The UCLA State of the Nonprofit Sector for 2010 was released in December. It is titled “Hard Times: Impacts, Actions, Prospects — The State of the Nonprofit Sector in Los Angeles 2010” (Source Here). As the title would suggest, the report, released by the Center for Civil Society at the UCLA School of Public Affairs, paints a picture of nonprofit organizations in decline. As the economy suffers, so does the services sector. Most nonprofits are losing revenue and failing in their fund raising efforts.
The report is bleak.
“For the second year in a row, more than 60 percent of local nonprofits experienced an increased need for their services, particularly among low-income and vulnerable populations. More than 50 percent reported a significant decline in funding.” (source here)
The report discusses the possibility of organizations shutting down, with the possibility of consolidations and mergers, and at the very least a re-evaluation of practices and the possibility for new business models…that preach a tighter bottom line.
With all the bleak forecasts and disheartening statistics, it would seem like all is lost. But I believe there is some optimism that should be taken away from the report. Because despite the decline in revenue, most services are still being accomplished. Not that many nonprofit groups (that I know of) have shut down their services to date. I think it is more a case of nonprofit leaders becoming innovative and thrifty, and learning to make due with the resources they currently have. And truth be told, that is not a new story. The history of charitable services involves leaders who want to make a difference in their communities, and learn how to do more with less.
Los Angeles County has 18,622 active public charities and private foundations. Together they accounted for nearly $38 billion in economic activity in 2008 (the most recent year for which data is available). (Source Here)
Things are bad right now, we all know that already. And when the economy is hurting the way it is now, it is the time when more people need these charitable services more than ever. This is the time when people need to step up and support their groups, but it’s hard to do that. But hope should not be lost. We need to believe that we can weather the storm, and Los Angeles county can eventually emerge stronger. That may not always seem pragmatic or logical, but really it’s the only way to think. And it beats the alternative, which would be giving up.
UCLA State of the Nonprofit Sector in L.A. County
The Nonprofit Finance Fund also released their annual State of the Nonprofit Sector 2010 (Source here). It’s different from the UCLA School of Public Affair’s “Hard Times: Impacts, Actions, Prospects — The State of the Nonprofit Sector in Los Angeles 2010” It focuses on the global view as opposed to the local view of Los Angeles County. However, the message and the general outlook are still the same: not good.
So much so that the report even led their front page with a rather telling quote from Clara Miller, CEO of the Nonprofit Finance Fund: “We expect 2011 to be another treacherous year for many nonprofits that routinely take heroic measures to meet demand for services. The ‘recovery’ has not yet reached people in need, or the organizations that serve them”
The nonprofit sector typically lags two to three years behind the private sector when recovering from a “normal” recession. But this recovery is more likely to be in the four- to five-year range, given all the circumstances. The likelihood of a full return to pre-recession economic conditions is doubtful.
The report tells the same story: a large increase in need for services, coupled with a sharp decline in revenues and fund raising efforts. Even worse are the expectations from the Government, federal support, and United Way support. There are statistics and hard data, and there are no punches pulled.
It’s tough news to take. But as I mentioned before, you can look at all of the statistics at a macro level, and everything looks bleak. But when you get down to an individual level, there are still personal stories occurring everyday of people receiving services, receiving hope, and relief. It would be naive to ignore the big picture, but I still believe we need to focus on the stories of hope. We can still talk about the good things that happen everyday, and look forward to a day when more good things happen. If we can shine a light on the bright spots, then everything else will become brighter sooner. That’s just a thought.
Nonprofit Finance Fund State of the Nonprofit Sector