American philanthropy is the envy of the world. Since colonial times, when Benjamin Franklins Junto Society, a protothink tank of public-minded Philadelphia citizens, developed volunteer fire departments and a lending library, Americans have evolved a unique civic culture of giving and entrepreneurial problem solving. From 1995 to 2002, charitable donations as a percentage of GDP were nearly six times higher in the United States than in France and 14 times higher than in Germany. In 2007, Americas charitable giving amounted to $306 billion. No wonder that European universities and arts organizations look first to their American alumni and patrons for support when their government funding dries up.
Yet American generosity is under fire. A growing number of activists and politicians argue that foundations should meet diversity targets in their giving and on their staffs. If foundations fail to diversify voluntarily, threaten the race, ethnicity, and gender enforcers, they risk legislation requiring them to do so. In other words, the diversity police, having helped bring on the subprime meltdown through mortgage-lending quotas, now want to fix philanthropy. And instead of rebuffing this power grab, the leaders in the field have rolled over and played dead.
The idea that foundations should view the world through the trivializing lens of identity politics dates back to the 1980s, when some liberal foundations, including the Ford Foundation, started asking groups seeking grants to report the race and sex of their staff and board members. But today, politicians are getting into the act. This latest diversity push began in 2005, when the Greenlining Institute, a multiethnic advocacy group in Berkeley, started pumping out studies claiming that foundations were ignoring communities of color. (This despite the fact that in California, 39 percent of large foundations grants primarily benefit minorities, according to the Foundation Center, a respected research body.) Greenlinings definition of helping a community of color: bestowing foundation grants on a nonprofit whose staff and board are at least 50 percent minority. In other words, the Greenlining effort is purely a jobs racket. The racial composition of a nonprofits staff and board has exactly zero relation to whether it is actually helping minorities. Agronomists supported by the Rockefeller and Ford Foundations helped wipe out famine in Southeast Asia by developing high-yield cereal crops; pressure to diversify their labs would have hindered their research, not advanced it.
Greenlining went on to claim that big foundations were devoting only about 5 percent of their assets to the minority-led nonprofitsthe implication being that 5 percent was shockingly low. But no one knows how many nonprofits meet Greenlinings test of being minority-led. A 5 percent donation rate may actually overrepresent the number of nonprofits with 50-percent-minority boards and staffs.
Nevertheless, Greenlinings crusade leaped into the political arena. The California Assembly passed a bill in January 2008 that would have required all California foundations with assets of over $250 million to report not just the race and sex of their grantees board and staff members, but the race and sex of their own board and staff members as well. Note again the patent shakedown effort. The racial and sexual composition of a foundation is also irrelevant to whether it is helping minoritiesexcept, of course, for those quota hires who end up in cushy foundation jobs. In the late 1920s, Julius Rosenwald, an early president of Sears, Roebuck, used his foundation to build 5,000 schools for rural blacks in the South, somehow managing to do so without a 50-percent-minority board.
Connoisseurs of identity politics are probably wondering: But what about the lesbian, gay, bisexual, and transgendered (LGBT) community? Though gays occupy some of the highest income brackets in the country, the diversity enforcers have not forgotten them. The original California Assembly bill would have required foundations to itemize their staffs and boards sexual preferences; the final bill, however, required only that foundations out the staffs and boards of their grantees. Apparently, sexual privacy is fine for me but not for thee. Sexual orientation within foundations has since roared back as an imperative of the national diversity campaign, however.
The legislation was steaming its way through the California Senate when Californias ten largest foundations promised to pump hundreds of millions of dollars into minority-led nonprofits in exchange for the bills withdrawal. But the fuse had been lit. Similar diversity efforts have been spotted in various stages of development in Florida, Illinois, Michigan, New York, New Jersey, Texas, and Pennsylvania. And at the federal level, Xavier Becerra, a congressman from Los Angeles who serves on the powerful House Ways and Means committee, has warned foundations: If you dont police your own, youre going to be policed.
A foundation that remains colorblind in giving and hiring is suspect, even criminal, in other words. The congressman has threatened government intervention if foundations dont spend more on minorities and the poor; if he pushes on Capitol Hill for diversity mandates, he will likely count as allies his House Ways and Means colleagues Charles Rangel, John Conyers, and John Lewis.
