Would a community foundation comply with a wealthy donor’s recommendation to award a donor-advised grant to a charity that encourages review of national immigration policies? Probably.
What if it was discovered later that same charity promoted white supremacist ideologies? Would the choice to award the donor-advised grant be the same?
This scenario is not too far from being factual. A recent Nonprofit Quarterly article offered examples where donors were creating conflicts for community foundations because donor-advised grants were not conforming to the foundation’s values.
There are approximately 750 community foundations in the United States. They manage almost $50 billion in assets and annually award over $4 billion in grants. They are significant economic forces. Nevertheless, community foundations are not only chartered to build community resources, but to provide leadership and inspire hope in the communities they help. Their actions must be beyond reproach because their missions profess the highest ideals for humanity. A community foundation’s effectiveness is diminished if a conflict of interest or indulgence of passive racism creeps into its decision-making.
People engaged in active racism advocate the subjugation of a targeted group. It manifests itself in numerous ways, for example, public racial slurs, hate crimes or intentional profiling.
Passive racism is more insidious and pervasive. It is a conscious or unconscious belief that contributes to the perpetuation of racism, violence or oppression. It can be demonstrated by biased behavior, lack of empathy towards another group’s hardships and, in the case of philanthropy, awarding foundation grants to organizations advocating white supremacy or discriminatory principles.
In my long career, I believe, passive racism was ratified over my objection when the board unanimously favored the biases of a wealthy donor instead of supporting the advancement of all races. As a chief executive, a lesson to be learned by these experiences was whether in the end there was fidelity to board members or the individuals the organization was entrusted to serve.
As public-service organizations, community foundations must be mindful it is the foundation’s values that are attached to its grants not the donor’s.
Unfortunately, American community foundations typically use only one criterion to determine the eligibility of a charity receiving a donor-advised grant: does the potential grantee have IRS 501(c)3 status, which qualifies it as a charity eligible for grants from foundations. Even if the grant is legally permissible, community foundations should no longer justify awarding grants based solely on this single standard. Its investigative processes must guarantee that potential grantees are engaged in improving every life regardless of race, gender, age, orientation, etc. If community foundations lack commitment toward this goal, their missions will be compromised and they could be viewed as accomplices to passive racism.
In the written donor-advised fund agreement, it should be clear that any recommendation for a grant from a fund is advisory only and that ultimate authority to direct grants from the fund is vested solely with the board. Therefore, the board can legally deny a grant request.
In an atmosphere of mutual trust, community foundations can host community events to counter racial hatred, fund research with universities to identify solutions to racism and co-fund educational programs for children, religious organizations and governmental agencies.
Internally, community foundations can refine their orientation materials for donors, volunteers and staff so it is clear what active and passive racism is and when grants will be denied.
It would be better to say goodbye to wealthy donors, who attempt to use foundations as conduits for racist agendas. Conversely, potential donors to community foundations should be encouraged to request and review a foundation’s written guidelines that guarantee grants are not being awarded to charities engaged in nor endorse discriminatory practices.
We should agree our diversity encourages a greater talent pool and contributes to our beauty. By falling in love with all of humanity, we can collectively bring about amazing results. Community foundations, with its immense treasure, can be transformational players in accomplishing this goal – but their indulgence of passive racism means they are falling short.
Mark Hurtubise was president and CEO of Inland Northwest Community Foundation from 2005 – 2017.