philanthropy california

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1 philanthropy in southern california a report from southern california grantmakers southern california s foundations, as key generators of philanthropy, are as diverse as the nonprofits they fund, providing support for a broad range of issues and initiatives that contribute to the greater good.

2 contents the role and value of foundations Foundations Overview 5 Types of Foundations 6 the impact of southern california s foundations Grantmaking Dollars in Southern California 9 Top Funding Areas: Los Angeles Metro Area 9 Nonprofit Capacity in Los Angeles County 10 top 20 foundations: la metro/funding areas 13 employment, economic and community impact of foundations Contributions to the Region s Economy and Employment 17 Foundation/Nonprofit Partnerships 18 conclusion 20 southern california grantmakers (scg) serves as a common voice for a diverse and vibrant community of philanthropists, all bound by a common desire to make a difference. Since its founding in 1973, SCG has grown to encompass family, community, private, corporate, public and operating foundations, as well as individual grantmakers. SCG s members represent Los Angeles, Orange, Riverside, San Bernardino and Ventura Counties.

3 the role and value of foundations The word philanthropy is Greek, meaning love for mankind. Today, the concept of philanthropy extends to voluntary giving of money, time or knowledge by an individual or group to address acute and chronic issues in order to promote the common good. The term also commonly refers to monetary grants given by foundations as grantmakers, organized as a nonprofit entity under federal and state tax laws to nonprofit public charity organizations. Thus, foundations are key generators of philanthropy. And over the past 25 years, there has been dramatic growth in the number of foundations in the U.S., from approximately 24,000 to more than 75,000. foundations overview While a foundation is a nonprofit, foundations and public charities are governed differently under tax laws, including different tax benefits and transparency obligations. Foundations are as diverse as the nonprofit organizations they fund, with the majority typically defined by their mission as to the initiatives and/or policy areas they will support. Typical foundation missions can range from a single targeted issue (e.g., the young, elderly or disabled) to a range of issues identified by a foundation s founders (e.g., improving lives of children, advancing reproductive health), or a broad and diverse array of initiatives that run the gamut from health and the environment, to humanitarian assistance. Nationally and in California, the top foundation beneficiaries typically comprise health, education and human services. California s foundations also support a broad array of grantmaking initiatives throughout the state. The breadth of issues supported include: health E Public health E Reproductive health E Mental health E Medical research E Health education for low-income teens E Mobile pediatric clinics E Strategic planning to help prevent obesity E Expanding access to health coverage through enrollment and retention policies education E Secondary and elementary E Funding college/scholarships E Vocation and technical E Library science/libraries E General operating funds for charter schools E Expanding low-income summer enrichment programs E Arts education 5

4 public affairs/society benefit E Civil rights and social action E Community improvement and development E Assisting community planning processes for day labor centers E Helping develop parents as effective school leaders human services E Food, nutrition and agriculture E Housing and shelter for the homeless E Safety and disaster services environmental E Conservation efforts E Natural resources and wildlife protection arts and culture E Visual arts/architecture E Historic preservation E Museums Foundations may also be diverse in terms of their geographic reach; community foundations typically target a specific region, focusing exclusively on making grants only to nonprofits in that region. Some may have a local and national reach, while others may have an international scope. types of foundations A foundation may take a variety of forms depending upon its initiator and purpose. The most common types of foundations and their characteristics include: family foundation E A private foundation endowed by an individual or family E Family members are typically integrally involved in the foundation s mission E Annual grants are generally awarded from investment income and not the endowment itself, helping ensure the foundation s long-term viability E Nearly two-thirds of America s private foundations are family foundations E Southern California examples: The Annenberg Foundation; The Ahmanson Foundation corporate foundation E A private foundation that receives funds from its parent company and is legally a separate entity E Distinct from corporate giving programs that tend to be targeted in nature E Generally governed by corporate executives/board members E Grants provided to a broad array of interests E Southern California examples: Wells Fargo Foundation; Amgen Foundation

5 independent foundation E A private foundation not governed by an individual, family or corporation E May have been initiated as a family foundation but evolved to independent management by its own trustees and directors E Southern California examples: The California Wellness Foundation; The James Irvine Foundation operating foundation E A private foundation that runs its own programs and services E Generally does not grant money to other organizations E Southern California examples: The Getty Foundation, which operates the Getty Museum and its programs community foundation E A public charity focused on grantmaking to improve the quality of life in a particular area E Funds are raised from individuals, families, businesses and organizations to provide grantmaking opportunities in its region E Recipients of funds from private foundations may rely on community foundations to guide grantmaking to organizations that share a common mission E Southern California examples: California Community Foundation; Jewish Community Foundation of Los Angeles 7

