Volume 1, Number 21
As the title of Frank’s Weekly Rant suggests, I have a lot of things to complain about, but this week’s subject takes the cake.
You’d think that when people give of themselves and their financial resources to help people in need, the state would be happy. You’d be wrong.
Many families in California who have been blessed with great wealth have created foundations to share their good fortune with those less fortunate. These include the William and Flora Hewlett Foundation, the David and Lucille Packard Foundation, the Ahmanson Foundation, the Annenberg Foundation, the James Irvine Foundation, the Koret Foundation and the Weingarten Foundation. The founders of all of these foundations could have decided to pocket their financial largess and keep it for themselves, but instead they have given billions of dollars to charitable causes in our state. Each foundation has different priorities, but all have a common aim: to make our communities and state a better place to live and to help people in need. Some focus on the environment, others on health care, still others on education, helping families, ending poverty, etc. They are all good causes.
And for their good deeds, the state wants to punish them.
Assemblyman Joe Coto has authored AB 624 to attempt to force large foundations to give more money to minority organizations in California. It’s based on a baloney study conducted by the liberal Greenlining Institute in Berkeley that found that the 50 largest foundations gave only 3% of their grants to minority groups. As a first step to attacking that supposed problem, Coto’s legislation would require foundations with more than $250 million in assets to report to the state the racial makeup of their boards of directors and staff; the number and amount of grants made to minority groups, homosexual groups, disabled organizations and other “underrepresented communities;” the number and amount of grants to groups whose board or staff is comprised of least 50% minorities; and the number and amount of grants awarded to predominantly low-income communities. The legislation passed the state Assembly on a vote of 45-29. Not a single Republican voted for the bill, nor did a single Democrat have the courage to vote No.
This may be the single dumbest, most misguided piece of legislation I have ever seen in my 30 years in politics. Former University of California President Richard Atkinson called it, “an intrusive attempt to redirect the distribution of charitable dollars away from legitimate nonprofits" to others "anointed as more 'worthy' by the state" I couldn’t agree with him more.
What possible business is it of the State of California to tell a private foundation what groups they should support? Is the state now going to be directing which groups are favored and entitled to support, and discourage contributions to disfavored groups? It appears that it’s not enough for majority Democrats to be able to spend the $115 billion state budget on their priorities – they now want to be able to direct spending by private parties as well.
Yesterday the Sacramento Bee reported that a coalition of foundations has reached a voluntary agreement with Assemblyman Coto and the Greenlining Institute to develop a multi-million, multi-year plan to invest in minority communities. In exchange, Assemblyman Coto has agreed to drop his legislation.
I don’t blame the foundations for this agreement. The Coto legislation had already passed the Assembly and no doubt would have passed the Senate. Since nobody anymore can rely on Governor Schwarzenegger to do the right thing and veto bad legislation, the foundations probably rightly decided to cut their losses. Furthermore, they almost certainly already give far more to minority communities than would be called for by this agreement.
However, this episode is a sorry example of how far off track California’s legislature has gotten. Their actions discourage philanthropy and charitable giving. It will reduce enthusiasm to help people in need. It encourages the wealthy to keep their funds to themselves rather than donate to charitable foundations and be subjected to state action for not giving to favored groups.
Public support for the legislature is at an all time low. AB 624 is an example of why that is the case.
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I was on a panel yesterday of campaign experts at a conference hosted by the American Association of Political Consultants. Josh Howard of Capitol Weekly asked Chris Lehane, a former White House advisor to President Clinton, about the first piece of advice a consultant should give a client who was faced with a crisis. Chris made the point that it depended on the facts and whether it was a campaign crisis or a crisis while governing, and then went on to give a fine answer to the question. I couldn’t help but chuckle and wanted to grab the microphone when I heard the question. I would have answered, “If the crisis is in the White House my first piece of advice would be to get the dress dry cleaned.”
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