As industry observers continue to scrutinize the financial
workings of the Walter Kaitz Foundation, some executives are calling for a greater
commitment from cable companies to hire people of color in top management positions.
The latest Kaitz Foundation inquiry surrounds its $1.5
million endowment fund, which the foundation said was created to fund its operations in
case of an emergency. About $500,000 per year is set aside for the fund, which is also
earmarked for research and development of more effective ways to recruit qualified
The endowment has now grown to about $1.5 million,
according to John Goddard, former Viacom Cable chief and the organization's
treasurer. He added that while the endowment was created and set aside by the organization
as a safety net, it will ultimately be the Kaitz board of trustees that determines how to
best utilize the funds.
"At some point, the board of trustees has to determine
what to do with the endowment," Goddard said.
But some industry executives believe that the time to
address the issue is now.
"I would hope that the association would, as quickly
as possible, seek a consensus from the industry to find out how to best use that money to
further advance diversity, particularly for people of color," said Leo J. Hindery
Jr., president and chief operating officer of Tele-Communications Inc. "I don't
care about diversity 10 years from now: I care about diversity today, because this is such
a critical issue in the industry."
Paula Winn, president of the Kaitz Foundation, said the
fund was initially established to create a one-year operating safety net, adding that the
board of trustees determines how the fund will be allotted beyond that.
"It's part of any company's normal business
procedures," Winn said. "It's easy for some people to look at the process,
rather than the product."
The new inquiries followed earlier concerns from cable
operators about the financial status of the foundation. Many have questioned whether the
organization is effectively allocating its $1.8 million annual budget -- mostly generated
from the annual fund-raising dinner -- which is used to place people of color in
middle-management positions. The Kaitz Foundation has placed 44 fellows this year -- a
number that could increase before the end of the year.
But other industry executives have been critical of the
industry for not reaching beyond the Kaitz Foundation to hire more people of color in
upper-management and other positions.
Kathy Johnson, executive director of the National
Association of Minorities in Communications and a Kaitz fellow, said that in reality, only
a handful of companies are committed to diversity and to actually hiring Kaitz fellows.
Further, few have any initiatives in place internally to actively recruit qualified
"I don't think that it's so much what the
foundation does, but, rather, the commitment of the industry," she said. "The
industry tends to pat itself on the back at the dinner about what a great job it has done
in terms of diversity, when it really hasn't done a great job."
Indeed, the 1997 Federal Communications Commission
cable-employment report revealed that while minority employment increased slightly, only
29.1 percent of industry employees are minorities, and only 20 percent hold full-time
Don Anderson, vice president of business marketing for Diva
Systems Inc. and a current Kaitz board member, said the industry and Kaitz have made
tremendous strides in placing minorities, but both need to continue working together.
"Changing cultures is something that takes time,"
Anderson said. "What the CEO says and wants to do doesn't always translate down
to the hiring levels of the companies."
"This issue has to go beyond the executive level and
become an important part of our way of doing business," Winn said. "Their
initiatives regarding people of color are going to determine the ultimate success of the