Demand up, revenue down at L.A. nonprofits

Most nonprofits operating in Los Angeles County are seeing higher demand for their services, and a majority have seen revenues fall, a new study says.

Among the county’s 18,622 active nonprofits, six in 10 say demand for their services has increased during the last year, particularly among low-income and vulnerable populations, says “Hard Times: Impacts, Actions, Prospects – The State of the Nonprofit Sector in Los Angeles in 2010,” conducted by the Center for Civil Society at UCLA.

At the same time, revenue is down for more than half of nonprofits, and more than one in three are operating at a deficit.

“In the coming year, we predict more consolidation and collaborations, quite possibly mergers and closings and new business models,” Bill Parent, acting director of the Center for Civil Society, says in a statement. “In many ways, it’s a test of who we are as a society and what and whom we support when government support disappears.”

This has been a tougher year than nonprofits expected, the study says, with three in four predicting in 2009 that revenue would remain flat or grow, and less than half actually reporting that positive outcome.

The report predicts a lag of four to five years after the recession before nonprofits see a meaningful recovery, longer than the two- to three-year turnaround typically seen after an economic downturn, and a complete return to pre-recession levels may never occur.

To increase their effectiveness during the prolonged recovery period, the report suggests nonprofits step up their advocacy efforts and increase their focus on populations most hurt by the recession.

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