Many nonprofit human service organizations in Los Angeles are
facing difficult times due to impending budget cuts in California,
according to a report released last week by the UCLA School of
Public Policy and Social Research.
The report, “Facing Uncertainty: The State of the
Nonprofit Sector in Los Angeles,” was conducted by the Center
for Civil Society. It found that many nonprofit organizations are
now operating with decreases in revenue, in large part due to
budget cuts as well as increases in expenses.
The report, released at a conference last week at UCLA, found
that Los Angeles nonprofit human service providers depend on the
government for 73 percent of their funding and are faced with
fiscal uncertainty as they wait for the governor’s updated
budget proposal due out May 13.
Human service nonprofit providers include civil rights and
advocacy groups as well as groups that provide afterschool
programs, mental health services and services for the homeless.
Laurie Spivak, manager of the Center for Civil Society, said the
results of the annual report not only affect nonprofit
organizations but also Los Angeles as a whole because people from
all income levels benefit from the services that nonprofit
organizations provide.
“What inevitably is going to happen as organizations have
their funding cut and the government is cutting their own programs
at the same time, is that a lot of people are going to be missing a
lot of the programs that they’ve come to rely on, programs
which have really helped to build the community,” Spivak
said.
Budget cuts on nonprofit human service providers will hit
California particularly hard because of its alliances with both
public and private partnerships. Nonprofits in California rely on
public funding to a much greater extent than the national average.
Around the nation, the government provides 37 percent of funding
for nonprofits, according to the report.
In Los Angeles, high levels of poverty and the expansion of
nonprofit programs during the state’s financial boom of the
1990s contribute to the dependency of human service providers on
government funding.
The future of organizations that serve low income clients is
particularly uncertain because such organizations are unable to
charge higher fees to make up for decreased funding.
Some are resorting to taking in more middle income clients to
subsidize their services. Many child care programs that used to
only serve low income families are now serving more middle income
families to help alleviate budget pressures.
“What happens is that it cuts the number of lower income
(clients), so if they take more people who can afford to pay, it
affects the people who can’t pay,” Spivak said.
Cuts in both federal and state budgets will affect nonprofit
healthcare providers and clinics.
The UCLA-affiliated Venice Family Clinic, which receives
one-third of its $15 million budget from government funding, has
projected a loss in government funding in 2005, and is planning on
offsetting it with fund-raisers like the Venice Art Walk.
“We are raising money with the idea that that the
government money will not be there for us ““ so if the money
is not there, that we will not turn away visitors,” said
Linda Feodman, the clinic’s director of communications.
Susan Way-Smith, CEO of the Urban Education Partnership, a
nonprofit organization that attended the conference last week said
her organization will face challenges in light of state and federal
budget cuts.
Way-Smith said California school districts are facing drastic
cuts in funding for the upcoming year, and they most likely will be
trimming their budget by retaining money previously allocated to
outside providers of services like the Urban Education
Partnership.
Way-Smith added that the partnership will be looking to continue
providing fee-for-service programs and developing more effective
collaborations with other nonprofit organizations to combat the
budget crisis’s effects.