L.A. Charitable Giving Still Lagging Behind Pre-Recession Levels The Center for Civil Society's new study, co-authored by Paul Ong, shows slow recovery in L.A. County's nonprofit sector

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Charitable giving in Los Angeles County has yet to return to pre-recession levels, according to a report released today by the Center for Civil Society at the UCLA Luskin School of Public Affairs.

Los Angeles County residents reported deducting $6.56 billion for charitable contributions from their federal taxes in 2012, 12.2 percent less than they reported before the start of the recession in 2006. This weak rebound in giving is consistent with the experiences of individual nonprofit and philanthropic leaders, according to the report.

The State of Donations: Individual Charitable Giving in Los Angeles (PDF) shows that overall support for Los Angeles nonprofit organizations, including individual giving, has seen incremental growth after a significant dip following the 2007 recession. This recovery, however, has been inconsistent. There is considerable volatility in major gifts and general giving patterns and the effects of the recovery are not being evenly distributed.

“Charitable giving is greatly influenced by economic expansions and contractions,” said Urban Planning professor Paul Ong, one of the authors of the survey. “Some trends are discouraging, as large swaths of the county are underperforming in terms of charitable giving. But some encouraging trends — such as improved giving among foreign-born residents — show that there could be a silver lining.”

The study shows that naturalized citizens are more likely to make contributions than the U.S.-born population, and by the 20-year mark of residence, immigrants are just as likely to give as U.S. natives.

Published with support from the Annenberg Foundation, The State of Donations is the latest annual State of the Los Angeles Nonprofit Sector Report produced by the Center. Previous reports have focused on rising demands and falling revenues of human services nonprofits over the past decade. The first State of the Sector report was published in 2002.

“There is great pressure on nonprofit organizations to raise more money through individual donations,” said Bill Parent, acting director of the Center for Civil Society. “This report helps show how many factors — the generational transfer of wealth, changing views of philanthropy, the squeeze of the middle class, growing Latino and Asian populations, and uneven economic growth across the county — are changing existing patterns of generosity.”

Among the report’s other findings:

  • Forty percent of Los Angeles residents report that they donate to charity, including donations to and through religious organizations.
  • Diversity matters, but it is complicated. Of the major racial and ethnic groups, whites and Asians in Los Angeles are more likely to give than African Americans and Latinos. There is, however, considerable variation within those groups — the more immigrants are incorporated into an area, for example, the more likely they are to give.
  • In Los Angeles County, older, more educated and wealthier populations are more likely to give.
  • Paradoxically, the highest levels of generosity — measured as the percentage of the population that donates to charity and the share of income donated — can be found in the county’s most and least wealthy neighborhoods.
  • In terms of major gifts, Los Angeles nonprofits are vying for the outsize generosity of a very small percentage of high net worth households, which are estimated to provide half of all individual giving to nonprofits.
  • Individual giving patterns reflect growing inequality. High net worth households are contributing more in actual dollars but less in terms of the percentage of their income donated to charity. In terms of major gifts over $1 million, higher education has the most recipients as well as donors.
  • Los Angeles is a key player in major giving, with more dollars flowing out of the area than are coming in.
  • Between 2006 and 2012, county residents who itemized their deductions contributed on average almost $1,500 to charitable causes, but that giving diminished significantly after 2007. Between 2006 and 2008, total tax-deductible contributions declined by $1.28 billion for the county as a whole, which translates to a decline of roughly $350 per tax filer.

“It is our hope that greater awareness of these trends might encourage more giving as well as more thoughtful giving across Los Angeles,” Parent said.

Highlights from The State of Donation: Individual Charitable Giving in Los Angeles will be presented during an October 28 event at the Center for Civil Society’s annual conference on the state of the Los Angeles nonprofit sector at the Skirball Center.

The entire report is available here.

 

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