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Melanie Lundquist

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Time to Change the Way We Give

Posted: 06/29/11 12:47 PM ET

Wake up wealthy Americans! It's time to rethink how you give away your money.

Bill Gates and Warren Buffett deserve a lot of credit for pushing America's wealthy to give away more of their income, but there clearly needs to be an equal push to get the nation's moneyed classes to rethink the they way they give.

America's wealthy funnel the vast majority of their charitable dollars into institutions that simply don't address society's most urgent needs. That may pass the muster when we're all doing well, but it doesn't work in times like these.

According to the Chronicle of Philanthropy, wealthy individuals "give their biggest donations almost exclusively to universities, hospitals and medical centers, and arts institutions. They rarely make large gifts to social-service groups, grass-roots organizations, or non-profit groups that focus on the poor or minorities."

Why? The answer isn't complicated. First, people give to people they know: their alma mater, and friends connected to hospitals, museums and foundations -- all good causes, but none of them immediately addresses the critical socio-economic issues we're now facing. Second, wealthy people today are more physically separate from the poor than ever before, resulting in a growing empathy gap. Out of sight, out of mind. Studies have shown this gap directly impacts giving patterns, drawing money and attention from those most in need.

Nowhere is the problem more apparent than in Los Angeles, home to the nation's highest concentration of millionaires as well as the title 'Poverty Capital of America.' According to Forbes, the city of Los Angeles alone is home to 19 billionaires who live apart, yet in the same city where two in ten live in poverty, as do nearly three in ten children. Clearly, the disconnect between the city's wealth and its problems has become acute, and we are rapidly heading toward a future where the movie Crash will seem like a fond memory.

The state of California is no better. To put it in perspective, if California were a nation, it would rank fourth in number of billionaires, behind the U.S., Russia and China; and yet for all it's wealth, the state has the nation's second highest unemployment rate, the highest homeless population, and the unique and gigantic burden of the largest prison system in the Western World, costing $10 billion a year and so overcrowded the Supreme Court recently ordered 30,000 inmates released citing cruel and unusual punishment.

If ever there was a time for wealthy Angelinos in particular, and Californians overall to snap to and change the way we give away our money, it is now. To quote JFK, "If not us, who? If not now, when?"

I've been afforded the greatest opportunity anyone could ever have to make a difference. Hard work and good fortune have allowed my husband and me to give significant financial support to various organizations throughout Southern California.

Our largest effort by far has been to help establish the Partnership for Los Angeles Schools, a non-profit focused on turning around the city's lowest performing schools in our poorest neighborhoods. Today, it is one of the largest turnaround organizations in the country, serving nearly 19,000 students, and proving focus and resources can make a difference in even the direst situations. Scores are up, as is attendance, campuses are cleaner and safer, and I have no doubt we improve the academic and overall lives of the students and families we serve.

Importantly we didn't just give our money; we stay involved, regularly visiting Partnership schools in Watts, Boyle Heights and South LA. We meet teachers and students, serve on the board, and sign checks greater than $5,000. We don't want our name on the door and more than one person has expressed dismay at our investment, but it is a gift to be a part of the Partnership, and particularly so because we stay so involved. We see first-hand the changes on the campuses and in the lives of the students who go to classes there.

The Partnership may not be a glamorous investment, nor does it cement relationships, but it does intelligently put resources where they are most needed, tackling some of our most urgent and systemic problems. My hope is more philanthropists will look for their own ways to do the same: to make investments, not just donations, and to make sure their philanthropy helps those most in need. Yes, it means a re-think of the way we give, but it promises to truly lift up lives in these hard times and bring us back to the true definition of the word 'philanthropy,' which literally means "the love of humanity."