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L.A. nonprofits hard hit by downturn

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Nonprofits in Los Angeles are seeing rising demand and falling revenue, twin challenges exacerbated by California’s severe budget crisis and the state’s high unemployment rate, a new study says.

Almost six in 10 of the area’s nonprofits say demand for their services grew during the downturn, with human-services agencies hardest hit, says the report from the Center for Civil Society at the UCLA School of Public Affairs.

At the same time, many groups are reporting budget shortfalls, with groups dependent on government or foundation funding faring worst.

Despite the struggles, employment in California’s nonprofit sector declined only 1.3 percent in the year ending September of 2008, and most groups were able to
maintain staffing levels during the downturn.

One in four nonprofits, however, saw reductions in full-time employees.

To increase the effectiveness of nonprofits in the wake of the recession, the report recommends organizations take a hard look at the effectiveness of their programs, using solid performance data to allocate resources among the most successful efforts.

Nonprofit also should use advocacy to engage with public officials and lawmakers on critical issues like health reform and economic recovery.

Finally, groups should consider collaborating or merging with other nonprofits to achieve costs savings and boost efficiency.

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