How California’s Largest Foundations Talk Equity but Practice Exclusion
How California’s Largest Foundations Talk Equity but Practice Exclusion
Inside the invitation-only system that keeps small nonprofits shut out of California’s philanthropic circle
By Vic Gerami
Founder and Chair, Truth And Accountability League (TAAL)
Across California, some of the nation’s most powerful philanthropic institutions speak endlessly about diversity, equity, and inclusion. They issue glossy reports, host panels on systemic bias, and publish statements about empowering marginalized communities. Yet behind the language of equity lies a practice that betrays its very meaning: invitation-only grantmaking.
For small nonprofits like the Truth and Accountability League (TAAL), which I founded to fight disinformation and discrimination, this closed-door culture has become an invisible barrier. The irony is painful. The very organizations that claim to champion equity are sustaining a system that excludes the very voices equity was meant to uplift.
“Equity without access is theater.
Diversity without transparency is decoration”
The Invitation-Only Wall
At the heart of this inequity is a simple but devastating reality. Many of California’s most prominent foundations, including the California Community Foundation, the Annenberg Foundation, and the James Irvine Foundation, no longer accept open applications. Instead, they invite a small group of “pre-vetted partners” to apply for grants.
This model, now common across the philanthropic sector, is justified as efficient and strategic. Foundations argue that it helps them focus on organizations with a proven track record or prior relationship. But that reasoning conceals a deeper problem: it entrenches existing power structures. It rewards connections, not community impact.
If you do not already know someone inside the foundation, if your nonprofit is not part of the right social or professional network, your mission simply does not exist to them. The result is a cycle of exclusion that mirrors the very inequities philanthropy is supposed to challenge.
The Myth of Merit
Foundations often say that smaller or newer nonprofits lack capacity, measurable outcomes, or “alignment with priorities.” Yet those justifications overlook the fact that such capacity is often built with the very funding that invitation-only practices withhold.
It is a circular trap. Organizations like TAAL, which work at the intersection of media, human rights, and cultural survival, are often told they need more “institutional history” or “scalability.” That could not be further from the truth. Three years ago, the Los Angeles County Commission on Human Relations recognized TAAL as the only organization of its kind advocating for Armenians and combating disinformation, bias, and hate.
Since then, TAAL has maintained an ongoing Information and Patrons Deck, a living document that highlights our five years of accomplishments, projects, and programs. It includes links to press coverage, videos, photos, and campaign materials. In other words, we make our impact transparent, verifiable, and measurable.
Yet despite that documentation, access to large-scale foundation funding remains out of reach. Meanwhile, those already inside the system accumulate more funding, visibility, and influence. Equity becomes a slogan, not a structure.
When Inclusion Becomes Performance
In public, these foundations perform inclusion flawlessly. Their websites feature diverse imagery, inclusive language, and commitments to “uplift underrepresented voices.” But private correspondence, and the lived experience of many small nonprofits, tell another story.
Grant officers decline unsolicited proposals. Automated forms direct inquiries to dead ends. Email replies offer polite versions of “We do not accept applications.” Behind the scenes, the same handful of nonprofits are funded repeatedly. According to the National Committee for Responsive Philanthropy, more than 80 percent of large foundation grants in California go to repeat grantees.
If the goal is innovation, this system fails. If the goal is fairness, it never began to try.
Tax Breaks Without Accountability
This problem is not only moral but structural. Private foundations are tax-exempt because their resources are meant to serve the public good. In return, they are supposed to operate transparently and distribute a minimum percentage of assets annually in charitable grants.
Yet invitation-only grantmaking effectively privatizes what should be a public resource. It transforms philanthropy into an exclusive club that benefits those already known to insiders.
Nowhere is this contradiction clearer than at the California Community Foundation. Despite its name, CCF is not a private family foundation. It is a publicly chartered community foundation, created to manage donor-advised funds and philanthropic assets on behalf of the residents of Los Angeles County. In other words, it operates as a public trust. It receives and distributes money under the same state and federal tax privileges that make it, in effect, a government-recognized institution serving the community.
That status comes with a responsibility to uphold equal access. When a community foundation of this scale operates by invitation only, it crosses an ethical line. Publicly chartered entities should never engage in exclusionary or discriminatory practices, whether intentional or structural. Limiting access to a small circle of insiders contradicts the very notion of “community.”
