Greenlining Series: Intruding on private charities

APRIL 19, 2010

This is the fourth part of a series produced by CalWatchdog and the Examiner regarding the Berkeley-based Greenlining Institute, a low-income housing advocacy group that critics say intimidates banks and helped cause the housing meltdown.

By TORI RICHARDS

Greenlining Institute’s biggest success may well be a controversial California bill that never actually became law.

Introduced in the California state Legislature, the “Foundation Diversity and Transparency Act,”  AB624, was Greenlining’s first weapon for extending the tactics it had used so effectively in the housing and banking arenas into the world of private philanthropy.

The proposal was designed to force private charities and foundations with assets of $250 million or more to report the ethnic makeup of their boards, and the recipients of contracts and grants they issued annually.

The bill would also have required other data – at one point even including the sexual orientation of board members and officers – having little or nothing to do with the purposes for which they were endowed.

The obvious next step after the data reporting was in place would have been mandatory diversity goals or quotas in hiring, contracts, and grant-making by the private philanthropies, thus effectively ceding control of their billions of dollars in assets from their founders and officers to state bureaucrats and allied activist groups like Greenlining.

The costs to grant-givers and receivers of administering and complying with the measure was estimated by the Pacific Research Institute (CalWatchdog’s parent organization) at $47.5 million.

After the bill was approved by the lower house of the California Legislature in January 2008, a coalition of 10 major California foundations entered into an agreement with Greenlining to re-direct millions of dollars in contracts and grants as suggested by the institute.

In return, sponsor Assemblyman Joe Coto, a San Jose Democrat, agreed to withdraw the proposal, thus preventing it from becoming a California law.

The coalition’s members included the William and Flora Hewlett Foundation, Annenberg Foundation, David and Lucile Packard Foundation, Ahmanson Foundation, the Weingart Foundation, the California Endowment, James Irvine Foundation, the UniHealth Foundation, Ralph M. Parsons Foundation and the California Wellness Foundation,

Even so, a former member of the coalition, the Koret Foundation, balked at the compromise. Richard Atkinson, a member of Koret’s board and the president emeritus of the University of California, condemned AB624 and characterized it as “an intrusive attempt to redirect the distribution of charitable dollars away from legitimate non-profits” to those “anointed as more worthy by the state.”

In the nearly three years since, the remaining nine California foundations have donated $30 million to impoverished areas as a way to placate Greenlining and Coto.

When AB624 was approved by California’s Assembly, it sparked a protest from a suddenly very worried charitable community.

“The proposed bill would not advance governance of foundations,” the California State Bar Association wrote on its Web site. “On the contrary, the bill is unconstitutionally and impermissibly intrusive at many levels…”

Deneen Borelli was blunter in a blog for the National Center for Public Policy Research. “The Greenlining Institute agenda is clear — use the race card to hijack the power of the state and force charities to fund liberal organizations under the guise of helping minorities.”

Borelli went on to encapsulate the fears of protesting charities:

“Like all government meddling, AB624 will unleash negative consequences.  Foundations will be burdened with additional compliance costs. Researching the race, sex and sexual preferences of grant recipients would be time-consuming and waste money better spent on serving the goals of the foundation. Collecting and disclosing such personal information also is a violation of privacy.

“Implementation of AB624 may also deter individuals and companies from establishing philanthropic foundations in the first place. The Greenlining goal is to ‘shame’ foundations. Why establish a foundation with advance knowledge that it will be harassed if it doesn’t give away its money in the prescribed, politically-correct manner?”

The Wall Street Journal criticized the measure in an oped entitled, “Diversity targets for philanthropists are absurd.” The Capital Research Center described Greenlining as “shakedown artists” and a “growing menace.”

But the three-year agreement is almost at an end. Greenlining writes on its Web site: “We will work with other foundations, to engage in similar efforts with a goal of replicating the $30 million figure in one year.”

In other words, Greenlining will be back for more, likely much more.