6 the impact of southern california s foundations grantmaking dollars in southern california The most recently updated information from the Foundation Center for the top 50 recipients of foundation grants in the Los Angeles Metropolitan area in 2008 provides a sense of where grant making dollars are directed in Southern California. The 50 recipient organizations cited represent 1,054 separate grants and a total of $528,370,411. Significantly, the key funding areas are education, health and human services, and arts and culture. top funding areas: los angeles metro area According to data for top funding areas in the Los Angeles Metro Area, foundation grants were authorized in the following areas in 2008: Other/Not Known.06% Science/Social Science 1.16% Human Services 26.98% Religion 3.02% Environment 3.27% International Affairs/Development/ Peace/Human Rights 3.4% Beneficiary Groups 5.02% Education 21.54% Arts & Culture 12.27% Public Affairs/ Society Benefit 5.05% Health 18.16% Environment = Environment, Animals/Wildlife Health = Health, Mental Health/Crisis Service, Health Organizations, Medical Research Human Services = Crime/Law Enforcement, Employment, Agriculture/Food, Housing/Shelter, Safety/Disasters, Recreation, Youth Development, Human Services) International Affairs/Development/Peace/Human Rights = International/Foreign Affairs, Civil/Human Rights Public Affairs/Society Benefit = Community Development, Philanthropy/Volunteerism, Public Affairs Science/Social Science = Science, Social Science Grants Authorized in Los Angeles-Long Beach-Santa Ana Metro Region, Authorized in Data from Philanthropy In/Sight accessed by Southern California Grantmakers, as of 6/4/

7 nonprofit capacity in los angeles county Major findings from the sixth report on The State of the Nonprofit Sector in Los Angeles 2008 issued by the UCLA Center for Civil Society include: E There were nearly 40,000 registered nonprofit and community organizations in Los Angeles County. Of these, approximately 32,800 were registered as 501(c)(3) public charities, including about 4,300 foundations. E Growth of Los Angeles County s nonprofit sector, in terms of both number and expenditures, has leveled off since The slow-growth period of the nonprofit sector is now in its fifth year, despite a growing economy between 2003 and E Average and median expenditures of nonprofits decreased, continuing a slow erosion in the scale of resources individual nonprofit organizations command. This also indicates that growth has been greatest among smaller nonprofits, and as a result, smaller organizations now make up a larger share than was the case 10 years ago. E There is a decreasing wage gap between public and nonprofit agencies in recent years. In fact, average annual wages for nonprofits are now on par with wages in the public sector. E While vulnerable populations may begin to rely more heavily on the nonprofit sector for services of many kinds, findings suggest that such reliance may be an even less realistic option precisely in those parts of the region with the greatest needs. E Although Los Angeles County ranks lower compared to other Southern California counties in terms of the 3-year growth rate of nonprofit organizations, it ranks higher in terms of nonprofit organizations per capita. In 2006, Los Angeles County was home to 31 nonprofits per 10,000 population more than any other county in the 5-county region, the 5-county region overall, and California. 31 Nonprofits Per 10,000 Population there were nearly 40,000 registered nonprofit and community organizations in Los Angeles County. Of these, approximately 32,800 were registered as 501(c)(3) public charities, including about 4,300 foundations.

8 E The findings on the scale and scope of Los Angeles County s nonprofit sector suggest that growth, in terms of both number and expenditures, has slowed in recent years. This trend could be due to government retrenchment, changing funder and donor priorities, consolidation, a decreased need for more agencies in some sectors, or a combination of these factors. E More recently, the Center for Civil Society s 2009 survey shows: O 37 percent of nonprofits asserted having increased expenditures in 2009 over the previous year. O 52 percent of nonprofits have engaged in strategic planning initiatives. O Double the amount of nonprofits reported starting programs, compared to those who cut programs. O 57 percent of nonprofits articulated a greater need for their programs and services during the economic downturn. E According to the Nonprofit Finance Fund s 2009 survey, only 11 percent of nonprofits expected to operate above break-even. E A study at Johns Hopkins University found that 37 percent of nonprofits felt under severe or very severe financial stress. E Although growth in the number of organizations continues to outweigh growth in expenditures, current numbers equate to a reduction in the median and average size of Los Angeles nonprofits. 2, , Between 1995 and 2009, the number of private foundations more than doubled, growing from 2,214 to 4,

