left blank the column that they were really looking for. And we have no plans to keep that data going forward.”

Mr. Wheatley hasn’t released Greenlining’s Pennsylvania report, but we hope these foundation leaders will continue to stand up in the face of this onslaught from the race grievance industry. This exercise isn’t about helping the poor. It’s about greenlining the pockets of liberal political activists.