Explaining Southern California's economy

Silicon Valley philanthropy: Give it away while you're young

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Manish Swarup/AP

A street child looks out from his classroom during studies conducted by the Salaam Baalak Trust at the New Delhi railway station in September 2004. Salaam Baalak Trust is an Indian charity for homeless children.

Silicon Valley naturally believes that it can change the world. This is at times a pathetic delusion, but also equally a chance for tech startup country to show off what it's got. Consider the case of Laura Arrillaga-Andreessen, wife of Mark Andreesen, who co-founded Netscape and is now a venture capitalist. This is from the New York Times Bits blog:

Laura Arrillaga-Andreessen is on a mission.

[She] thinks tech titans should be more philanthropic. And she is encouraging the youngest billionaires to give away their money now, not wait until after they retire or die.

But her mission extends beyond the tech world. She wants to expand the definition of the philanthropist, to include people who give time or expertise, not just money. She also argues that philanthropy should be more professional, by borrowing strategies like research and evaluation from Silicon Valley’s for-profit businesses. These strategies include using technology to make things more efficient, inventing new ways to do business and financing nimble upstarts.

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The Future of Wealth in LA: How LA stacks up

The above chart is from the a new report, "The Future of Philanthropy in L.A.: A Wealth of Opportunity," which I blogged about yesterday. The red line is LA County's projected transfer of wealth from 2010-2060, plotted against other counties (and cities, such as Detroit, Philadelphia, Chicago, Brooklyn). The growth rate is anticipated to be 8.7 percent yearly. That's a pretty torrid rate and, as you can see, will enable LA to outpace other major metro areas by a wide margin.

Growth always sounds great, but it can create challenges. For example, when countries grow too fast, they can have problems with inflation: too much money becomes available too fast to buy too few goods or services. Governments can get headaches trying to manage this.

In terms of the looming transfer or wealth in the LA region, the challenge is for non-profit organizations to get ready for it to happen. If your philanthropic metabolism is based on the present levels of wealth transfer, it's going to need to evolve to deal with wealth transfers that will be, as the report points out, 1,303 percent higher than Philadelphia, at an extreme.

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