Not Enough Fish in the Sea? Los Angeles County Charitable Giving Down $1 Billion Since 2006

June 3, 2016

By John E. Kobara

When I was very young, I was captivated by fishing. The idea of throwing a line into a mass of impenetrable water and imagining what you might catch on the line… always thinking there’s a big fish out there for me.

My brother-in-law, who is a professional adventure fisherman, told me later in life about the “grander,” which is a marlin weighing at least 1,000 pounds – a half a ton. I didn’t know people caught fish like that or even pursued them, but it’s a real thing.

There’s a reason no one ever poses for a photo-op with a minnow. We’re all after the big ones; the granders.

Fishing is a lot like fundraising. You’re taking a chance, often wading in murky waters, not sure what you will find. But you’re after that big catch, the major gift that will stabilize your nonprofit organization. But you have to, like fishing, learn the techniques. You throw many lines out there and wait patiently. For it’s not so much about you – it’s about the fish, why you are fishing and then the bait and the process. There’s a general assumption that there’s an infinite number of fish and certainly enough granders out there for everyone.

Yet a recent study commissioned by the California Community Foundation (CCF), and conducted by the UCLA Luskin School of Public Affairs, tells us that the fish in the sea are diminishing; and those that are left aren’t biting.

The Generosity Gap: Donating Less in Post-Recession Los Angeles County found that giving has declined by more than $1 billion since 2006. Simultaneously, those with greater capacity to give overall are giving at a lower proportion of their household income than they did before the “Great Recession.”

Additionally, average giving per household has decreased to just above 2 percent of adjusted gross income. And the number of mega gifts to L.A. nonprofits, defined as $1 million and above, has dropped by 95 percent over the same period.

So the fish, and especially the granders, that keep nonprofits fed are disappearing.

Meanwhile, more than 46,000 people are without shelter in Los Angeles County, and housing insecurity is at an all-time high. Thousands who dreamed of creating a better life here work in sub-standard conditions and live in the shadows out of fear of deportation. Access to high quality education eludes too many of our children. And low wages are pushing more and more families into poverty. And the number of nonprofits has returned to its high-point before the recession of more than 35,000.

Much of what giving remains is going to high-endowment organizations like hospitals and universities, or has been “exported” to causes and organizations outside of Los Angeles. This reveals a structural change that raises tough questions about our capacity as a region to provide help, healing and opportunity to the residents of Los Angeles County.

At the same time, The Generosity Gap reveals potential bright spots. We know that most donors do give to at least one cause or organization focused on Los Angeles; and they express a belief that their giving can make an impact. The perspective from younger donors is also heartening, as the study found that many are interested in investing more in Los Angeles.

If Angelenos allocated 2.5 percent of their annual income to charity – with the extra 0.5 percent going to Los Angeles – then L.A. nonprofits could see an additional $1.5 billion in revenue each year. But to do so means coming together as a community and tapping into our passion for making the world a better place to include Los Angeles.

What are some tangible ways foundations, nonprofits and donors alike can close the gap?

  1. Capitalize on cross-sector partnerships to better “market” Los Angeles: Funders often see Los Angeles as a confusing place to invest. As a result, we receive fewer outside grant dollars per-capita than other major metro areas. LA n Sync, organized by the Annenberg Foundation, has brought together the academic, government, nonprofit, business and philanthropic sectors to tell L.A.’s story and embark on a coordinated and collaborative attempt to “market” the needs and potential of Los Angeles.
  2. Strengthen and streamline the more than 35,000 L.A. nonprofit organizations: Furious competition for declining philanthropic resources has been exacerbated by the growth in the number of nonprofits. Duplication and overlapping services lead to inefficiency and increased competition for fewer dollars and donors. In response, the Nonprofit Sustainability Initiative facilitates mergers and partnerships between L.A. County nonprofits to assess capacity, support restructuring, integrate programs and share lessons.
  3. Build connections between L.A. donors and local nonprofits: Even when donors do want to give to Los Angeles, they can get discouraged and intimidated by the sheer number of organizations, leading to support for national organizations with greater brand recognition. To address this, CCF is developing an online resource to connect L.A. donors with effective local nonprofits working on the issues they care about most.
  4. Help organizations tap into L.A.’s historic wealth transfer through planned giving: Los Angeles is in the midst of one of the nation’s largest transfers of wealth. A 2011 study found that nearly $1.4 trillion will be transferred between generations in L.A. County between 2010 and 2060. Planned giving offers a tremendous opportunity for donors and nonprofits to partner to make a permanent impact for future generations.

More people fishing for fewer fish means too many go hungry. But by working together, we can restock the pond and close this generosity gap between neighbors and communities, and build a more resilient Los Angeles County.

John E. Kobara is Executive Vice President and COO of the California Community Foundation. Follow him on Twitter @jekobara.

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