BILL ANALYSIS
AB 624
Page 1
ASSEMBLY THIRD READING
AB 624 (Coto)
As Amended January 23, 2008
Majority vote
JUDICIARY 7-1
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|Ayes:|Jones, Evans, Feuer, | | |
| |Krekorian, Laird, Levine, | | |
| |Lieber | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Keene | | |
| | | | |
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SUMMARY : Requires specified foundations to collect race,
gender-related and sexual orientation-related data and post this
information on their Web sites. Specifically, this bill :
1)Requires every private, corporate and public operating
foundation with assets over $250 million to collect, among
other things, the following information:
a) The racial, gender and sexual orientation composition of
its board of directors;
b) The racial, gender and sexual orientation composition of
the private foundation's staff;
c) The percentage of business contracts awarded to
businesses owned by specified groups;
d) The number of grants and percentage of grant dollars
awarded to organizations serving specified communities;
and,
e) The number of grants and percentage of grant dollars
awarded to organizations where the grantee's board of
directors and/or staff are members of specified groups.
2)Requires the collected racial, gender-specific and sexual
orientation-related information to be posted on the each
private foundation's Internet website and included in its
AB 624
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annual report.
FISCAL EFFECT : None
COMMENTS : In support of the bill, the author states, "This
legislation does not require foundations to invest in minority
communities, and it does not create racial quotas for
grant-making and employment. This legislation is a simple
attempt to get foundations to disclose key data related to
diversity on an annual basis." This bill follows a number of
studies that, the sponsor states, detail the lack of diversity
in foundation grantmaking and governance, including most
recently a 2006 report issued by The Greenlining Institute.
According to this report, the top 50 foundations in the United
States provided only 3% of their grant dollars to minority-led
organizations. This report also noted that only 10% of
foundation executive directors and board of directors are
minorities. ("Investing in a Diverse Democracy: Foundation
Giving to Minority-Led Nonprofits," The Greenlining Institute,
Fall 2006.)
This two-year bill has sparked many discussions over the last
year between the author and sponsor, The Greenlining Institute,
and the state's philanthropic community, regarding efforts to
improve diversity in grantmaking. Shortly after the bill was
introduced, the three regional associations of grantmakers in
California, representing approximately 400 institutional
foundations and giving programs, contacted the author to express
"serious concerns" about the legislation and to open a dialog
about how to strengthen philanthropic support for communities of
color. Two months later, the grantmakers submitted a letter
thanking the author for meeting with them and for asserting
leadership on the important issues raised by the bill. The
grantmakers further promised to undertake a number of steps to
address those issues, including hiring "a recognized independent
research institution ? to assess the current landscape of
nonprofits led by and/or serving people of color in California."
The grantmakers also offered to create an advisory committee of
community leaders to contribute input to the research initiative
and provide feedback and analysis of the findings and
recommendations." The grantmakers argued that this approach was
superior to the proposed bill, which they contended lacked
clarity and could have negative unintended consequences for
investments in communities of color as well as the growth of
AB 624
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philanthropy generally. In a January 3, 2008 letter to the
Assembly Judiciary Committee, the grantmakers wrote again to
applaud the author's commitment to diversity and his concerns
about ensuring that philanthropy better reflect the state's
changing demographics and emerging needs. The grantmakers
stated that they have made "significant progress" in their
efforts to address diversity issues and have an "ambitious work
plan" for the coming months that they believe far exceeds the
mandate of the bill.
As the bill moves forward, the author may wish to fine-tune the
data specified in the bill in order to address outstanding
issues, some of which are among the many thoughtful questions
raised by The Greenlining Institute, such as: specifying a date
by which fluctuating employment data is to be reported so as to
ensure consistency and comparability; the inclusion of gender
data only for the board and staff of foundations, rather than
grantees; the value of including other diversity
characteristics, such as disability age; the definition of
minority-led organization; whether data regarding the total
number of minority-led organizations should be collected in
order to allow the assessment of disparities in foundation
giving; whether a consistent definition of "minority-serving"
organization could be specified so as to avoid incompatible or
inaccurate reports; the difficulty of determining minority
ownership of businesses that are incorporated; whether a minimum
threshold value for reportable business contracts would be
helpful; and, whether the bill covers all foundations making
grants or otherwise doing business in California, or only those
with a principal place of business in the state or perhaps those
organized as California corporations.
Analysis Prepared by : Manuel Valencia / JUD. / (916) 319-2334
FN: 0003817