The Future of Philanthropy in L.A.

December 12, 2011

A report released last week reveals:

•    By the end of 2020, personal wealth or assets in L.A. County will grow to $1.4 trillion
•    L.A.’s wealth will grow faster and larger than almost every metro in the nation
•    Immigrant entrepreneurs will be the major driver of future wealth
•    $114 billion will be transferred between generations by 2020
•    Divide between the wealthy and the poor will grow across the county
•    Converting even a small portion of transferred wealth into charitable giving for local needs and nonprofits will be extremely challenging

There are many issues raised by this new report, The Future of Philanthropy in Los Angeles: A Wealth of Opportunity.  But chief among them is our general lack of preparedness for the growth in wealth and transfer of wealth that are being forecast.  I think LA may be better prepared for disasters than any anticipated good that is coming!

We at CCF commissioned the study that led to the report because we’ve had a front row seat to transfers of wealth for more than 90 years.  What’s more, over the last 8 years alone, $1.5 billion in charitable gifts has come to CCF, of which we have granted out $1.2 billion!  We have attempted before to prepare our grantees and other local nonprofits for this source of contributions but our efforts have been ineffective.  In a cursory survey of our grantees in L.A., less than 25% showed any signs of preparation for planned gifts or bequests.

This new report, therefore, calls on us to de-mystify planned giving for nonprofits and help them prepare NOW for the wealth transfer. This includes creating and distributing a free planned giving kit in early 2012 to get nonprofits better prepared.

How shall we capture this transfer of wealth? Tell us what you think!

John Kobara
EVP/COO of California Community Foundation

5 Responses
    comments
  1. Chucky Kim says:

    This is fascinating and insightful news. Thank you for both doing the report and sharing your enthusiasm in the possibilities this wealth transference can bring.

    I know that this article primarily focuses on the new pockets of wealth that this is creating, especially in regards to charitable giving. Now with the growth of immigrant entrepreneurship, I am curious as to how this new movement of gifting will be channeled into specific Los Angeles areas. It is an observation that the kids are coming back home to LA and starting to build and own it as their own, as demonstrated in the influx of young professionals in traditionally red-lined areas of the city. How would this new wealth, in regards to the institutions it sponsors, affect the community development of historically under resourced areas, especially as many of them undergo rapid change with new development?

    Or perhaps in another sense, who are these immigrant entrepreneurs and are they coordinating their business efforts alongside social entrepreneurship? Are there examples?

    Thanks again. This stirred a lot of sparks.

  2. Mary says:

    The wealth must be broken down by ethnic groups and # of years in the US. Some group are not use to giving, this group of people needs to understand giving better and need to be better educated in the area of planned giving and the benefits to them.

  3. California Community Foundation says:

    Hi Chucky and Mary, Thanks for your comments and insightful questions! We’ll be responding to them shortly.

    • john says:

      Chucky and Mary
      Thanks for your comments and your patience. The emergence of new wealth and the diversity of that wealth–ethnically, religiously, and generationally is not well documented or researched. Certainly this report does not address it. That’s why we made it one of our four recommendations to engage other institutions in this research and analysis. there is strong anecdotal evidence that by the second generation, some immigrant groups begin to give in similar patterns as their more entrenched American peers. I have had meetings with the Chamber of Commerce, the LA Business Journal and others about tracking this trends. Anyway, much work to be done and we aill continue share what we find. For me, the lesson is that while we embrace diversity–it evolves and so must our understanding. Thanks again for reading and for engaging. John

  4. […] of the key findings of CCF’s Transfer of Wealth report was the need to enable non-profits to adopt a planned giving strategy for no cost and little […]

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