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Report: Nonprofits Struggling To Stay Afloat In Recession

LOS ANGELES (CBS) — Most Los Angeles nonprofits are in an ongoing struggle with declining revenue and increased demand, according to a new report released Tuesday by the UCLA School of Public Affairs.

"Hard Times: Impacts, Actions, Prospects The State of the Nonprofit Sector in Los Angeles 2010" shows that for a second year in a row, more than 60 percent of local nonprofits experienced an increased demand, particularly among low-income and vulnerable populations, while more than half reported a significant decline in funding.

"This recession still has most of the nonprofit sector by the throat," said Bill Parent, acting director of the Center for Civil Society at UCLA's School of Public Affairs.

"But it's amazing how much is still getting done. In the coming year, we predict more consolidation and collaborations, quite possibly mergers and closings, and new business models," he said. "There is a drastic need for strong and innovative advocacy strategies in the sector. In many ways, it's a test of who we are as a society and what and whom we support when government support disappears."

The Los Angeles County nonprofit sector includes 18,622 active public charities and private foundations. Together they accounted for nearly $38 billion in economic activity in 2008, the most recent year for which data is available, the report states.

The study finds that more than half of all local nonprofits reported declining revenues, with more than one-third operating in deficit.

While 33 percent of nonprofits in Los Angeles County reported increased expenditures, 32 percent reported decreased expenditures, and more than 60 percent reported an increase in demand for services over the last year, according to the report.

Among recommendations offered for the nonprofit sector to increase its effectiveness, the report suggests improvement in tracking and reporting of policy issues, along with deliberate and frequent engagement with elected officials, policymakers and business leaders.

UCLA also recommends an increased focus on low-income and vulnerable populations hurt most by the recession.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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