Nonprofit organizations in Los Angeles are facing difficult fiscal challenges in the economic downturn, but many have fared better than expected in preserving staffing, programs and expenditures and have seen an increase in volunteers, according to a new report by the Center for Civil Society at the UCLA School of Public Affairs.

"Resilience and Vulnerability: The State of the Nonprofit Sector in Los Angeles 2009," co-authored by David Howard and Hyeon Jong Kil of the School of Public Affairs and released Oct. 23 at the State of the Los Angeles Nonprofit Sector Conference at the Skirball Cultural Center in Los Angeles, reveals a sector struggling with declining resources and increasing service demands while facing increased expenditures due to a steady rise in fixed costs, including health insurance.

"Nonprofits across the country are coping with the same challenges: Government funding has been cut, private foundations have lost significant portions of their endowments and individual giving is down," said Bill Parent, interim director of the Center for Civil Society. "In Los Angeles, the situation is more severe due to the state's budget crisis and high unemployment rate. More people, cut from government assistance, are turning to nonprofits for basic needs like food, health care and shelter."

"The nonprofit sector — which provides health, human and educational services and environmental protection and promotes our arts, music and culture — is working harder than ever under severe stress," said Jocelyn Guihama, an administrative analyst at the Center for Civil Society and the report's managing editor. "It is imperative that nonprofits work more closely with each other and with the public and private sectors to develop short- and long-term strategies to serve the region."

Highlights from the report's findings include:

• More than half (57 percent) of nonprofits surveyed reported that demands for their programs or services increased during the economic downturn, with human services organizations reporting the greatest challenge.
• Nonprofits dependent on government and foundation revenue reported the most severe revenue shortfalls.
• The majority of nonprofits reported that their staffing and volunteer levels stayed the same during the downturn, while 25 percent reported a decrease in full-time employees and 26 percent reported an increase in the number of volunteers.
• Nonprofits experienced only a 1.3 percent overall decline in total employment between October 2007 and September 2008, at the onset of the downturn, while public sector employment experienced a 4.6 percent decline.

The report offers several recommendations for the nonprofit sector to increase its effectiveness during what likely will be a long economic recovery:

• Renewed focus on program evaluation: Nonprofits need to develop the capacity to measure their progress toward stated outcomes and to measure the effectiveness of their programs and activities. Difficult decisions about scarce resource allocation should be made based on sound data and results that can be reported clearly to stakeholders.
• More widespread advocacy efforts: All nonprofits can engage in some degree of advocacy without penalty; nonprofits need to engage with key elected officials and lawmakers in policy discussions about health care reform, economic recovery and other social issues.
• Strategic collaboration and consolidation: Collaborative efforts in the nonprofit sector should decrease costs, increase efficiencies, promote knowledge-sharing and broach the issue of consolidation and mergers.

"Resilience and Vulnerability: The State of the Nonprofit Sector in Los Angeles 2009" is published by the Center for Civil Society at the UCLA School of Public Affairs and is available online at www.publicaffairs.ucla.edu/nonprofits09.

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