Becerra argues that foundations assets, because they are tax-exempt, are virtually public money. Foundations are simply private managers of those public funds, in this view, and should be responsive to political pressure. Until now, Congress has required only that tax-deductible dollars go to educational, charitable, scientific, or religious purposes. Becerra, the Greenlining Institute, and other diversity advocates seek to constrict donors discretion in their charitable giving to supporting minority-run (or female- or LGBT-run) organizations or those that purport to serve the poor. But rather than rewriting the tax code to limit the tax deduction to these purposes, they have chosen a politically easier strategy: strong-arming foundations through the diversity-reporting requirements. These public-disclosure mandates put extra-legal pressure on foundations to obey the advocates definition of charity. Given how politically correct the philanthropic sector already is, foundations that do not have enough blacks on their boards or in their list of grants will rightly fear stigma. If stigma doesnt work, Becerra has signaled his willingness to take on the tax code itself.
The current economic downturn makes the prospect of shaking down foundations even more alluring. Federal and state governments, increasingly deprived of tax revenue, will likely cut back on their payments to nonprofits. Meanwhile, foundations made $43 billion in grants in 2007. As the Greenlining Institute put it: Just beyond the desert [of government funding] there is a rainforest flowing with philanthropic dollars.
What has been the foundation sectors response to this assault on philanthropic freedom? Total collapse. Its spokesmen have embraced the two false premises of the diversity movement: that the skin color and sexual profile of foundation and nonprofit personnel are meaningful performance indicators, and that philanthropic enterprises can be pigeonholed as benefiting this or that particular diverse group. Take Steve Gunderson, head of the Council on Foundations, the leading philanthropic lobbying organization. Gundersons only disagreement with the diversity agenda is that, in his view, it should be driven from within the sector voluntarily, rather than legislated from without.
Apart from that quibble, however, Gunderson is so committed to color-coding foundation personnel that he actually worries about the intergenerational wealth transfer expected as baby boomers retire in the coming decades. That wealth transfer, estimated in the trillions of dollars before the stock-market collapse, has the potential to create thousands of new foundations during or after the donors lifetimes. So whats not to like? Well, it turns out that most of this new philanthropic capital will come from heartland America, meaning that the donors will be overwhelmingly white. Frets Gunderson: We can make great strides in diversity, but if rural America transfers wealth into philanthropy, our data will be worse than today.
Its hard to get your mind around this. The foundation sectors leader actually sees a downside to potentially explosive foundation growth simply because the donors are the wrong color. Lets say that an entrepreneurial Nebraska family with a passion for astronomy wants to start a family foundation to support an observatory and to provide astronomy scholarships. This just wont do, in Gundersons opinion. Never mind that race is irrelevant to the donors passion for science, or that they would like to run their small foundation themselves, so as to foster family unity across generations. Gunderson suggests that such philanthropic families create an advisory council to bring in different voices . . . that [will help them] address the hopes and aspirations within the broader community. Apparently, Gunderson shares the diversity advocates view that philanthropists are beholden to the broader communityas defined by the advocates, of courserather than being independent actors pursuing their own vision of the public good. Tell potential donors that they are merely agents of a politically defined interest group and that they must create sinecures to diversify their racial and sexual profile, however, and you will see foundation giving dry up.
The Council on Foundations is hardly the only mainstream institution to have ratified the diversity agenda. The Foundation Center is developing a survey instrument designed to test whether a foundations diversity profilerace, gender, and sexual orientationpredicts diversity grant-making. The new, foundation-funded Diversity in Philanthropy Project is spending approximately $2.2 million promoting hiring quotas at foundations, in order to make diversity an essential consideration in funders day-to-day strategic decisions and actions. Just to put that number in perspective, it recently cost $1 million for the Genome Sequencing Center at Washington University to decode all the genes of a leukemia victim. Which enterprise is of greater value to humanity? The smart money is on the cancer researchbut according to the Diversity in Philanthropy Project, if the genome lab didnt contain underrepresented minorities, funders should have thought twice about supporting it.
Heres what the foundations should have said when the diversity police first came knocking: Are you kidding? You want diversity? We are it.
Here is a tour, highly truncated, of Manhattans philanthropic world. Within the radius of just a few blocks this past December 2, you could have learned about early-nineteenth-century New York at a perfectly preserved stone inn built by John Adamss daughter on what is now East 61st Street, then attended a debate on whether George W. Bush was the worst president in 50 years. If the debate made you ill, you could have consulted doctors working on the cutting edge of medical science at Rockefeller University, where the debate was located. A few blocks west, you could have further recuperated by basking in the human splendor of the Metropolitan Museum of Art or the natural splendor of Central Park.
