September / October 2003

Dear Friends,

As we move from summer to fall, I am pleased to provide a further update on the Foundation's strategic planning activity. With our mission to expand opportunity for the people of California, we have remained focused on gaining a better understanding of who the people of California are, where they live, and what challenges they face.

Among the many data we collected during our planning process, we were most interested in learning how various regions within California were going to evolve and shift over time. Here's just a snapshot of what we learned:

Regional shifts: In 2000, the two largest regions in California were Los Angeles County with 28% of the state's population and the nine-county Bay Area with 20%. In 20 years, four primary population centers will emerge. Los Angeles County will remain the largest at 26%. The Inland Empire (Riverside and San Bernardino Counties) combined with Orange County will grow to 20%, surpassing the Bay Area, and the Central Valley will match the Bay Area, with approximately 18% of the State's population in each region.

Population and ethnicity: In the context of a burgeoning state that is projected to grow from 35 million today to 59 million residents in 2040, the regions of the Central Valley, Inland Empire, and Los Angeles are microcosms of the state, experiencing dramatic shifts in population and ethnicity. Between 2000 and 2040, whites will go from 47% of California's population to 31%, which despite a decline in percentage still represents a relative increase in raw numbers (from 17 million today to 18 million in 2040). The Latino population will experience tremendous growth, going from 31% today (or 11 million) to 48% (or 28 million) in 2040, an increase of 162% during that 40 year period. That growth will be almost matched percentage-wise by growth in the Asian-Pacific community, which will go from 12% (or 4 million) to 16% (or 9 million).

College readiness: College readiness can be defined as completion of all courses required for University of California and/or California State University entrance, with a grade of C or better for graduating twelfth-graders. 35% percent of California high school seniors met these requirements in 1999-2000. While high school seniors from the Bay Area, the Southern and Central Coast regions, and Los Angeles are more likely to graduate ready for college, only 20% of seniors in the Imperial Valley and 28% of students in the Inland Empire and the Central Valley regions meet these requirements.* Voter participation: Californians' voter participation was lower than the U.S. average in the 2000 election with 52% of eligible Californians voting, compared to 59% of the eligible U.S. population voting. Regional differences are especially noticeable on this dimension. Voter participation in the 2000 election stood at 44% in the Imperial Valley and Inland Empire, and 46% in the Central Valley. On the other end of the spectrum, voter participation in the Sierras was much higher, at 66%, and in the Far North it was 61%.These are just a few indicators of the significant changes facing California, with implications at both the statewide and the regional level.

In response, we have determined that certain regions of California are increasingly important to the future of the State - especially those that have been traditionally underserved by philanthropy, where major demographic shifts are taking place, and where low-income Californians reside in disproportionate numbers.

Based on these criteria, we have identified three regions of strategic importance for the Irvine Foundation: the Central Valley, the Inland Empire, and Los Angeles County. Our strategies in each region will reflect our varying history with, experience in, and knowledge of the particular region. In the Central Valley, we have dedicated significant resources in the last several years to understanding the complexity of issues facing the Valley and to working with numerous organizations to address the challenges facing the region. Within our new program framework, we want to build on those efforts as we redouble our efforts in the Valley. On the other hand, the Inland Empire is a region where Irvine has had much less experience, and we have much to learn about the challenges and needs facing this region. We intend to learn more in the year ahead, so we can find the appropriate ways to support efforts throughout the Inland Empire that align with our priority interests. Finally, the Foundation has been a long-time funder in the Los Angeles community, and the diversity, scale and importance of the Los Angeles basin suggest that it must remain a key part of our grantmaking activity going forward.

Our intention is to use the months and years ahead to explore ways to deepen our engagement in these particular regions, while continuing to retain our statewide reach. The identification of these regions in no way suggests that we will not remain active partners to organizations working in other parts of the state; rather, it recognizes the enormous shifts taking place in these key parts of California and the Foundation's responsibility to identify the right ways to help these regions confront the challenges they face and seize the opportunities.

In other updates, at this point in the year, we have awarded close to $30 million in grants, the majority of which has been focused on supporting a responsible transition in program areas that we are exiting. We have released new guidelines in the Arts, and our approaches in Youth and California Perspectives continue to be developed. In the meantime, we have proceeded with a small number of new grantees under both of these focus areas. The Foundation has fully allocated its 2003 grant budget and, therefore, will not be accepting new letters of inquiry at this time. We expect to share additional information about strategies later this year and in early 2004.

As always, I welcome your observations and suggestions about this update or any aspect of our work, in our continuing commitment to open communication.

Sincerely,

James E. Canales
President & CEO

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