Challenges Facing LA’s Nonprofit Sector
The Impact of Economic Downturn 2009-2010 and beyond
The Southern California Center for Nonprofit Management began to survey nonprofit leaders in the Fallof 2008 in the midst of the state budget delay and the stock market crash. Our goal was to explore howwe might best address the training and consulting needs facing nonprofit leaders and board membersrepresenting organizations throughout the LA region during this extraordinary time.By the Spring of 2009, as the local unemployment rate hit 12%, trends started to emerge that influencedhow we are responding to the capacity building needs of those we serve. As the jobless numberscontinued to climb, the demand of social services exploded. According to survey respondents needgrew, in some cases, by as much as 150% while income plunged by as much as 50% for someorganizations throughout the region. Layoffs, salary cuts, benefit cuts, tapping reserves or lines of credit, and finally, program cuts followed. Given those changes and challenges, throughout 2009, manyof our clients told us that they could no longer invest the time or money to take advantage of thetraining or skill building they needed more effectively.Our most recent survey begins to tell a new, sometimes sobering story that challenges the sustainabilityof diverse service organizations across every community.We have included a summary of our findings conducted between Fall 2008 through Spring 2010. Onaverage, 95.25 nonprofits participated in the online survey equally representing large and small budgetssizes.As a sector leader, and stakeholder interested in the vitality of our community, we hope you find theinformation useful and informative.
Changing Revenue and Evolving Responses to the Economic Crisis
Organizations were asked how funding levels had changed and what impact those changes had on their nonprofit.
As noted in the figure 1 below, there are consistent declines in financial support from individuals,corporations, foundations, and government entities.