LA Philanthropy Watch

On April 22, 2010 Arizona Governor Jan Brewer signed into law already-controversial legislation (described in the Los Angeles Times as “the toughest law against illegal immigration in the country”), which opponents decried as an inevitable step toward racial profiling. ["Arizona's immigration law may spur a showdown," by Nicholas Riccardi, Los Angeles Times, April 23, 2010 ]  The law requires police in Arizona to check the immigration status of anyone they lawfully stop, if they believe s/he may be in the country illegally; it requires individuals to produce proof of citizenship or legal immigration status.

By the end of April, calls for boycotts of Arizona businesses had begun.  On April 26, Darrell Steinberg, the leader of the California State Senate, suggested that the state consider a boycott and asked Governor Schwarzenegger for a list of Arizona firms (and government agencies) that do business with the State of California. ["Steinberg says California should consider boycotting Arizona in protest of immigration law" by Patrick McGreevy, LAT, April 27, 2010]

By the next day, Los Angeles City Council members had weighed in. ["Calls to boycott Arizona grow over new immigration law," by Anna Gorman and Nicholas Ricardi, LAT, April 28, 2010]  On May 12, the Los Angeles City Council passed a law banning most city travel to Arizona and future contracts with Arizona businesses.  San Francisco passed a similar ban the same week. ["L.A. council bans most official travel to Arizona," by Phil Willon, LAT, May 13, 2010]

At the beginning of June, the County of Los Angeles suspended funding for travel to Arizona and initiated a study of how to terminate contracts with Arizona companies and divest of Arizona state and municipal bonds by the country’s pension fund.  Los Angeles Unified School District passed a resolution condemning the law, recommending additional steps to sever economic ties to Arizona, and asking Superintendent Ramon C. Cortines to make the study of the law part of the school curriculum.  ["L.A. County votes to boycott Arizona over immigration law," by Garrett Therolf and Howard Blume, LAT, June 2, 2010]

Many other cities and public agencies, across California and the nation, have proposed boycotts or condemned the law.  The legislation, however controversial, maintains popular support, even in California ["Voters split on Arizona law," by Seema Mahta, LAT, May 31, 2010], and some ‘rule of law’ cities in California and nationally have endorsed the law.  [See “Who is boycotting Arizona?"]  Several states may follow Arizona’s lead. ["Many legislators aim to copy Ariz. immigration law," by John Miller, AP, May 26, 2010]

A number of immigrant rights and civil rights groups, including two based in Los Angeles – the National Immigration Law Center and the Asian Pacific American Legal Center, have mounted legal challenges to the law. [See June 5, 2010 press release, "SB 1070 | ARIZONA: NICL and Civil Rights Groups Ask Court to Block Implementation of Arizona's Racial Profiling Law During Legal Battle."]

This week, Robert K. Ross, MD, president and CEO of The California Endowment, and Ruth Wernig, chief investment officer, sent a letter advising six Arizona companies that the foundation was considering divestment of Arizona assets.

As one of the nation’s largest foundations (and the second largest foundation in Los Angeles, behind the Getty Trust), this news may be expected to send ripples across the nonprofit sector.

According to the Chronicle of Philanthropy (”Calif. Nonprofit Group Rethinks Its Investments in Light of Ariz. Immigration Law,” June 30, 2010), which featured this story yesterday, the California Endowment has $5.2 million invested in Arizona.

The statement – an extended version of the letter on the president’s blog, “Bob’s Blog: Arizona’s Immigration Law is Un-American” – acknowledges the need for immigration reform, but condemns the Arizona law as unjust.  While there is an emphasis on the fiduciary responsibilities to the foundation’s investment portfolio, clearly that is not where the concerns begin.

“The very heart of The California Endowment’s mission requires that we work in the underserved communities in our state and that we do so with respect for the dignity of those communities and the people in them.

Time and again, we find the health of the people in those communities damaged by the lack of the most basic building blocks of health: access to clean drinking water, clean air to breathe, the ability to buy fresh fruits and vegetables, safe places to exercise. Time and again, we find that the lack of those basics cause people in those underserved communities to be sicker and to die sooner. Time and again, we feel called to support those communities when they decide they must work to change the places they live for the better.”

