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As is the case with the for-profit companies and public

frequently reported stable revenue. In addition, small

sector agencies, the economic downturn has had a direct

organizations reported revenue declines less frequently (46

effect on nonprofit organizations’ financial health. Figure

percent) than their medium- and large-sized counterparts

2-1 shows that 52 percent of nonprofit organizations in

(54 percent and 52 percent, respectively). This finding

Los Angeles County experienced a decrease in revenue in

refutes the common notion that smaller organizations are

the past year and only 23 percent reported an increase.

more susceptible to economic turmoil.

Although a higher percentage of organizations reported revenue increases this year (23 percent) compared with last year (14 percent), there was a greater increase in the percentage of organizations that reported decreased revenue (34 percent in 2008–09 compared with 52 percent

Interestingly, smaller sized nonprofits reported more stability than mediumand large-sized organizations.

in 2009–10) over the same period. Our analysis also looked at revenue changes in relation to organizational reliance on various forms of revenue (e.g.,

52 percent of nonprofit organizations

government, donative, fees), 11 and the survey results showed

in Los Angeles County experienced

that those organizations that receive 50 percent or more

a decrease in revenue in the past

of their revenue from fees, sales, dues, and other earned

year and only 23 percent reported

income were the most likely to report decreased revenue

an increase.

(58 percent) and the least likely to report an increase (18 percent). These results are somewhat puzzling because last

In addition, considering only 25 percent of respondents

year’s survey data showed a very different picture—one in

reported no change in revenue over the past year (52

which organizations relying on government funding for

percent in 2008–09), we also identified that nonprofits

50 percent or more of their revenue showed the largest

experienced far less stability in terms of revenue

revenue losses and organizations relying on fees reported

generation.

the lowest percentage of declining revenue.

8

Even more alarming is how little nonprofit organizations were aware that this drop in revenue was about to occur. In the 2009 survey, when asked about revenue expectations for the coming year, despite the drop in revenue experienced that year only 26 percent of nonprofit organizations expected further revenue declines. Furthermore, 55 percent expected revenues to stay the same. The actual figures for revenue change over the past year (Figure 2-2) clearly contrast these expectations and speak to important implications for the sector. 9 Interestingly, smaller sized nonprofits reported more stability than medium- and large-sized organizations. 10 Although nearly one third of small organizations reported no change in revenue over the past year, medium (27 percent)

and

large

(13

percent)

organizations

less

15

2010 State of the Nonprofit Sector in Los Angeles  

Hard Times: Impacts, Actions, Prospects. For the second year in a row, the Center for Civil Society surveyed a representative sample of Los...

2010 State of the Nonprofit Sector in Los Angeles  

Hard Times: Impacts, Actions, Prospects. For the second year in a row, the Center for Civil Society surveyed a representative sample of Los...