New Economy Changing the Way Charities Raise Funds.

THE New Economy is producing new millionaires in unprecedented numbers, which seems like it would be wonderful news for local charities.

Yet there is little evidence that rising fortunes are making people more generous. In fact, a survey performed before the 1999 holiday season by the California Community Foundation found a 10 percent decline in the percentage of L.A. County households saying they gave a charitable donation over the preceding 12 months.

Perhaps even more ominous, the non-giving trend was most pronounced among younger people -- those between the ages of 18 and 35, the survey showed.

Nonetheless, large local charities aren't reporting serious drops in funding, because a generous few are making up for a less-caring majority.

"We tend to see more money from fewer donors," said Todd Rosin of the United Way in Los Angeles.

While charitable giving is still healthy overall, a variety of trends are developing in L.A.'s nonprofit scene that seem connected to today's "wealth effect." For one thing, thanks to self-made modem billionaires like Gary Winnick and David Geffen, Los Angeles over the past few years has seen an unusual proliferation of new family foundations with hefty endowments.

"Carnegie, Rockefeller, all these people gave their gifts and set up foundations very late in life," said Jack Shakely of the California Community Foundation. He says that these relative youngsters are "acting like people who are 20 to 30 years older."

Those who haven't inherited their riches tend to be what Jim Ferris of USC's Non-Profit Studies Center dubs "the dot-coin kids" -- 30and 40-year-olds who turned paper fortunes into liquid assets by cashing in stock options or selling off their tech startups. These dot-corn moguls tend to scrutinize charities the way they pick stocks, with an eye to measurable returns on their investment dollars.

Los Angeles nonprofits are revamping their fund-raising strategies accordingly. These days, they have to act less like charities and more like businesses. Fund-raisers do less hard selling and more listening, as organizations try to figure out what sorts of projects make people want to give.

"You have to hit their hot buttons," said Steve Salton, chief development officer at City of Hope, a cancer research foundation in Duarte. Today's rich want to fight breast cancer, help inner-city kids to read, or fund animal rights efforts.

David Bohnett, the 43-year-old founder of GeoCities, is perhaps the prototypical new tech millionaire. Last year he created a namesake foundation with a $40 million endowment. His money will flow to highly specialized areas, like gay and lesbian organizations, handgun control and mass-transit initiatives.

As niche causes gain in popularity, people are giving less money to general-purpose charitable funds. Cheryl Zoller, who manages several private family foundations, says it's simple: People donating millions of dollars want to make an impact, so they go straight to the source.

That's great for an organization like Aids Project Los Angeles, but it spells trouble for umbrella charities that fund myriad ventures from their general fund. The new philanthropic order has these organizations scrambling to reorganize accordingly.