Winter 2007

Dear Friends,

By passing every one of the infrastructure bonds on the statewide ballot last November, California voters demonstrated that they are prepared to invest in the future. Indeed, our state's future depends on how our state prepares for and accommodates the explosive growth projected during the next few decades, and investment in California's physical infrastructure is one crucial step.

Equally important is the need to invest in the social infrastructure of our state, continuing to build and nurture institutions that enhance the public good. This role is one willingly embraced by grantmaking foundations such as ours, which have been established for public benefit.

In a recent study commissioned by the Irvine Foundation, "Foundation Giving in California," we discovered, however, that there are significant regional differences in where grant dollars are awarded. Moreover, some of the most under-funded regions of California are also those that are experiencing the most significant population growth and demographic change. This gives us cause for concern.

The study found, for example, that:

• Only one percent of the state's grantmaking resources go to Riverside and San Bernardino counties, yet these counties are home to close to 10 percent of the state's population.
• The Central Valley had $1 billion in private and community foundation assets, compared with $30 billion in assets located in the San Francisco Bay Area.
• Nearly a third of California counties — many in the Inland Empire and Central Valley — receive less than $10 per capita in annual foundation giving compared with $102 per capita statewide.

These underserved regions of the state are home to many of California's neediest residents and are experiencing tremendous rates of population growth. The Inland Empire alone is projected to grow to a population of 8.6 million by 2040 from 3.3 million in 2000, while the Central Valley is expected to grow to 11.7 million from 5.7 million. The opportunities and investments in these regions will play an increasingly important role in the future of California.

Since our mandate at the Irvine Foundation focuses on expanding opportunity for all Californians, we believe we have a particular obligation to support work in the regions of the state with greatest need and most rapid growth. But, there are challenges. Some of the disparity in funding is based on disparities in the nonprofit infrastructure. The Bay Area and Los Angeles have long philanthropic traditions and many large, established nonprofits. Through our investments in underserved regions, we hope to nurture the development of nonprofits in those areas so that those organizations might be better positioned to attract additional investment by private foundations and others.

California, our nation's most populous state with an economy that rivals most nations of the world, occupies a unique and storied position in the American imagination. Similarly, California's foundations rank among the most generous in the United States. Now, we have an opportunity to invest in the fastest growing regions in California to ensure that all of California remains at the vanguard. We cannot miss this opportunity.

Sincerely,

James E. Canales
President and CEO

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