“When inclusion depends on connections, it is no longer inclusion”
The Diversity Illusion
California’s philanthropic institutions love to celebrate representation. They measure progress by the diversity of their boards and staff, not by who actually receives funding. In practice, racial and ethnic diversity among grantees has barely moved in a decade, according to data from the Center for Effective Philanthropy.
The same studies show that BIPOC-led and LGBTQ-led organizations receive smaller and less consistent grants. Many are shut out entirely. Relationship-based philanthropy, while well intentioned, perpetuates bias by privileging trust over transparency.
It is difficult to hold a system accountable when access depends on relationships rather than merit.
The View from the Outside
I have lived this firsthand. For years, TAAL has reached out to major California foundations that publicly list “equity,” “truth,” and “anti-discrimination” as core values. We have received polite responses, referrals to “future opportunities,” or silence.
Meanwhile, our work has documented hate crimes, challenged disinformation campaigns, and organized events that strengthen civic understanding. We have produced measurable public benefit. But we lack what the system values most: proximity to power.
Hundreds of small nonprofits face the same wall. In communities of color, immigrant circles, and emerging advocacy sectors, countless groups are working tirelessly without access to sustainable funding. Their exclusion is not incidental. It is baked into the design.
A System Built on Silence
Philanthropy rarely faces public criticism because few nonprofits dare to bite the hand that might one day feed them. This silence sustains inequity. Foundations know that most applicants will not question their processes. Those that do risk being branded as “difficult” or “not aligned with priorities.”
Yet silence is complicity. The invitation-only model violates the spirit of transparency and public service that justifies philanthropy’s tax privileges. The billions held in endowments are meant to serve the common good, not private networks of the well-connected.
The Path Forward
Reform is possible. Several foundations have already begun to open their application processes, using short concept notes, rotating grant cycles, or regional community review panels. These small steps matter because they acknowledge that fairness requires access.
Transparency portals, publicly listed selection criteria, and open calls for proposals should be the rule, not the exception. If a foundation truly believes in equity, it must prove it not in statements but in structure.
The California Community Foundation, as a publicly recognized community institution, could lead the way by opening a recurring application cycle for small nonprofits and publishing clear criteria for participation. The Annenberg Foundation could reserve a percentage of its grants for first-time applicants. These are not radical ideas. They are the minimum standard for an equitable system.
“More than 80 percent of large foundation grants in California go to repeat grantees”
A Call to Accountability
It is time for philanthropy to practice what it preaches. Equity without access is theater. Diversity without transparency is decoration.
For every small nonprofit that struggles to survive outside the invitation-only circle, the cost is not just financial. It is moral. It is the cost of silencing communities who have stories to tell, injustices to expose, and futures to defend.
The next time a foundation issues a press release about inclusion, the question should be simple: who was invited to apply?
Support TAAL
Please make a 100% tax-deductible donation to TAAL so we can continue our crucial work during these critical times.
About TAAL
Truth and Accountability League (TAAL) is a 501(c)(3) nonprofit advocacy organization with roots in defending Armenian identity and culture. Today, TAAL has grown into a broader platform dedicated to combating hate, discrimination, and disinformation affecting marginalized communities, including women, LGBTQ+ individuals, ethnic and cultural minorities, and other underrepresented groups.
TAAL monitors and challenges bias across media, academia, public policy, and cultural institutions. The organization provides educational programs, resources, and training to empower communities and individuals with the knowledge and tools to recognize, confront, and prevent prejudice, disinformation, and harmful narratives.
Our mission is to advance equity, promote accountability, and foster understanding, ensuring that all communities, including those of Armenian heritage, are represented, respected, and supported.
Sources and Documentation
- National Committee for Responsive Philanthropy (NCRP), Unequal Impact: Philanthropy’s Bias Toward Established Grantees, 2023
- Center for Effective Philanthropy, Nonprofit Diversity Data Report, 2022
- California Community Foundation, Annual Report and Financial Overview, 2023
- Internal Revenue Service, Community Foundation Tax-Exemption and Governance Requirements, 2021
- Inside Philanthropy, “Are Community Foundations Truly Public Institutions?”, 2024
- CalNonprofits Report, Philanthropy and the Public Good: Barriers to Funding Equity, 2023