Number 5 • December, 2009
Policy Brief
The Future of Philanthropy in Florida
By Matthew Vadum
Senior Editor, The Capital Research Center Adjunct Scholar, The James Madison Institute
“And besides, what right has the State, or those calledupon to administer a charity, to dictate conditions to its ounder? Those conditions may seem to us oolish ancies;we may deem ourselves ar more competent to establishsuch as will secure the general object, but it is not ours tosay. When we see ft to create such a oundation out o our own ortunes, we shall be at perect liberty to showour wisdom, but it is out o place in administering the ortunes o others.”
— State v. Adams
, Missouri Supreme Court (1869)
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Introduction
I it’s your money, you should be allowed to spend it as you see t, shouldn’t you?Most Americans would agree you should have thereedom to dispose o your assets as you please. That’s thevery essence o America.I you’re eeling charitable and want to donate to thelocal opera house, that’s your business. I you want yourmoney to be devoted to a particular charity or othercause, that’s your call, too. And i you want your moneyto be spent on specic causes ater you die, that’s also your prerogative.But activist groups beg to dier as they challenge your reedom to choose how to spend your money. Theyargue that
they
should have a say in how your money isspent. I they prevail, they would undercut the idea o voluntary philanthropy and compromise the propertyrights o donors.“These groups, representing political activists and spe-cial interests, have developed a social theory to justiy theclaims they make on philanthropists’ money,” accordingto Capital Research Center President Terrence Scanlon.“According to them, philanthropy betrays its highest idealsunless it gives them grants.”
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The argument or the approach Scanlon criticizeswas laid out in “Criteria or Philanthropy at Its Best,” areport issued in March 2009 by the National Commit-tee or Responsive Philanthropy (NCRP). The reportargues that the best philanthropy nances “advocacy”and “community organizing” groups that know how to“contextualize” issues o race, gender and class whileworking or social and policy changes to overcome“structural barriers” to equality.
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This study examinessome o the issues raised by this assault on the principlesundergirding philanthropy.
The Roots of the Challenge
We’ve heard NCRP’s politically correct perspectivebeore. Former U.S. Labor Secretary Robert Reich hascomplained that too much philanthropy is devotedto “culture palaces,” including “operas, art museums,symphonies and theaters.”Donations to such institutions “aren’t really charitable
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The ndings and conclusions in this publication are those o the author and do not necessarily refect the views o The James Madison Institute members, sta, or directors. The Institute does not attempt to aid or hinder the passage o anyspecic piece o legislation and neither accepts government unds nor acts on the requests o special interest groups.
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contributions,” he argues. And because tax agencies areailing to receive taxes on the donations, according toReich’s zero-sum calculation, “this gap has to be lledby other tax revenues or by spending cuts, or else it justadds to the decit.” Some contributions are better thanothers, he reasons.
4
The report rom the NCRP – which counts the TidesFoundation, Woods Fund o Chicago, Catholic Campaignor Human Development (CCHD), and ACORNaliate Project Vote among its members
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– is no merepie-in-the-sky proposal. Already, there are groups thatnot only want to put its ideas into eect but that wantthe government to enorce them in detail.For instance, in Caliornia a group called the GreenliningInstitute argues that any grants made by a philanthropicoundation should be subject to government oversightbecause oundation assets are tax-exempt and, thereore,“public.” The public is “subsidizing” the oundation by nottaxing its endowment, so the government has the right todecide whether the oundation is making the right kindo charitable contributions.Using this argument, in 2008 Greenlining persuadeda Caliornia state legislator to introduce a bill (AB 624)that would require large oundations to collect andpublicly disclose the extent to which their grant-makingserved minority-led and community-based groups. SomeCaliornia-based oundations protested that it wassucient that current law already required private grant-makers to give a specic percentage o their endowmentto registered charities. But other oundations bowed toGreenlining’s demands. As the price o withdrawing thelegislation, nine major oundations promised to providea uller public accounting o their grant-making and a-rmed their commitment to “diversity” in grant-making.They pledged a reported $30 million in additional grantsto minority-led and community-based groups.
A “Greenlining” Initiative in Florida
Now a Florida group is trying to replicate Greenlining’sCaliornia success in the Sunshine State. Greenliningaccomplished its nancial eat by threatening to havethe Caliornia Legislature enact a law orcing charitableoundations to publicly disclose the race, gender, andethnicity o their board trustees and the boards and sta o their nonprot grant recipients.
6
It’s but a stone’s throwrom mandatory race, gender, and ethnicity reporting togovernment directives on how charities should distributetheir unds.Whatever the motivations o those pushing theGreenlining-backed legislation, Caliornia-based ounda-tions didn’t want to take the chance that their ability tomake their own decisions could be taken away rom them.Rather than have to comply with an arbitrary law thatcould open the door to more government intererencein their aairs, the aected Caliornia oundationspromised to do better and gave Greenlining money to goaway. The
Wall Street Journal
’s editorial board describedthe Greenlining approach as “racial extortion” and a“race-baiting money grab.”
7
O course, caving in to pressure groups never placatesthem, and now this Caliornia-style attempt at interer-ence with philanthropy has arrived in Florida. Indeed,it’s now air to ask whether race and gender quotas orcharitable oundations and nonprots could be in theworks or the Sunshine State. The answer is potentially“Yes.”At least that’s the plan o the Florida Minority Com-munity Reinvestment Coalition (FMCRC). The group’sboard chairman and public ace is Al Pina, a transplantedArizonan who describes himsel as “a community rein-vestment mercenary.”
