Op-Ed: Rich Angelenos are giving less to charity — and the consequences are dire

During the Great Recession, tens of thousands of residents in Los Angeles County fell into poverty, and thousands more became homeless and went hungry. Simultaneously, the public sector was forced to reduce funding for many human services. It’s now apparent that philanthropic giving also declined, imperiling our community’s most vulnerable citizens and posing an ominous challenge to the county’s social fabric.

UCLA’s Quality of Life Index, released in April, found that a significant number of county residents are financially stressed and experiencing intense anxiety over their economic viability. For example, 31% of all residents are worried about losing their homes and becoming homeless. More than half with annual household incomes of less than $30,000, and even 24% earning between $90,000 and $120,000, fear the same fate. Similarly, 29% of all residents are concerned about going hungry because they can’t afford the cost of food. Half of households earning less than $30,000, and one quarter earning between $60,000 and $90,000, also worry about food security.

There are profound differences among demographic groups when it comes to economic distress. Latinos are four times more likely to fear hunger, and three times more likely to fear homelessness, than are white residents. Younger residents, including families with children, also report especially high levels of insecurity, which can cause collateral damage such as spousal and child abuse, mental health crises and substance addiction. The societal implications of each of these afflictions are plain for all to see.

Gaps in the social safety net are often eased by nonprofit organizations, which are the primary providers in Los Angeles County of early childhood education, programs for at-risk and foster youth, homeless and domestic abuse shelters, housing assistance, job training, and alcohol- and substance-abuse treatment. The recession caused cuts in government funding of these nonprofits while demand for services grew.

A UCLA philanthropy study, which will be released jointly with the California Community Foundation in June, reveals that the other prime source of support for nonprofits, individual donations, also fell during the recession — and remains below pre-recession levels today. Households of all income levels that regularly give to charitable causes are contributing about $1 billion a year less than they did prior to 2007, a drop of 15% in annual giving.

Particularly troubling is the finding that wealthy households, who by all accounts have more than fully recovered from the recession, are donating a smaller percentage of their income to charitable causes, even though they may be donating marginally more in actual dollars. This retrenchment is noteworthy in that about half of all individual giving to Los Angeles nonprofits comes from high-net-worth households.

Simply put, private giving is not keeping pace with donors’ philanthropic capacity or with need, and that is exacerbating the widening economic fault lines in our community. As a result, many charitable organizations aren’t in much better financial shape than the people they serve. A weaker safety net will further pressure those on the economic margins, sinking larger numbers of residents deeper into poverty.

Why is this happening? Factors such as segregated communities and Los Angeles’ sheer size and sprawl may be insulating many of our citizens from the deteriorating human conditions that plague our region. Although philanthropy doesn’t have the capacity to fund all of society’s needs, it is the first responder to our most compelling social challenges.

Charitable institutions can act quickly, strategically and locally, and they can motivate government to act as well, serving as incubators for new and effective ideas. For example, nonprofits developed the “housing first” system for tackling homelessness.

Economic inequality in America is the principal domestic issue of our time. However, this is more than an economic issue, it is a moral one. The philanthropic sector — and that means all of us with a little money to spare — plays a pivotal role in helping to lift up the economically and socially marginalized among us. It is our generosity that defines the extent of our commitment to a just and equitable society.

Hunger, homelessness and the fear of both are greater than at any time since the Great Depression. At the same time, accumulated wealth is higher than at any time in our history. This is a haunting paradox, and if we fail to resolve it we will reap the inevitable bitter harvest that we have sown.

Zev Yaroslavsky is director of the Los Angeles Initiative at the UCLA Luskin School of Public Affairs and Department of History. Bill Parent is lecturer in public policy at the UCLA Luskin School of Public Affairs.

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