fbpx

Non-Profit Sector

Prior to COVID-19, resource disparities in the nonprofit sector were evident, as revenues, assets, and grant funding are not distributed evenly for rural regions, communities of color, and certain sub-sectors. Regions like the Bay Area, followed by Los Angeles, often receive more government and philanthropic funding than other regions. Nevertheless, in a region like Los Angeles with a population of over 10 million residents, the funds the government allocates to these non-profits may not be proportionate to the number of residents that can be served. For example, in the L.A. region, there are about 1,400 non-profit organizations that receive government funding: equivalent to over 7,600 residents per government-funded organization.
“… it’s moving it to the community and having our non-profit organizations, our community groups help these kids get back on the right track, rather than continuing to fund our criminal justice system where we know there aren’t positive outcomes.”
Judith Vasquez

Committee for Greater LA

Impacts of COVID-19 on the Non-Profit Sector in Los Angeles County

Amidst COVID-19, the non-profit sector is facing a multitude of threats to their existence while demand for their services is at an all-time high. We have consistently relied on the non-profit sector to create transformational and highly effective impacts without funding them in a sustainable way. As a result, Los Angeles County and the rest of California, faces a sector that was already stretched thin, and is now at a breaking point. The non-profit infrastructure has taken years to build and it would be disadvantageous to allow the increased capacity of the sector to disseminate, as it would be very difficult to rebuild. Nevertheless, this is a real possibility as 20 percent of community based organizations across California have shut down. In Los Angeles, non-profits are struggling with maintaining payrolls and continuing their much-needed services. Across Los Angeles County, 42 percent of non-profits surveyed had enacted a hiring freeze, while 29 percent eliminated staff raises, and 20 percent conducted layoffs.

Moreover, a different survey conducted by CalNonprofits revealed that 83 percent of non-profits across Los Angeles County were suffering financially while simultaneously, 50 percent of non-profits reported an increase in demand for their services, amidst these revenue losses, as shown in Figure 14-2. With a strain in capacity and resources, disruption to operations and the economic stress from the pandemic are an additional layer to existing crises from systemic racism. A two month survey conducted by La Piana in March, revealed that 90 percent of non-profits nationally, have lost revenue, which is not surprising given the importance of in-person fundraising for nonprofit budgets. Due to the limitations on large public gatherings many of these in-person fundraisers were cancelled. To mitigate damaging cost saving measures like layoffs, reductions in hours and salaries, some non-profits are considering partnerships, such as merging with other non-profits, as a method to stay afloat during this pandemic.

Los Angeles County must strengthen the nonprofit sector as a key part of civil society in the recovery.

%

83 percent of non-profits across Los Angeles County were suffering financially while simultaneously, 50 percent of non-profits reported an increase in demand for their services

  • 83% 83%

%

Across Los Angeles County, 42 percent of non-profits surveyed had enacted a hiring freeze, while 29 percent eliminated staff raises, and 20 percent conducted layoffs

  • 42% 42%

%

A two month survey conducted by La Piana in March, revealed that 90 percent of non-profits nationally have lost revenue.

  • 90% 90%

9 Non-Profit Sector Policy Recommendations

The report puts forward 9 recommendations for policy and practical action.

Philanthropy must recognize the importance of the non-profit sector in addressing the negative impacts of COVID-19, including structural and systemic racism.

Invest in community spaces, land trusts, and cooperatives that can be operated by non-profit, community-based organizations.

Reorientation of government budgets and policies to justice.

Make transformative investments in BIPOC led and serving non-profits dedicated to dismantling systemic racism

Include Native American groups in funding streams

Build the capacity of indigenous-led groups

Understand and fund the full costs associated with effective non-profit service delivery.

Restructure contracts to multi-year contracts and reduce restrictions, as well as requirements that often add an administrative burden

Better coordination between City and County governments to effectively meet the needs of community organizations.

Our Streets Our Stories

The nonprofit sector evolved to serve community needs that our broader systems have failed to meet. They have never been adequately resourced or compensated for this work. Despite this, many nonprofits have become a trusted source of critical care and services for their communities, stepping up during a time when their own funding is stretched to the limit. We can’t afford to lose these trusted community pillars. Least of all at this moment.
Focus Group Participant

To learn more download the full No Going Back LA report (PDF)
Previous Topic: Alternative to Incarcerations
Next Topic: Transportation