The legislation proposed by Assemblyman Joe Coto, D-San Jose, would require the state's largest philanthropic foundations to disclose the race, gender and sexual orientation of staff and board members.
He hopes such information will push foundations to redirect their giving to a more diverse group of recipients in a state where nonwhites are more than 57 percent of the population.
But foundations in Silicon Valley and across the country are fighting the bill, saying the reporting requirements are irrelevant, onerous, unnecessary and violate the privacy of those who dedicate their lives to help disadvantaged people regardless of race or ethnicity.
A harsher attack is under way in the right wing blogosphere where Coto a Mexican-American whose legislation often highlights disparities between whites and nonwhites has been branded a racist.
"To this Democrat Assemblyman your race is more important than your deeds," wrote conservative blogger Stephen Frank of Ventura County who says he has tens of thousands of readers. "Bigots are concerned about the color of your skin. Whether doing right or wrong, they care about color and sex first."
Coto did not return numerous phone messages and e-mails seeking comment on his legislation, AB624, which passed the Assembly on a partisan vote.
The measure is sponsored by the Berkeley-based Greenlining Institute, which wrote the first draft of Coto's legislation and conducted research that found only 3.6 percent of grant dollars from the nation's top 24 private foundations went to minority-led organizations in 2006.
Minority-led organizations were those defined as nonprofits where the total composition of staff and boards was at least 50 percent nonwhite.
The lack of funding, said Greenlining's executive director, John Gamboa, means minorities are being shut out from programs, services and critical public-policy discussions.
"Foundations work in the dark. There's no oversight; there's no reporting regulations on them," he said, "and because nobody knows what they're doing I think unintentional on their part they have excluded minority-led organizations."
Some of California's largest foundations William and Flora Hewlett Foundation, David and Lucile Packard Foundation, Gordon and Betty Moore Foundation, invested "practically no dollars" in minority-led organizations, Gamboa said.
Foundation executives say the controversial measure distorts the effect of philanthropy because, no matter which nonprofits receive grants, there's a high likelihood that members of minority groups will benefit from the money provided, given California's demographics and the issues being funded.
"Race, gender and sexual orientation are obviously important identifiers in California and the U.S. and elsewhere, but they are only a part of the important issues that foundations play a role in addressing," said Paul Brest, president of the William and Flora Hewlett Foundation in Menlo Park, which awarded nearly $300 million in 2006.
Brest, whose foundation is known for funding projects in developing countries, would not disclose the ethnic and racial makeup of his staff or board, saying he did not know that information.
Neither would he confirm nor deny Gamboa's assertion that, according to the Greenlining study, Hewlett gave just .94 percent of its grants to minority-based organizations.
The Geenlining study also revealed that only 10 percent of foundation executive directors and board members belonged to a minority group.
Coto's measure would require every private, corporate and public foundation with assets of more than $250 million to post the composition of its staff and board on the organization's Web site.
The proposal also calls for foundations to specify the number of grants and percentage of grant dollars awarded to organizations where the grantee's board or staff are members of minority groups.
But the largest coalition of grant providers in California is urging legislators to halt the measure, fearing philanthropic organizations may choose to do their good deeds out of state.
"I don't think our members or the associations are saying the collection of information or data is a bad thing," said Colin Lacon, president of Northern California Grantmakers. "It's more the blanket requirement to do it."
Others oppose the measure on grounds that government shouldn't force foundations to consider diversity as a key part of their mission.
"I really do see it as more big government coming in and trying to establish these politically correct agendas when we are becoming an integrated society," said Meredith Turney, legislative liaison for Capitol Resource Family Impact, a Sacramento-based organization.
The measure will be assigned to Senate committees for consideration in the coming weeks.
Contact Edwin Garcia at email@example.com or 916-441-4651.