Hollywood Isn’t Donating Like It Used To

Los Angeles, despite being home to numerous very wealthy, sometimes generous people, is in a bit of a charity slump. There are a lot of reasons for why that is, but chief among them is that celebrity donors aren’t donating as much as they did before 2008. A lot of charities suffered during the financial crisis, and following that, people seem to be more interested in seeing how their donation is spent.

That’s reasonable, and something that is common for educated donors. But there are other issues as well, which may not be as unique to L.A. There are currently 35,000 501(c)3s. That’s 12% more than there were a decade ago. As a result, there is a lot of overlap, with multiple charities working towards the same goal. And while that may sound like a good thing, it actually isn’t. New charities are hard to start and maintain, and at scale are more expensive than large, established charities. But people keep starting new charities, when what they could be doing is donating that money to established organizations, or establishing funds to raise money for others.

Part of the problem with having so many charities is that it’s hard to tell which are worth supporting, which is part of the reason they tend to not survive for very long. It takes time to gain the trust and support of donors, which can be difficult with that many causes and charities to choose between. A streamlined non-profit scene would be ideal, but it’s not really fair to ask a bunch of charities to close up shop, nor is it really all that practical. It is safe to say that L.A. doesn’t need any more charities, it just needs to focus on what it has, and get people motivated to invest in those organizations.