Threats to Where You Give

Threats to an individual donor’s or foundation’s mission have typically emerged as calls to create a “hierarchy” of charities that would eliminate or reduce an individual’s tax deduction for certain gifts and would also disallow their being counted in private foundations’ qualifying distributions. In 2008, however, the Greenlining Institute (a policy and activist organization focused on racial and social justice) and California Assemblyman Joe Coto attempted to use the concepts of “disclosure” and “transparency” to channel foundation grantmaking to a limited and prescribed group of charities when the Assembly passed AB 624.

The bill would have required disclosure of private foundation board, staff, and grantee demographics, including the racial and gender composition; the number of grants and grant dollars awarded to organizations specifically serving specified communities of ethnic minorities, lesbian, gay, bisexual, and transgender people, disabled people, and other underrepresented communities; the number of grants and grant dollars awarded to organizations where 50% or more of the board members or staff are ethnic minorities; and the number of grants and grant dollars awarded to predominantly low-income communities.

In response, The Philanthropy Roundtable joined forces with several California foundations and other organizations to issue public statements opposing AB 624. The Roundtable noted that the legislation would pick winners and losers among the state’s charities, with the winners “serving a select few predetermined causes.” After an agreement was reached between the bill’s author and a coalition of California’s largest foundations, AB 624 was pulled from Senate consideration. Concerned that Greenlining was active in other states, the Roundtable members went on to secure legislation in Florida, Tennessee, and Texas that restricts those states from attempting to direct foundations’ charitable missions or demanding personal information about trustees, staff, and grantees.

Nonetheless, the hierarchy threat remains. Although the vast majority of philanthropic dollars still come from ordinary citizens, the number of middle-class donors is shrinking as concerns around “billionaire philanthropy” rise. In the midst of a two-pronged crisis spotlighting both health and race, there are renewed calls for private philanthropy to revamp its giving priorities and focus on “more democratically controlled charity organizations.” Little distinguishes these calls from comments made in 2008 by then-Congressman Xavier Becerra (now California Attorney General): “I start off with the proposition that if you’re getting a tax subsidy, another taxpayer must make up for what you’re not paying. That subsidy should serve a good purpose…. Statistics I’ve seen suggest that only one in 10 [charitable] dollars serves poor people or disadvantaged people. I have to wonder where the other nine dollars are going.” The Philanthropy Roundtable and allied organizations must continue to remind critics that donors are indeed giving to “good purposes” when they support K-12 and higher education, conservation, mental health, faith communities, arts and culture, workforce development, animal welfare, international relief, and so many other causes that serve the public good.