Links to some wonderfully thoughtful pieces on the subject:
Andrea Davis Pinkney
I'm no authority. I hadn't even thought about this problem until a few weeks ago. But it seems to me that an ethnic literary award's goal ought to be to recognize and publicize quality books about different cultures, and not necessarily their authors. I like the idea of requiring books to be about a certain culture or ethnic group in order to qualify for an award rather than requiring the author to be of a certain ethnicity. If the goal is to celebrate diversity in literature, then the literature should be the first and foremost consideration.