Across the park, you could have looked into the universe at the American Museum of Natural Historys planetarium. Fifteen blocks south, city children enrolled in the Metropolitan Operas Urban Voices choral program might have been visiting Lincoln Center to see where their newfound music skills could lead them one day. If you continued traveling south to the glorious main reading room of the New York Public Library, you could have had books containing the riches of knowledge brought to you as though you were a Renaissance prince. At Trinity Church on Wall Street, where the Daughters of the American Revolution lovingly maintain fresh flags at the gravesites of Revolutionary soldiers, you could have honored the sacrifices made by our forebears. And across the harbor, at Ellis Islands newly restored museum, you could have traced the path of Americas striving immigrants.
Those are just a small fraction of the physical institutions that philanthropy supports in New York. Less visible is the variegated intellectual work in the city underwritten by donors, all part of the thriving battle of ideas that contributes to American dynamism. The Open Society Institute argues, among other things, for shortening prison sentences and overturning detention policies in the war on terror, while the Manhattan Institute, City Journals publisher, promotes free markets and seeks to restore humanistic learning on college campuses. The New Criterion defends intellectual and artistic standards against mountebanks and poseurs, while scholars supported by the Gilder Lehrman Institute of American History research slave narratives and trace the origins of Americas commercial culture.
Now, which of these institutions is not minority-serving? Does the Greenlining Institute dare to say that only white people benefit from the expansion of knowledge, the cultivation of beauty, and the careful preservation of the past? The Council on Foundations should advise donors, when the diversity bean-counting forms arrive in the mail, to catalog every grant thus: minority-serving, whether it supports an exhibition of John Singer Sargents Venice watercolors or the study of kidney disease. The diversity mongers apparently know in advance that a child from Harlem could not possibly have his life changed by an encounter with J. S. Bach or pictures from the Hubble telescope. They would hive minorities and the poor off from the rest of humanity and declare that philanthropic endeavors open to the whole of mankind have no relevance to these putative victim groups.
What Helps Fight Poverty?
Showing the usual market instinct of advocates and politicians, the quota cops seek to force charitable dollars into the least effective form of philanthropy. When not promoting a racial spoils system, the Greenlining Institute and ideological allies such as the National Committee for Responsive Philanthropy browbeat donors about their alleged failure to give money to the poor. Conventional antipoverty work is underfunded, they say. To the contrary, almost a third of all charitable donations go to traditional antipoverty groups. The problem lies not in the input, but rather the output: few, if any, of those organizations have shown results. This May, for example, the United Ways president acknowledged that its social-services programs had produced no measurable positive impact, despite millions in investments.
Many of these standard antipoverty efforts fail because they are blind to the behavioral aspect of poverty; they treat the multigenerational poor as victims of unjust forces rather than as agents of their own fates. But even if a program aims directly to change individual behavior, it, too, faces long odds. Capitalism is unmatched as a force of social transformation because business success depends on appealing to peoples desires and wants. The washing machine probably did as much for womens liberation in the past century as a thousand National Organizations for Women ever could. Persuading someone to do his homework, stay away from gangs and drugs, or exercise sexual restraint, on the other hand, may require selling him on behavior contrary to his own inclinations. Even conservative social programs have had a hard time altering peoples choices. Welfare reform nudged millions of single mothers into the workforce, but it has had almost no effect on illegitimacy ratesthe second of its two goals. Reviving the marriage norm among the poor is the prerequisite to decreasing poverty, but no one knows how to do it.
It is better, of course, for private initiatives to address seemingly intractable social problems than for taxpayer-funded ones to make the attempt, given their likely failure. The grandiose rhetoric attached to social-uplift ventures may be laughableWere in the business of defeating poverty, Robin Hood Foundation founder Paul Tudor Jones has saidbut perhaps such delusions of omnipotence are necessary to motivate benefactors over the long haul. Nevertheless, some humility regarding aims and methods is in order. You may be able to change what you dont understand, but not necessarily in the ways you were hoping for. A recent program to decrease domestic violence among Hispanic men ended up increasing the participants rate of violence, because the men reinforced one anothers norms. The Gates Foundation is giving women in Malawi their own secure banking accounts that their husbands cant access. A nice feminist idea, but does the Gates Foundation know how this intervention in a patriarchal society will play out? We will have to wait and see.
Philanthropists hoping to uplift the poor might study the philosophy of Andrew Carnegie: create institutions that will allow the strivers to better themselves by their own initiative. Childrens programs should treat children as children, not as clients. Those youth organizations that have survived the test of time, such as the Boy Scouts and the Boys and Girls Clubs, understand childrens need for heroism, aspiration, and wonder. There is no need to reinvent the wheel; those two programs deserve support and probably stand a better chance of helping children than more recent, cutting-edge, and highly publicized efforts like the Harlem Childrens Zone.