9 top 20 foundations: la metro/ funding areas 1. The Annenberg Foundation (CA) Arts, education, health and human services, animal services, civic responsibility 2. Eli & Edythe Broad Foundation (CA) Education, science, arts, civic initiatives 3. The Ahmanson Foundation (CA) Arts and humanities, health and medicine, education, human services 4. Gordon and Betty Moore Foundation (CA) Environmental conservation, science (CalTech) 5. The California Endowment (CA) Promoting health status of Californians: access to quality, affordable health care 6. Weingart Foundation (CA) Human services, education, health, arts and culture, public and society benefit 7. The Lincy Foundation (CA) Humanitarian and entrepreneurial causes, education, clinical research 8. Skirball Foundation (NY) Education 9. Lucasfilm Foundation (CA) Educational and children s initiatives 13

10 10. The James Irvine Foundation (CA) Arts, California Democracy, youth 11. The Ralph M. Parsons Foundation (CA) Social impact, civic and cultural programs, health, higher education 12. Bill & Melinda Gates Foundation (WA) Global health, education/libraries, emergency relief, families/homelessness 13. The California Wellness Foundation (CA) Health and wellness, diversity in health professions, environmental health, healthy aging, mental health, teen pregnancy prevention, violence prevention, women s health, workplace health 14. The Ford Foundation (NY) Democratic/accountable government, human rights/ social justice philanthropy, economic fairness/ metropolitan opportunity, sustainable development, educational opportunity, freedom of expression (arts, media, religion) 15. The John & Dorothy Shea Foundation (CA) Urban ministry 16. UniHealth Foundation (CA) Hospital fund (community health improvement, healthcare systems enhancement, workforce development) general purpose fund (Fund for Nonprofit Organizations, Innovation Fund) 17. Saban Family Foundation (CA) Healthy development of children and families, societal needs in Israel 18. California Community Foundation (CA) Arts, education, health care, human development, housing and neighborhoods

11 19. Arnold and Mabel Beckman Foundation Chemistry and life sciences (Young Investigator Program, Scholars Program, Science Program) 20. The Robert Wood Johnson Foundation (NJ) Childhood obesity, health coverage/leadership/ research, public health/vulnerable populations Source: Top 50 U.S. Foundations Awarding Grants in the Los Angeles, CA Metropolitan Area, circa Foundation Center

12 employment, economic and community impact of foundations contributions to the region s economy and employment According to The State of the Nonprofit Sector in Los Angeles 2009, issued by the UCLA Center for Civil Society, the nonprofit sector employs close to 238,000 individuals in LA County (or about 6% of the county s workforce) and accounts for about 6% of the county s total wages. E In July 2009, there were 41,486 registered nonprofit organizations in LA County. Of these, nearly 84% (or 34,674) are registered as 501(c)(3) public charities, including 7,162 religious congregations and 4,546 private foundations. E Nonprofits experienced a 1.3% decline in total employment between October 2007 and September 2008 (fairing slightly better than for-profit firms 1.8% decline), while public sector employment experienced a 4.6% decline. E Before the economic crisis, almost twice as many nonprofit organizations experienced increased revenue (41%) than those organizations that experienced decreased revenue (22%). E In 2009, the Nonprofit Finance Fund (2009) found that California nonprofits experience significantly longer delays in government funding than organizations nationally. Los Angeles County Budget $ 23.2 Billion City of LA Budget $7.1 Billion Combined Grantmaking of Foundations for Metropolitan LA $ 2.4 Billion As of

