Coalition Seeks Redirection of Charity Funds : Philanthropy: Community groups say only 7.3% of donations to charitable organizations reach the minority, community-based groups that need them.

Accusing major foundations of “red-lining” Los Angeles’ poor neighborhoods, a coalition of community groups asked Rebuild L.A. Chairman Peter V. Ueberroth on Wednesday to help persuade the donors to redirect $125 million annually to an all-out attack on poverty.

“With a few exceptions, Southern California foundations slight the people and communities most in need,” said Beatriz Olvera Stotzer, co-chair of the Southern California Coalition for Responsive Philanthropy. “To green-line Los Angeles’ poor neighborhoods will only happen if there are major shifts in giving.”

Officials of major charitable organizations disputed the allegations.

Only 7.3% of the total donations from major foundations to nonprofit groups in Los Angeles County go to minority, community-based programs, according to Bill Watanabe, coalition co-chair, who also is executive director of the Little Tokyo Service Center.

The data--reflecting gifts to minority organizations averaging $8.4 million a year out of $114.5 million in annual giving--are for the years 1984 to 1987, the latest period for which such detailed figures are available, Watanabe said.

At a news conference Wednesday, the coalition demanded more funding for grass-roots leadership training and resource development, community-based economic development, affordable housing and multicultural awareness programs. The coalition called for private foundations and corporations to devote at least 50% of their contributions to community-based anti-poverty efforts.

The group also urged community foundations, such as the California Community Foundation, to devote at least 75% of their funds to programs serving low-income populations. The coalition called on businesses to invest 2% of their pretax profits in tax deductible projects to alleviate poverty locally.

A spokesman for Ueberroth declined to be drawn into the controversy and representatives of the United Way and the California Community Foundation said the coalition’s charges are unfounded.

“The United Way of Los Angeles has been responsive to minority communities of Los Angeles and continues to do so,” said Herbert Carter, the organization’s president. “It is regrettable that any organization attempts to build up its own sense of importance by downgrading others. We’re trying to build a community, not fractionalize one. We give to communities that appear to be most in need.”

In the year that ended June 30, programs for low-income residents collected $26.6 million of the $41.6 million distributed by United Way, according to spokeswoman Sandra Manning. Among those recipients were “main-line” charities, such as the Salvation Army and the Girl Scouts, that serve many minority clients, she said.

About 87% of the discretionary funds distributed by the California Community Foundation last year “went to the disadvantaged,” added spokeswoman Lauren Kay. Foundation officials, however, had a say in distributing just $2.3 million of the foundation’s $11 million in grants; donors earmark a large percentage of the funds for specific purposes, Kay said.

In recent months the Community Foundation has donated $20,000 to the United Neighborhoods Organization, a grass-roots group in East Los Angeles; $29,250 to the Bienvenidos Children’s Center, a child-abuse prevention program in West Covina that serves low-income families, and $30,000 to Inner City Arts, a program aimed at Skid Row children.

“We agree that poverty and the issues underlying the recent disturbances are everyone’s responsibility,” Kay said.

Speaking at the burned-out Ethiopian Community Center in the Crenshaw district, Watanabe said the coalition was not attempting to cast aspersions on any one group, but rather to prod foundations to change longstanding grant practices.

Stotzer, a board member of New Economics for Women, said the coalition is affiliated with the National Committee for Responsive Philanthropy, a Washington, D.C.-based group that has been critical of foundation giving practices.

“Most Los Angeles-based foundations and corporations, like their counterparts in many other cities, have been reluctant to support community organizations in their self-help, organizing, housing and economic development, and advocacy efforts,” the national group’s co-chairman, Pablo Eisenberg, said in a statement.

“In avoiding the tough issues of poverty, race and the empowerment of community organizations, those grant-makers have not met the test of responsive philanthropy,” Eisenberg said. “In a real sense, they have let down their city.”

Watanabe and others praised some California philanthropies, such as the Irvine Foundation, which has made donations to several groups working in riot-torn areas, including Concerned Citizens of South-Central Los Angeles, Esperanza Community Housing Corp. and Leadership Education for Asian Pacifics.

Irvine Foundation President Dennis A. Collins, a member of the Rebuild L.A. board, declined Wednesday to respond directly to the coalition’s charges. “The poverty agenda is a relatively new agenda for a lot of foundations,” he said.

The foundation, Collins added, has said it will donate $1 million this summer to community groups working in riot-affected areas.

Rebuild L.A. has established a task force on foundations. “We have been clearly informed by foundations and other philanthropic organizations that they want to have a positive impact on inner-city communities of Greater Los Angeles,” spokesman Fred MacFarlane said. “We feel we can help in that effort as L.A. rebuilds.”