Heather Mac Donald
The Greenliners response is predictable: Oh, come on. We know what a program for minorities looks like, and support for scholarship and beautyor what the Greenlining Institute calls pet causes that serve the wealthy and eliteis not it.
Oh, really? If the diversity monitors have so keen a sense for what helps minorities and the poor, why have they been completely blind to the most powerful nonprofit program for poverty-stricken New York neighborhoods in the citys history? Some 14,000 New Yorkersmostly poor, mostly black and Hispanicare alive today who would have been killed had New Yorks homicide rate remained at its 1993 level. That homicide rate dropped 70 percent over the next decade, thanks to a revolution in policing begun under New York Police Commissioner William Bratton and Mayor Rudolph Giuliani.
Yet as philanthropy was underwriting the intellectual groundwork for that revolution, the Greenliners would have seen only a bunch of white people playing with ideas. In 1979, Nathan Glazer argued in The Public Interest that a citys inability to control minor crimes like graffiti undermined citizen confidence in urban government. George Kelling and James Q. Wilson expanded on that idea three years later in a now-famous article in The Atlantic Monthly urging police departments to return to their traditional role of maintaining public order, what Kelling and Wilson called Broken Windows policing. The Atlantic article also criticized the then-dominant policing model, in which officers in patrol cars merely responded to crime incidents broadcast over their radios. Kelling had begun to question that dominant policing paradigm in his own foundation-funded research in the 1970s and early 1980s.
Broken Windows policing became a regular topic at a series of discussions on policing from 1985 to 1992 at the Kennedy School of Government, attended by Kelling and by Bratton, then head of Bostons Metropolitan Police. The so-called Executive Sessions, funded by the Mott Foundation and the National Institute of Justice, created the impetus for Bratton himself to rethink the reactive policing model. Earlier Ford and Mott Foundation demonstration projects in assertive policing also informed discussions at the Executive Sessions.
The public-order idea was already entering the urban arena in the 1980s through business improvement districts, as Kelling describes in a forthcoming paper. In the early 1990s, mayoral candidate Rudolph Giuliani learned at the Manhattan Institute how public squalor and petty crime had contributed to the decline of New York City. The Broken Windows concept reached its fullest expression in the New York Police Department after Giuliani won office in 1993 and appointed Bratton his police commissioner. Bratton combined the concept with everything he had learned about aggressive, accountable policing to produce the longest, steepest drop in crime in the nations history.
No one could have foreseen what the ultimate outcome of the ideas leading up to New Yorks crime conquest would be, not even the philanthropists who supported them. Yet that intellectual labor has done more for minority uplift than New Yorks multibillion-dollar social-services apparatus ever hasnot just by saving lives but by creating the irreducible condition for economic development in the inner city: public safety.
The diversity campaign is oblivious to the complex power of ideas in the world. Those who would direct philanthropy into preconceived channels think that they already know the answers to the worlds problems and need only to appropriate the funding for those answers. But no one can predict how ideas will play out in practice or who will be their beneficiaries. The public good is best served by giving maximum freedom to the creative spirit.
I have searched for some neutral principle that would delimit the proper ends of philanthropy and have found only this: do what you love. If there is something that has inspired your passion, teach the rest of us to see its beauty, whether its the unknown treasure trove of Vivaldi operas or the wild forms of Rococo silversmith Juste-Aurèle Meissonnier. Dont allow the self-appointed guardians of the poor to tell you that your enthusiasms are the artifacts of social and economic self-interest. They are not; they arise from Eros and the pursuit of the ideal.
The humblest object of devotion is as precious as the grandest ambition. The nineteenth-century stone inn that we visited on our philanthropic tour is maintained by the Colonial Dames of America, a group of women tracing their roots to the colonial period who support American scholarship and historical preservation. In 2001, Chapter XIII of the Dames restored the shutters on the oldest brick house in Kansas City. Would Xavier Becerra and the Greenlining Institute have the temerity to disparage this little act of love? Such attention to homely detail is what binds communities together.
If the diversity enforcers really believe that philanthropy should be color- or sex-coded, heres a suggestion: go out, earn some money yourself, and show the world how philanthropy should be done. And in the meantime, dont imply that the world has too much beauty and knowledge already. It doesnt. It can always use more.
Heather Mac Donald is a contributing editor of City Journal and the John M. Olin Fellow at the Manhattan Institute. Her article is adapted from her William E. Simon Lecture on Philanthropy and Social Entrepreneurship, supported by the William E. Simon Foundation.