8
Mr. Pina, who boasts about his orceul techniques,seemingly has convinced himsel that he is a David ght-ing nancial Goliaths. “I was inspired by Robert Kennedyand how he stood up to the maa. He stood up to thebullies. I like anybody who stands up to bullies.”
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Mr. Pina believes that people o a specic race take bet-ter care o other members o the same race than outsiders.“No one can convince me that United Way providesbetter service directly to minorities than a minority-ledorganization,” he said. “We’re in the trenches. There isno way that [non-minorities] can connect and have moretraction and eect than organizations with leaders wholive in those communities day in and day out.”
10
The FMCRC describes its “mission” as ollows:
“Our goal is to empower low-income and minoritycommunities by attracting investments or health,education, home ownership, employment, andminority entrepreneurship using a holistic advocacyapproach. FMCRC is being developed in partnershipwith the Greenlining Institute o Caliornia.” (www.greenlining.org)
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The group describes its “purpose” as ollows:
“To identiy market-based growth opportunities inminority communities through research, education,policy development/advocacy and programs that willlead to a paradigm shit in the approach o inner-city
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community economic development or minoritycommunities o Florida.”
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A 501(c)(3) nonproit organization, FMCRC hasreceived $210,000 rom banks’ charitable oundationssince 2005. Specically, FMCRC accepted grants romCitigroup Foundation ($100,000), Wells Fargo Founda-tion ($100,000), and Wachovia Foundation ($10,000).
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Strangely, in its 2007 tax return led with the InternalRevenue Service, the tax-exempt nonproit lists itsheadquarters as an address in Colts Neck, New Jersey.
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The FMCRC wants oundation grants to be allocatedaccording to a sort o spoils system. The group draws inspira-tion rom the Greenlining Institute, its larger and betterestablished counterpart. Orson Aguilar, associate directoro the Greenlining Institute, explained during a radiointerview how such a redistribution system might work:
“We think that oundations have a lot o power insociety today. So what we want is to make sure thatoundation dollars are reaching our communities sothat we can be active decision-makers, discussion-makers, that we can be voters, that we can infuencethe democracy that we live in. So that’s basicallywhat we’re asking or, equal opportunities, equaldollar amounts.”
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According to the FMCRC, there is a “gap” inoundation philanthropy in Florida “that not onlyaects minority amilies and communities, but all o Florida.” Mr. Pina made this statement in the preaceto “Philanthropic Investment in the Sunshine State,”a December 2008 report that FMCRC commissionedits much larger ideological counterpart, the Berkeley,Caliornia-based Greenlining Institute, to prepare.Among the report’s assertions:
“With the emerging global economy, resourceswill become more limited in scope and nature orminority communities and businesses. Florida is astate in which minority nonprots are decreasingservices, due to budget shortalls, when such servicesare needed to be expanded to meet greater socialneed. This in turn allows poverty, unemployment,crime and drug abuse to take a greater hold onunderserved minority communities in Florida.”
Although it would probably come as news to philanthro-pies across America that they’ve somehow orgotten to tryto reduce poverty and crime, Mr. Pina evidently disagrees,asserting that “[]oundations must play a leadership rolein reversing poverty and crime in our communities.”
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“One o the most pressing challenges currently acingthe oundation sector is the need to actor diversity intoits impact metrics and giving priorities,” the Greenliningreport asserts.
It continues:
“As the population o our country becomes morediverse, it is important that minority-led nonprotsthrive in order to create empowerment or minoritycommunities. Foundations play a critical role in thesuccess o these organizations; by investing in themoundations would give these organizations moreopportunity to grow and ulll their missions.”
A table on page 4 o the report shows Florida’s 10 largestoundations (as measured by assets) and the percentageo grants given by those oundations to minority-ledorganizations. And here’s the rub. While most Americanswould think “minority-led” means something along thelines o “headed or run by a member o a minority group,”the study’s authors – a Greenlining “summer researchassociate” and two interns, according to page 6 -- oer adenition seemingly calculated to skew the results.Greenlining’s dicult-to-meet standard holds that “aminority-led organization” is one in which
• 50 percent or more of the organization’s staff consists
o minorities,
• 50 percent or more of the organization’s board of
directors consists o minorities, and
• The mission and programs of the organization are
aimed predominantly towards communities o color.It’s worth noting that o the 10 oundations examinedin the study, only one, the Jessie Ball DuPont Fund,agreed to participate in the study and so the data setsthroughout the brie report are riddled with holes. Notone o the 10 philanthropies is deemed to be a bona de“minority-led organization.” Presumably, inormationon grant recipients is easier to nd because the reportindicates that six o the philanthropies gave money to“minority-led organizations.”The question o whether these private grant-makers
help minorities isn’t even examined in the report. Theonly thing that matters to the Greenlining Institute is therace and ethnicity o the oundation’s sta, directors, andgrant recipients.Greenlining appears to have begun with preconceived
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The Future of Philanthropy in Florida, By Matthew Vadum
This is The Future of Philanthropy in Florida, by Matthew Vadum. Vadum is Senior Editor at Capital Research Center and Adjunct Scholar at James Madison Institute. It concerns the "ACORNization" of philanthropy.
Matthew Vadum (matthewvadum.com) is… (More)
Matthew Vadum (matthewvadum.com) is… (More)
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