When media mogul Ted Turner made his dramatic announcement that he would give $1 billion one third of his personal wealth to the United Nations, it might have caused some of L.A.’s richest people to do some squirming.
Why? Because Turner immediately called upon America’s wealthier individuals to give more to charitable organizations. And Los Angeles, notorious for its conspicuous displays of wealth, has a reputation for being downright tight-fisted when it comes to charitable activities.
A study by the Chronicle of Philanthropy in 1994 placed Los Angeles at 48th among America’s 50 largest cities behind El Paso, Texas and Virginia Beach, Va. in charitable donations based on per capita giving to mainstream charities and foundations.
That low ranking likely would not surprise the civic leaders who have spent much of the past year struggling to raise $100 million in donations to build Walt Disney Concert Hall in downtown L.A.
Nor would it come as much of a shock to officials at the local offices of United Way, where per capita giving averaged just $5.91 last year compared to an average of $20.14 in Atlanta.
“Los Angeles does not have the traditions of giving that exist in older East Coast and Midwest cities,” said Eli Broad, chairman and chief executive of SunAmerica Inc. and perhaps the city’s leading philanthropic arm-twister. “It is a newer city, and generally philanthropic growth follows the creation of wealth by a generation or two.”
So is L.A. the stingiest city in America?
In a city as geographically, economically and culturally diverse as Los Angeles, it depends who you ask.
Certainly, the city’s diversity as well as the exodus of major corporate headquarters from the region have made things difficult for large, mainstream charities such as United Way.
“It’s a city which is so big and so diffuse,” said John Fishel, executive vice president of the Jewish Federation Council of Greater Los Angeles. “Some cities really have a sense of closely knit communities. But this is a series of communities. People don’t know each other.”
But talk to charities linked to Hollywood and you’re likely to hear a different story.
The entertainment and fashion industries have taken a leading role in raising money and consciousness for such a number of causes, most notably in AIDS and health care issues.
Michael Ovitz recently donated $25 million to UCLA’s medical school. And scores of more anonymous Tinsel Town donors have contributed to AIDS Project L.A., which sponsors the annual AIDS Walk Los Angeles.
“Hollywood’s support has been huge,” said James Loyce, chief executive of APLA, whose board includes Barry Diller and Jeffrey Katzenberg. “I’ve found that people are willing to take my calls and meet with me. They may not give what I’m asking for, but I usually get a donation.”
Richard S. Ziman, chairman and chief executive of Arden Realty Inc. and six-year board president of City of Hope, said that Angelenos slowly are becoming more inclined to behave charitably with their wealth helped in part by the recovering economy and a booming stock market.
“L.A. is beginning to come around,” Ziman said. “It doesn’t have the generational traditions, but it is changing significantly for the better.”
Others in the local fund-raising community maintain that Los Angeles is home to a vibrant, if little-seen, community of smaller, neighborhood-based charities institutions that operate below the radar and, as a result, often fail to show up when the region’s philanthropic temperature is taken.
“L.A. is every bit as philanthropic as the rest of the country,” said Jack Shakely, president of the California Community Foundation, an umbrella group for 700 family and corporate foundations in the $100,000 to $1 million range. Last year, the group awarded $32 million in grants to L.A. County non-profits.
“We’ve been unfairly taken to task here,” he said, “just as we have on everything else.”
The Chronicle of Philanthropy based its rankings of cities on contributions to 10 major national charities, plus key regional charities and foundations.
That barometer, Shakely said, overlooks the millions of dollars in contributions made by scores of small family and corporate foundations.
“They were (mainly) using traditional charities that are East Coast-based, and not well represented on the West Coast,” Shakely said.
“We’re much more entrepreneurial in our philanthropy,” Shakely said.
The region’s philanthropic landscape has changed in many of the same ways that the local economic base has. Just as business life is no longer dominated by a handful of large, established institutions, he said, neither is the local charity and fund-raising scene.
Rather than giving to a large, established third-party institution such as United Way or American Red Cross, he added, “people here are much more inclined to just start something themselves.”
Indeed, Shakely represents a new breed of philanthropist a phenomenon he half-jokingly refers to as “venture philanthropy.”
“My board is very risk-tolerant,” Shakely said. “We give a lot of grants to small, grassroots organizations that others wouldn’t take a chance on.”
If the funders have become more entrepreneurial in their behavior, so have numerous institutions that compete among each other to receive those funds.
“We look at ourselves not as a charity but as an investment,” said Sister Jennie Lechtenberg, executive director of Puente Learning Center, an educational non-profit in Boyle Heights. “People want to help out but they don’t want to waste their money. And I don’t blame them.”
In an effort to portray itself as a sound investment, Puente Learning Center is audited each year by a Big Six accounting firm and gladly opens its books to any potential funders. The center recently ended a two-year, $40 million capital campaign to build a new 40,000-square-foot headquarters.
Grassroots organizations such as Puente Learning Center which operates on a $1.2 million annual budget and similarly small funding institutions represent the fastest-growing segment of the philanthropic scene, according to Lon Burns, president of the Southern California Institute for Philanthropy.
“We’re seeing our most significant growth in the creation of new smaller family foundations,” he said.
According to the state Attorney General’s Registry of Charitable Trusts, the number of registered charities in California has soared to about 79,000, up from about 61,000 in 1992; the agency continues to register an average of 400 new charities statewide a month.
But where some people see L.A.’s entrepreneurial economy as an inspiration, others especially the large established charities tend to view it as a hindrance to fund raising.
“It’s tougher and more expensive to get at the new, smaller, more entrepreneurial businesses,” said Joe Hagerty, president of the United Way of Greater Los Angeles. “It’s a challenge that many new communities face. The giving is just not there yet.”
Haggerty also cited the large number of charitable institutions in Los Angeles as an added setback. He estimates that as many as 6,000 legitimate charities in the region are competing for philanthropic dollars.
In an effort to attract some of those dollars, the local office of United Way has taken the unorthodox step of launching a new, unusually edgy media campaign with billboards featuring slogans like “What this town needs is compassion implants.”
“You want people to talk about your ads,” Haggerty said. “And we think people will be talking about these.”
But many in the world of philanthropy hold out hope that Turner’s massive gift to the U.N. could signal a new era in charitable giving especially in L.A. Turner, after all, is a self-made entrepreneur in the media business a profile shared by many of L.A.’s wealthiest.
“The fact that Ted Turner is in the entertainment business makes him a role model for other people in the business,” said Daniel Borochoff, president of the American Institute of Philanthropy. “It looks good for L.A. to start giving more on a per capita basis.”
Eli Broad, meanwhile, is counting on a factor other than altruism to stimulate giving by Turner’s peers.
“All of these people have big egos,” he said. “And if they see their colleagues doing things that are getting attention and getting respect from a broader community, I think they’ll want to follow.”