Rich folks ignoring poor folks

These are tough times for homeless shelters, soup kitchens and other nonprofits that help the needy. They're facing the worst of all worlds: Demand has increased sharply since the economy went south, while at the same time private donations and government funding have fallen off. Given all that, you might think that L.A.'s wealthy class would pitch in. But, for the most part, you would be wrong. In the April issue of Los Angeles magazine, I look at how rich people largely ignore these social service organizations.

As a rule charitable giving among L.A.'s moneyed classes is embarrassingly unfair. Many of the same millionaires and billionaires who would have no trouble donating large sums to the Museum of Contemporary Art or City of Hope are less likely to write checks to local social service organizations that care for the poor and sick. The pecking order usually works this way: hospitals, higher education, arts and culture, human services. Based on surveys I've run across, hospitals get about 40 cents from each fund-raising dollar, and human services 12 cents. "We are two societies and we won't admit it," says Pablo Eisenberg, a senior fellow at Georgetown University's Public Policy Institute and a longtime chronicler of philanthropic activity. A place like skid row, he says, is not a world that's recognizable to the wealthy.

But why? It's a touchy subject in the nonprofit community. No one wants to risk alienating the same people who could help pay their bills. So instead of hearing outrage about the disparities, I got explanations. Rich Angelenos are generous (I'm told individual giving in L.A. totals almost $10 billion annually), but they're also selective. When writing checks, they usually support causes that focus on future goals--educational and medical mostly--as opposed to funding emergency services that simply make a bad situation less bad. There are exceptions, like Rick Caruso and Haim Saban, but as a rule that's how it usually shakes down.

With L.A. handling more homeless residents than any other urban area in the United States, the concern is that double-digit unemployment will stay around awhile--perhaps two years or longer--leading to additional hardship among those living on the edge. The numbers are sobering: The Los Angeles Regional Foodbank reports that nearly 1 million county residents, or one in ten, were provided food assistance in 2009, up 46 percent from 2005. In large part these are not the hopelessly addicted or mentally ill; these are paycheck-to-paycheck people who have lost their jobs and often their homes.

The latest Forbes list of the 400 richest Americans shows that the L.A. area has 26 billionaires worth close to $62 billion. Thousands have net wealth well into the nine figures. So where are they?