13 foundation/nonprofit partnerships project grantsmanship Partnerships between a foundation and a nonprofit help strengthen the local nonprofit sector. A case in point is Project Grantsmanship, a partnership of the Annenberg Foundation, the California Community Foundation and The Grantsmanship Center, formed to strengthen community-based organizations by training nonprofit leaders to plan more effective programs and produce compelling proposals for funding. Launched in 2008, Project Grantsmanship has so far trained 100 local nonprofit leaders. The project s renewal will enable another 200 local nonprofit leaders to participate in this comprehensive Grantsmanship Training Program at a fraction of its cost through eight workshops: five in 2009, and three in In Project Grantsmanship, the Annenberg Foundation and the California Community Foundation will underwrite up to 90 percent of the tuition for eligible nonprofit leaders to attend The Grantsmanship Center s Grantsmanship Training Program. The $895 cost for the training program is subsidized so that each participant will pay $200 or $300, depending on the size of the organization. The partnership will also provide all participants with post-workshop proposal reviews and grantmaker evaluations. The Grantsmanship Training Program is a comprehensive, hands-on workshop that covers the complete grant development process, from designing sustainable programs and researching funding sources to writing and reviewing actual grant proposals. the la supportive housing recovery initiative The Corporation for Supportive Housing (CSH) and the Conrad N. Hilton Foundation recently announced a $5.2 million initiative to continue building permanent supportive housing for the homeless in Los Angeles. The initiative also includes assistance from the Community Redevelopment Agency of the City of Los Angeles (CRA/LA), JPMorgan Chase & Co. and Fannie Mae. Los Angeles County has seen a significant drop in homelessness over the past few years, which is due, in part, to an unprecedented rise in the production of permanent supportive housing. However, the economic downturn stalled construction of new supportive housing developments. The LA Supportive Housing Recovery Initiative is critical to ensure that the permanent supportive housing industry isn t permanently hurt by the recession, which would have long-term and devastating results for the city and nonprofit developers, as well as for homeless and disabled people who are desperately in need of housing. The initiative will restore momentum to an effort initiated five years ago by CSH, the Hilton Foundation and other partners to address issues of chronic homelessness in Los Angeles. That initial effort stimulated the development of more than 2,000 new units of permanent supportive housing and attracted dozens of new developers to the permanent supportive housing field.

14 in recent years, southern california foundations have been providing support to the nonprofit community in a number of new and innovative ways: by training nonprofit executives to become effective leaders, developing initiatives that provide critically needed housing and health care to the homeless and establishing a fund that provides grantmaking opportunities for area Latinos. destino hispanic legacy fund Local residents in partnership with the Ventura County Community Foundation established the Destino Hispanic Legacy Fund in The Hispanic Legacy Fund has established an endowed grantmaking fund to provide opportunities for the economic, educational, physical, emotional, social, artistic and personal growth of Latinos in Ventura County. Each year, founders and donors to the Fund review the needs of the community and vote to select issues of importance to Latinos in the County. Destino is building a permanent source of funds for Latino issues, whereby each year the earnings from the Destino Fund can be used to award grants. As the only endowment fund dedicated to meeting the needs of the Latino community in Ventura County, Destino provides grants to local nonprofit organizations through a grantmaking process that involves members of the community in new roles as grantmakers. skid row homeless healthcare initiative Concern about the unmet health needs of the homeless individuals prompted the Weingart Foundation to begin the Skid Row Homeless Healthcare Initiative in Informed by research conducted by Dr. Michael Cousineau of the USC Center for Community Health Studies, the purpose of the Skid Row Homeless Healthcare Initiative is to reduce suffering of homeless people in and around the Skid Row area by improving their health through increased access to coordinated and integrated services. Through this initiative, the Foundation supports improvements in health care delivery that enable access to a full spectrum of care oriented to the specific needs of homeless people. To that end, a group comprised of private and public agencies was formed under the auspices of the Community Clinic Association of Los Angeles County. The group was subsequently charged with developing plans, projects and policy actions that would result in integration of services and expanded capacity. This has produced a number of jointly coordinated projects designed to improve the delivery of care, outreach and access. As the initiative continues to evolve, options for integrated care remain the highest priority. Currently, the initiative s focus is on the development of a community health center providing specialized care for people in the Skid Row area. 19

15 conclusion Southern California s foundations, as key generators of philanthropy, are as diverse as the nonprofits they fund, providing support for a broad range of issues and initiatives that contribute to educational pursuits, community planning issues, arts education, culture, and health and human services. While the types of foundations may differ (e.g., Family, Corporate, Independent, Operating, Community), each makes its own distinctive contribution to improving the health, educational opportunities, environment or cultural vitality of the region. Foundations also contribute to the region s economy and employment, and often partner with local nonprofits to strengthen the fabric of our communities.

16 Cert no. SW-COC

17 Southern California Grantmakers 1000 North Alameda Street, Suite 230 Los Angeles, CA