Dr. Ross suggests that law will lead to racial profiling, which stands in opposition to the California Endowment’s “core mission and values.”  That is the principle indictment of the law, which reveals a stark contrast:  “So the question is: how can we work hard every day to help Californians eliminate the inequalities they face…using money we made from supporting inequality?”

The statement suggests that “a wave of divestments” will send a powerful message.  By looking critically at its investment portfolio, the California Endowment offers another way to support underserved communities across the state.  Furthermore, as that wave increases in velocity, and consequently Arizona businesses become increasingly vulnerable, fiduciary considerations offer an additional reason to divest.

It remains to be seen whether other foundations follow the lead of the California Endowment.

The companies that received the foundation’s letter are: PetSmart (pet supplies retailer), Grand Canyon Education Inc. (which owns the for-profit Grand Canyon University), Pinnacle West Capital Corporation (electricity and energy-related products), Republic Services Inc. (waste management and garbage collection), Avnet (electronic products and services) – all of Phoenix – and Microchip Technology (microcontroller and analog semiconductors) of Chandler.

Editor’s note: My thanks to Jeffrey Okey of the California Endowment for information about this issue.

A November 2009 report, “Beyond California: States in Peril,” by the Pew Center on the States concludes, “California’s financial problems are in a league of their own. But the same pressures that drove the Golden State toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country.”

Such fiscal crises have huge spill-over effects.  Peter Manzo, in a post at the Stanford Social Innovation Review blog,”The High Cost of Playing It Safe,” considers children’s health coverage, which is threatened by the State of California’s fiscal meltdown.  In this dire environment, Manzo suggests that foundations and nonprofits should become more engaged in public policy debates – seeking to influence legislative decisions and to alter the broader structural and political context within which legislatures act.

“Foundations and nonprofit cause organizations need to carefully consider the relationship between their focused strategies and the merits of pushing for long-term change in the broader policy environment. Concerns about dry issues like governance reform or the mechanics of budgeting and accounting can seem far afield from a strategic program focus on, for example, reducing childhood obesity or improving early childhood development.  But the current California budget debacle shows that even the best designed and executed privately-funded initiatives can be washed away quickly by steep cuts to public programs.”

Manzo cites five California foundations – three from the Bay Area (the David and Lucile Packard Foundation, the William & Flora Hewlett Foundation, and the Evelyn and Walter Haas, Jr. Fund) and two from Los Angeles (the James Irvine Foundation and the California Endowment) – that have jumped into the fray to fund California Forward.

“California Forward’s mission is to improve the quality of life for all Californians by creating more responsive, representative and cost-effective government.” Four civic organizations – California Common Cause, Center for Governmental Studies, New California Network and the Commonwealth Club of California’s Voices of Reform Project – have been enlisted to “make our government work again.”

Whatever the prospects for achieving fundamental reform (in a season when hope and change may be endangered concepts), these civic groups and their funders are certainly not standing on the sidelines.

Peter Manzo, President and CEO of United Ways of California, is co-author of the 2005 report, Southern California’s Nonprofit Sector, which is featured on LA Philanthropy Watch’s Nonprofit Sector – National resources page.

Click on the image – which poses the question, “How does your state compare with California?” – for a full-size view.

Give & Take alerted me to the post at Stanford Social Innovation Review last week; Kevin Drum, to the Pew report last fall.

Dr. Hahn Cao Yu, Vice President of Social Policy Research Associates (SPR) of Oakland, spoke to the monthly luncheon of the Greater Los Angeles Chapter of the Association of Fundraising Professionals on Tuesday.  SPR worked closely with the California Endowment to prepare a Foundation Diversity Policies and Practices Toolkit, which was released at the annual conference of the Council on Foundations in May.

The Toolkit (available as a PDF online) is essentially a concise how-to manual for foundations to institutionalize their commitment to diversity, not only in grantmaking, but in other areas, such as governance, staffing, contracting, and investing.  Drawing on the work of 34 foundations and 11 additional philanthropic organizations, the Toolkit offers examples – such as policy statements, self-assessment forms, grant proposal instructions – of how to put diversity policies into practice.

Dr. Yu noted that the Toolkit was neither a manual of ‘best practices,’ nor a prescription for other organizations.  Foundations – and I will add: any nonprofit organizations – with a commitment to diversity in any of the areas mentioned above might find the experience of other foundations illustrated in this Toolkit useful.